* PepsiCo is "very close" to sweetener breakthrough
* Says key is sweeteners plus flavor modifiers
* Dr Pepper Snapple also experimenting
* Coke says innovating, but says plans are confidential
(Rewrites lead; adds comments from Coke; changes headline)
By Martinne Geller
NEW YORK, Dec 13 The soft drink makers who
brought you the "cola wars" are gearing up to fight on another
battlefield, where the secret weapons are sweeteners and
John Sicher, editor of trade publication "Beverage Digest"
calls it the "ingredient war."
The new generation of low-calorie soft drinks will contain
a sophisticated mix of natural and artificial sweeteners and
ingredients to balance them out, industry executives said on
PepsiCo Inc (PEP.N), Coca-Cola Co (KO.N) and Dr Pepper
Snapple Group Inc (DPS.N) are all experimenting with natural,
low-calorie sweeteners and so-called flavor enhancers, top
executives said at a conference hosted by Beverage Digest.
Pepsi 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, said Chief Executive Indra
"We want to be out there with a product that is
outstanding, not one that is just good," Nooyi said.
"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 (IFF.N), 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 zero-calorie sweetener derived from the stevia plant.
Coke sells vitaminwater zero with a similar 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.
In August, PepsiCo signed a four-year deal with Senomyx Inc
(SNMX.O) for the development of sweeteners. Coca-Cola signed a
similar deal with Chromocell Corp earlier this week.
Coke North America President Sandy Douglas said on Monday
the company's plans were confidential, but its research and
development labs were "as busy as anyone in the industry." He
stressed it was important to make sure ingredient innovations
match up with the brand images of products.
Dr Pepper Snapple Group is also experimenting with
low-calorie sweeteners and modifiers.
The company's chief executive, Larry Young, said it was
easy to go 90 percent toward creating a great-tasting
low-calorie product, but the final 10 percent was very
difficult. He also stressed Dr Pepper would not sacrifice
(Reporting by Martinne Geller; editing by Dave Zimmerman and