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Coca-Cola, Pepsico & Others Agree to Limit Sugar in Products

The recent health campaign to prevent diabetes in Singapore gained strength when seven major beverage companies including The Coca-Cola Company KO, Pepsico, Inc. PEP and Nestle pledged to bring down the amount of sugar in their products to 12% or lower by 2020.

To mitigate health risks such as diabetes, obesity and so on, many western nations have taken measures like raising taxes on sugar-rich products. Singapore, one of the first such countries in Asia, has adopted similar measures to target sweetened drinks and raise health awareness.

Increasing awareness promoted by the governments of different Asian countries along with a global shift in preference toward healthier consumption has been proving to be a challenge for the beverage industry of late. Moreover, the trend in the global beverage business has been sluggish due to lower demand for carbonated soft drinks or CSDs and artificial sweeteners. To counter these challenges, beverage firms have been reworking on their recipes with the aim of coming up with healthier products with lower sugar content.

Singapore-based Yeo Hiap Seng and F&N Foods, Malaysia Dairy Industries and Japan’s Pokka have also decided on pledging to the same. According to the health ministry of Singapore, these seven companies manufacture 70% of pre-packaged sweetened drinks in the country and can bring about a reduction in sugar consumption of approximately 330 US tons (or 300,000 kilograms) a year.

In an attempt to meet the changing needs of consumers, 80% of PepsiCo’s drinks in Singapore already contain 12%or lesser of added sugar. The company last year planned to cut sugar in its products globally so that two-thirds of its products would have less than 100 calories per 12 ounce by 2025.

Coca-Cola also pledged to cut sugar in more than 500 of its drinks this year. According to the company, 30%of its 3,900 beverages contain negligible amount of sugar and 97% of its products sold in Singapore, including the eponymous soda, have less than 12% sugar.

However, the impact of the pledge is yet to be seen as most beverage companies have argued that their products already have low sugar levels. Nevertheless, the active measures being taken by the beverage industry might help address sugar-related health issues.

Zacks Rank and Stocks to Consider

Coca-Cola currently carries a Zacks Rank #3 (Hold), while Pepsico carries Zacks Rank #2 (Buy).

A few other stocks to consider in the same industry are Coca-Cola European Partners PLC CCE, sporting a Zacks Rank #1 (Strong Buy),and New Age Beverage Corporation NBEV carryingwith a Zacks Rank #2.You can see  the complete list of today’s Zacks #1 Rank stocks here.

Coca-Cola European Partners’ current year earnings are expected to increase 17.9%.

The current year earnings of New Age Beverage are expected to increase 205.0%.

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Coca-Cola European Partners PLC (CCE): Free Stock Analysis Report
 
Coca-Cola Company (The) (KO): Free Stock Analysis Report
 
Pepsico, Inc. (PEP): Free Stock Analysis Report
 
New Age Beverage Corporation (NBEV): Get Free Report
 
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