If the WHO rules against aspartame, it could hurt diet soda sales or lead to new drink recipes.

The World Health Organisation confirmed how much aspartame is safe to eat on Thursday. However, the agency’s classification of aspartame as a possible carcinogen could still scare diet soda drinkers away and lead to new drink formulas.

In the last 20 years, people have been drinking less soda because they have more water or drinks with less sugar. Diet sodas, on the other hand, have been a bright spot for the group over the past few years.

Even though drinks with many calories are still the most popular, diet sodas now make up more than a quarter of sales. Coca-Cola and PepsiCo have been making money on their bets on sugar-free versions of their namesake drinks. Aspartame is in all the beverages: Diet Coke, Coke Zero, Pepsi Zero Sugar, and Diet Mountain Dew.

On Thursday, the International Agency for Research on Cancer, which is part of the WHO, found a possible link between aspartame and hepatocellular carcinoma, a type of liver cancer. WHO officials said that the possible link needs more study.

The U.S. Food and Drug Administration said it disagrees with IARC’s finding and that its scientists don’t worry about aspartame’s safety.

“FDA scientists looked at the scientific information in IARC’s review in 2021, when it was first made public, and found that the studies IARC relied on had major flaws,” the agency said.

The Joint Expert Committee on Food Additives, connected to the WHO and the Food and Agriculture Organisation of the United Nations, said Thursday in its report that the safe daily amount of the sweetener is less than 40 milligrammes per kilogramme of body weight; this confirms what was said before. Most people can only drink up to nine to fourteen cans of diet soda daily.

Even though people who drink less diet soda might not be scared off by the possible link to cancer, the news could hurt sales at least briefly.

TD Cowen says that people with higher incomes buy at least 50% more diet sodas than people with lower incomes. Analyst Vivien Azer of TD Cowen wrote in a research note last week that the WHO report could worry those customers.

The biggest risk for soda companies is how much attention this news will get. Garrett Nelson, a CFRA analyst, said in a note on June 29 that if enough people see the information, it could hurt sales of low-calorie drinks.

Gerald Pascarelli, an analyst at Wedbush, told CNBC that he thinks the story could hurt sales in the category. But the drop may only last for a short time.

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“These companies are quick to change direction and do what’s needed to keep their brands moving forward,” he said. “We think they’ll do the same thing.”

The head of the WHO’s nutrition and food safety section, Dr Francesco Branca, said that food and drink companies using aspartame should consider making their products without it.

But Hugh Johnston, PepsiCo’s Chief Financial Officer, told Reuters on Thursday that the business has no plans to stop using aspartame. He also said sugar isn’t in many of the company’s products.

Aspartame was used in Diet Pepsi until 2015 the company changed the recipe. PepsiCo returned it a year later after users said they didn’t like it. But the change lasted only a short time. In 2020, aspartame was taken out of Diet Pepsi by a company that makes drinks. Pepsi Zero Sugar is still made with it.

Nelson of CFRA says that worries about aspartame make Coke more likely to lose sales. Sugar is used in Diet Coke and Coke Zero right now, but the company could switch to something else, like stevia, in the future.

Even so, Brittany Quatrochi, an analyst at Edward Jones, said that she doesn’t think diet soda sales will take a big hit.

She said, “Consumers may switch to another sugar-free product, but this isn’t the first kind of food or drink to be called a carcinogen.”

In 2018, for example, the IARC said red meat would likely cause cancer.

Makers of diet sodas aren’t worrying over lost sales yet. The American Beverage Association, which works for companies like Coke, PepsiCo, and Keurig Dr Pepper, saw the WHO’s statement as proof that the sweetener is safe.

“With more than 40 years of science and this definitive conclusion from the WHO, consumers can be sure that aspartame is a safe choice, especially for people who want to cut sugar and calories from their diets,” ABA interim CEO Kevin Keane said in a statement.

Aspartame is found in many foods, like breakfast cereals, chewing gum, ice cream, and diet beers. It is often used instead of sugar because it is 200 times sweeter and can be used in much smaller amounts.


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