Reducing sugar (PEP)
PepsiCo Europe said it would cut the average level of added sugars across its entire soft drinks range by 25% by 2025 from a 2019 baseline. The company outlined its goals as part of its Code of Conduct for Responsible Business and Marketing Practices. UNESDA, the soft drink industry’s trade group in Europe, announced a new commitment to reducing the average added sugars in beverages by another 10% across Europe. PepsiCo is targeting a 50% sugar reduction by 2030. The company believes that there is still much potential change in the ingredients to achieve those targets. PepsiCo points to the U.K., where over 80% of the beverages it sells are sugar-free.
Sugar-free is a movement that continues to gain traction. Western Europe is ahead of the U.S., but the trend seems likely to build. Supplies of erythritol and sugar allulose, two particularly in-demand non-sugar sweeteners, are both short of demand.
Two sugarless IPOs (ANDA, ZVIA)
Zevia, a zero-calorie soda company, recently filed its S-1. Sales grew 25% in the year ended May 16, 2021, outpacing the 9% growth for the zero-calorie soda category. Zevia uses stevia, a natural extract of a plant, as its sweetener. While other companies no longer use stevia as a sweetener due to its taste, Zevia has developed flavors that complement it.
Stryve Foods is nearing the closing of its SPAC merger. Stryve sells biltong snacks, a sugar-free air-dried meat snack that has no preservatives. Stryve is the only large-scale manufacturer approved by the USDA to make biltong. Most beef jerky in the U.S. contains both sugar and preservatives, sometimes in high amounts. We added Stryve Foods to our long list three weeks ago. The next step is the shareholder vote on the merger on July 19th.
Texas on-premise alcohol beverage tax receipts increase (BUD)
Texas reports its alcoholic beverages sales tax receipts monthly. In June, alcoholic beverage receipts increased 112% YOY. Compared to May, receipts increased 8.9%. That represents a higher level of tax receipts in any month in 2019, 2020, and 2021 as seen in the following chart. In Texas, bars were shut down in mid-March and allowed to re-open on May 22. In late June, bars were shut down again, then re-open again in October by county. Bars were also allowed to reclassify as restaurants since June as long as food sales exceeded alcohol sales.
