On July 13, the World Health Organization (WHO) labeled the artificial sweetener aspartame as a potential carcinogen, causing concern that the verdict could hurt the multi-billion-dollar diet soda industry. Global beverage giants PepsiCo (NASDAQ:PEP) and Coca-Cola (NYSE:KO) could be at a disadvantage from the verdict since their diet sodas, namely, Diet Coke, Coke Zero, Pepsi Zero Sugar, and Diet Mountain Dew, contain the sweetener.
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Aspartame is popularly used as a sugar substitute due to its very high sweetness quotient. But this also means that soda makers can use aspartame in lower concentrations to reach the desired sweetness. The positive part of the verdict is that WHO did not just label aspartame as a carcinogen but also reaffirm the recommended intake.
WHO confirmed that the safe daily limit of aspartame intake is 40 milligrams per kilogram of a person’s body weight. This implies that a person weighing 70 kg would have to drink more than nine to 14 cans of soda containing aspartame daily to face any health hazards. The International Agency for Research on Cancer (IARC), a WHO unit, identified a probable link between aspartame and a type of liver cancer and is undertaking a further study of the research.
Safe as Long as It Is Within Acceptable Limits
The safe intake limits of aspartame are not a concern for consumers who drink fewer cans of diet soda regularly. Having said that, the WHO’s verdict could provoke general caution towards the consumption of diet soda and hinder people from consuming more. Although diet sodas are not as popular as regular sodas, it could hurt sales of both Pepsi and Coca-Cola since the already small market for the beverage could diminish further. There has been an overall decline in the intake of sodas worldwide as people turn towards healthier drinks and consume more water. Meanwhile, both PepsiCo and Coca-Cola could churn out another safer alternative for aspartame or tweak the formula to continue selling their sodas.
Aspartame is a popular food sweetener and is also used in other food items, including breakfast cereals, ice cream, and chewing gum. Because of its popular usage, aspartame is also heavily researched before being used in food and drink items. Researchers note that its consumption is safe as long as it is within acceptable limits.
What is the Top Soda Company?
Below is a comparative study of the various soda companies on the TipRanks Compare stock tool. Based on the study, we can see that analysts are mostly bullish about the soda drink segment, awarding a Strong Buy or Moderate Buy consensus rating to the stocks. Additionally, most stocks have a TipRanks Smart Score of 8, 9, or “Perfect 10”, implying they are highly likely to outperform market expectations.
