Editors' pick: Originally published Oct. 17.
The beverage and snack giant announced Monday that by 2025 at least two-thirds of its drinks will have 100 calories or fewer from added sugar per 12-ounce serving, up from about 40% currently. The new global target, said PepsiCo, is more ambitious than its prior goal of reducing sugar by 25% in select drinks in certain markets by 2020. The news from PepsiCo comes on the heels of the World Health Organization recommending this month that countries enact taxes on sugary drinks. It also arrives before Philadelphia's highly publicized 1.5 cents per count tax on sugar-added and artificially sweetened soft drinks goes into effect on Jan. 1.
For Pepsi and Coke, the fight against sugar has taken on several forms of late.
Both Coke and Pepsi have found success selling 7.5 ounce drinks -- aka "mini cans" -- to shoppers that boast lower amounts of sugar because of the smaller sizes. Additionally, each company has also ventured more and more into the cold-pressed juice and low-calorie sparkling beverage markets. And at PepsiCo specifically, its Frito-Lay snacks division has found success by focusing on lower-calorie chips, which has helped to offset sluggish sales of full-calorie soda and diet colas.
Pushing consumers to smaller can sizes and non-soda options has worked out well for the soda players financially.
PepsiCo blew away analysts' earnings estimates for the second straight quarter in late September, posting fiscal third-quarter earnings excluding one-time items of $1.40 a share vs. forecasts for $1.32. The company hiked its full-year profit outlook for the second time this year, too.
The quarter was led by PepsiCo's two bread-and-butter businesses in North America -- snacks and beverages, with each benefiting from a steady stream of new products and input cost deflation. Frito Lay's organic revenue rose 3.5% from the prior year, with operating profits rising by a quicker 5%. The North American beverage business bounced back from a mixed second quarter, notching a 3% increase in organic revenue and a 10% gain in operating profits.
Coca-Cola will announce its third-quarter earnings on Oct. 26. Coke's organic revenue, which excludes the impact of currency fluctuations, rose 3% in the second quarter on the the back of momentum globally for sports drinks, teas, packaged water and energy drinks. Operating profit excluding one-time items rose 10% from the prior year.