Pepsi close to sweetener breakthrough: CEO

NEW YORK Mon Dec 13, 2010 3:46pm EST

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NEW YORK (Reuters) - PepsiCo Inc is "very close" to launching new products that use a mix of sweeteners and flavor modifiers to make low-calorie drinks taste better than ever, its chief executive said on Monday.

"We want to be out there with a product that is outstanding, not one that is just good," said Pepsi CEO Indra Nooyi at a conference hosted by Beverage Digest.

"We are very close," she said, referring to a line-up of products that she declined to identify.

Nooyi said a breakthrough would involve not only sweeteners, but ingredients to balance the impact of those sweeteners. This includes making "one teaspoon of sugar taste like four" or cutting short the taste of a sweetener's flavor, thereby preventing an aftertaste.

Doug Tough, chief executive of International Flavors & Fragrances Inc, said flavor enhancers are "in a word -- extremely important" to the industry now.

PepsiCo already sells Trop 50, a lower-calorie version of Tropicana juice, and a zero-calorie SoBe Lifewater drink, made with a natural zero-calorie sweetener.

Good-tasting, natural, low-calorie sweeteners are seen as a holy grail for the soft drink industry, especially as it comes under fire by critics who say sweetened drinks contribute to the growing obesity epidemic in the United States.

Dr Pepper Snapple Group Inc is also experimenting with low-calorie sweeteners and modifiers.

The company's chief executive, Larry Young, said that it was easy to go 90 percent toward creating a great-tasting low-calorie product, but that the final 10 percent of the way was very difficult.

He also stressed that Dr Pepper would not sacrifice taste.

In August, PepsiCo signed a four-year deal with Senomyx Inc for the development of sweeteners. Coca-Cola signed a similar deal with Chromocell Corp earlier this week.

(Reporting by Martinne Geller, editing by Dave Zimmerman)

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