EFSA Verdict Could Impact Diet Soda

soda canNegative sentiment causing a Diet downturn in CSDs, could be reversed with the help of social media in light of a decision by EFSA.

This month, the European Food Safety Authority (EFSA) declared Aspartame to be safe.

On Dec. 10, 2013, EFSA issued a report declaring that the consumption of Aspartame.

“While the FDA long-ago offered its opinion on the safety of aspartame, there has been a resurgence of negative sentiment and questions around the health and safety of aspartame, which we think is one of the leading contributors to the recent carbonated soft drink (CSD) “Diet Downturn,” Wells Fargo Securities reported. “While we don’t believe the EFSA report will change short-term negative trends, it could lead to a bottoming out of negative sentiment and a gradual return to volume growth in Diet CSDs.”

Wells Fargo Securities has found, based on its “Beverage Buzz” survey results and extensive conversations with retailer contacts, that consumers are shifting away from Diet CSDs and migrating instead toward three main beverage categories:

(1) Healthier and all-natural options like bottled waters and teas that don’t have artificial sweeteners;

(2) Regular CSDs to health concerns with artificial sweeteners. Regular offerings are not perceived to be any less healthy, but consumers are drinking them at a lower rate as they rationalize calorie intake;

(3) Consumers, particularly Millennials, are switching to the Energy category. Wells Fargo noted that “CSD-like” Energy offerings like Monster Zero Ultra have sourced much of their growth from Diet consumers.

Wells Fargo predicted that based on its Deep Dive Analysis of the Recent CSD “Diet Downturn”-CSD volumes in the U.S. could decelerate further and decline 15-20% by 2020, assuming the Diet CSD downward trend continues.

 Wells Fargo further noted that social media has been one of the biggest drivers of the negative sentiment around Aspartame in the U.S. and globally.

 Based on our ‘Beverage Buzz’ survey, and recent comments from various executives at beverage companies, we attribute the health and safety concerns surrounding Diet CSDs to be the leading cause for consumers to switch to alternatives. In an effort to understand the social media impact, we analyzed tweets over the past week with the hashtag #Aspartame. While this is merely a proxy, it is clear that the social media buzz related to this news is very strong,” Wells Fargo reported.  

Bringing the EFSA news to the social media world could ultimately drive a reversal of the negative sentiment around artificial sweeteners,” Wells Fargo predicted. “If consumers return to Diet CSDs as a result, we believe 2014 could see strong volume recoveries in the category and benefit all major manufacturers.”

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