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PepsiCo to Cut Salt, Sugar in Food

Last week, in an address to the Grocery Manufacturer’s Association, First Lady Michelle Obama asked the nation’s largest food makers to reduce the amount of salt, sugar, and fat in their products.

“We need you not just to tweak around the edges, but to entirely rethink the products that you’re offering,” she said. “That starts with revamping or ramping up your efforts to reformulate your products, particularly those aimed at kids.”

Corporations immediately responded. On March 17, one day after Mrs. Obama’s speech to grocers, Kraft announced a plan to cut salt in its products sold in North America by 10 percent over the next two years. ConAgra Foods Inc. and Campbell Soup Co. have also announced sodium cuts.

PepsiCo Inc., however, has trumped all other efforts. At the PepsiCo Investors Meeting held at Yankee Stadium March 22-23, CEO Indra Nooyi announced that PepsiCo will cut sodium in each serving of its key brands by one-fourth in five years. In addition, the company plans to cut the average added sugar per serving by 25 percent and saturated fat per serving by 15 percent over the next ten years, as well as adding more whole grains, fruits, and vegetables into a variety of its products.

The company also pledged to remove full-calorie sweetened drinks from schools worldwide by 2012.

Presented in part as an investment, Nooyi said PepsiCo plans to triple sales of its healthier fare and make other changes to improve nutrition. This includes expanding healthy brands such as Quaker, Naked juice, Tropicana, and Tazo tea while developing more low-calorie and zero-calorie sweeteners and salts.

During the event, Nooyi told investors that governments around the world are exerting pressure to improve nutrition, and so instead of waiting for mandates “we’re off doing our thing because the consumer is shifting.”

“The potential for the growth of this market is enormous, and for a player who wants to play in this market intelligently, the opportunities are really incredible,” she said Monday.

Although PepsiCo is better known for its junk food brands such as Lays potato chips and Pepsi soft drinks, Nooyi’s strategy is to capture the consumer movement towards “good-for-you” foods. According to Gerry Khermouch, editor of Beverage Business Insights, people are willing to pay more for products perceived as healthier.

“Where people see that value, they’re willing to pay,” he said.

The announcement may not be entirely economic, however. According to Eddie Gehman Kohan, the editor of food politics blog Obama Foodorama, the move by PepsiCo is a direct response to Mrs. Obama’s Let’s Move! campaign to reduce childhood obesity.

“Nooyi has much interest in White House initiatives to make corporate foods healthier,” she wrote on Monday. “She led the creation of the Healthy Weight Commitment Foundation last Fall, a coalition of food makers that seeks to boost nutrition awareness. Nooyi also serves on a Treasury advisory board for trade with India and East Asia.”    

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