Coke concerned about corn syrup prices
CHICAGO (Reuters) - A Coca-Cola Co. (KO.N) executive said on Monday the company is feeling the pinch from high corn prices, which have raised the costs of high fructose corn syrup, its main sweetener in the U.S. market, and Coke may investigate alternatives as a result.
"The price increases that we're seeing for corn and high fructose corn syrup are unlike we've seen in many a year. We're clearly feeling the pinch and it's been tough," said Scott Young, a food service division executive at the company.
Speaking at the Reuters Food Summit in Chicago, he said Coca-Cola was starting to offer higher-yield concentrated syrups to customers to help them reduce costs.
The new syrup formulations, which Young said will start rolling out in 2007 and be adopted more widely in 2008 and 2009, would make soft drinks at a ratio of one part syrup to seven to eight parts water. Most current formulations yield one part syrup to five or 5.5 parts water, he said.
The new syrups would allow customers to order fewer bags of soft drink concentrate, which also cuts down on packaging waste and fuel required to deliver the concentrate.
Young also said he would not be surprised if Coca-Cola was looking at switching to different sweeteners. However he said he did not have enough information to say whether this could involve a move to sugar or Splenda from corn syrup.
Corn prices have recently soared as more of the crop is diverted to use in ethanol, the gasoline additive that has become more popular in the wake of higher fuel prices and increasing interest in cleaner-burning fuels.