A sweet Asian fruit tempts the troubled soft drink industry

A sweet Asian fruit tempts the troubled soft drink industry

NEW YORK - An obscure melon once cultivated by Buddhist monks in China to sweeten tea could give the US$8 billion (S$10 billion) US diet soda industry a shot at winning back consumers concerned about artificial ingredients.

You won't find monk fruit in any of the soft drinks at your local convenience store. So far, shaky supplies and limited demand have kept the expensive melon on the sidelines of the sweetener industry.

But some experts think the fuzzy green fruit, which ripens to the size of an apple, could be the ingredient soda makers have sought for decades: a natural product with great taste and no calories.

When "someone figures this out and gets a taste that is low-calorie and natural, it could really be a silver bullet that catapults that company ahead," said Ali Dibadj, an analyst at Bernstein who follows the soft drink industry.

Soft drink makers are increasingly desperate for just such a miracle ingredient. Once a booming sector, diet soda has become a laggard. In the United States, consumption fell about 7 per cent this year and could shrink by 20 per cent through 2020, according to Nielsen data.

Consumers, increasingly wary of the health risks of artificial sweeteners, are ditching diet sodas for juices, teas and naturally sweetened lemonades, according to a recent Wells Fargo analysis. "We believe we are seeing a fundamental shift in consumption behaviour as diet drinkers leave the category altogether," said Bonnie Herzog, an analyst at Wells Fargo Securities.


Beverage companies have struggled to hold on to customers amid fears about the safety of FDA-approved aspartame, which has sweetened diet soda for 30 years.

The aspertame debate continues to rage on the Internet, even though the American Beverage Association says the artificial sweetener is safe for consumption.

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