Jones Soda: Sweet Competition
Apparently Jones Soda has decided to jettison high-fructose corn syrup and instead use pure cane sugar in all of his soft drinks, at a cost of $1 million. I’m not as current as I should be on this, but apparently CEO Peter van Stolk is making the change in part because of some debate about the health effects of HFCS:
He just got tired of all the controversy surrounding high-fructose corn syrup, a widely used sweetener made from corn starch. In a years-long debate, some scientists, doctors and food companies say sugar is healthier and more natural, while others say there’s little or no difference.
Okay, I have no idea about the science so I’ll stay agnostic about that I do, however, have something to say about the taste. Ever had Mexican Coke? How about Boylan Sugar Cane Cola, which is available in DC? Or perhaps you’ve tried the blessed sugar cane Dr Pepper of Dublin, Texas? Customers generally agree that they taste better than their high fructose counterparts. And that brings me to the other, more marketable reason why van Stolk is willing to pay $1 million to retrofit his machines to process sugar: his customers like it better. The article continues:
They want sugar, he said, “because it tastes better and they feel better about it because it’s pure; it’s sugar. They know what it is.”
His defense has become a common refrain for food companies that want to make ingredient changes without becoming embroiled in the confusing world of nutritional rights and wrongs.
Starbucks played the “customers want it” card recently when it announced it has stopped using milk with artificial growth hormone in some markets.
The first “Jones Pure Cane Soda” shipment went out last month, and by April everything but the company’s energy drinks will have cane sugar. Energy drinks like Whoop Ass will switch by fall.
In its usual irreverent style, Jones is accompanying the rollout with an advertising campaign that recommends people drink less soda, van Stolk said, before tossing off a couple catchphrases: “Soda’s a treat, not a food group” and, alluding to ethanol, “Corn is for cars.”
So why, if Starbucks is responding to a demand for more natural and better tasting ingredients, and Jones Soda is responding to a demand for more natural and better tasting ingredients, is the move not being mirrored by any of the major soft drink companies? The answer is U.S. sugar quotas, which keep corn cheaper than sugar. Jones Soda isn’t just paying $1 million to switch ingredients; they’re going to be paying even more to infuse their beverages with the sweet goodness of a natural product that’s artificially more expensive because American sugar farmers don’t want to compete. The price of his soft drinks will have to rise to offset a 5% increase in the cost of his ingredients, and he’ll have to be even more clever in establishing and marketing himself as a niche brand in order to survive.
I wrote about this very issue for a student paper years ago, and though I’m sure some of the numbers are outdated, I’ll still claim that it’s one of the better summaries if you’d like to understand the economics of it all. I applaud Jones Soda for making the bold move to a superior product, and I sure hope it’s not going to be cost prohibitive to ship to DC from Seattle.