Senomyx Achieves GRAS Status for New Flavor Enhancer; PepsiCo Has Exclusive Rights for N/A Bevs

With news that flavor supplier Senomyx has received regulatory approval for its Sweetmyx product, is PepsiCo closer to a “holy grail” ingredient that CSD companies have long coveted?

Yesterday, Senomyx announced that Sweetmyx, an ingredient said to enhance the flavor profile of reduced-calorie foods and beverages, has been “determined to be Generally Recognized As Safe (GRAS) under the provisions of the Federal Food, Drug and Cosmetic Act” which is administered by the United States Food and Drug Administration (FDA). The GRAS determination was issued by the Expert Panel of the Flavor and Extract Manufacturers Association (FEMA) of the United States, a trade association for the U.S. flavor industry. The GRAS status of Sweetmyx allows PepsiCo, which has exclusive rights to use the ingredient in all non-alcoholic beverages, to begin using it this year.

“The new Sweetmyx flavor ingredient will enable the creation of lower-calorie beverages and foods that have reduced sweeteners without sacrificing taste,” John Poyhonen, President and CEO, Senomyx said in a statement.

PepsiCo, as well as rivals The Coca-Cola Co. and Dr Pepper Snapple Group, have in recent years faced sharp declines in sales of both full-calorie and diet CSDs and been under pressure to find ways to reduce the calorie count in their CSD products, albeit without the use of artificial sweeteners, such as aspartame.

PepsiCo CEO Indra Nooyi

At a business conference last year, PepsiCo CEO Indra Nooyi noted that while consumers still seek out carbonated beverages, they are increasingly concerned about high sugar levels and artificial sweeteners. Although Coke has tested products made with stevia, an all-natural, zero-calorie sweetener, in some international markets, Nooyi said that that the ingredient “does not work well in colas.” Instead, Nooyi sees potential for a strong mid-calorie segment, of which Sweetmyx could be a key part.

“I actually think there is a once-in-a-lifetime opportunity to bring the consumer back to CSD,” Nooyi said.

Some industry analysts also see the potential in technology as a way to jumpstart CSD sales. In a memo on Senomyx from May, 2013, Bonnie Herzog, Managing Director, Beverage, Tobacco & Conveneience Store Research, Wells Fargo Securities wrote that “if [PepsiCo] is able to address the changing consumer needs with lower calorie beverage offerings through technology, we think it could indeed help reinvigorate its CSD platform and potentially offer incremental growth opportunities.”

Herzog noted that Sweetmyx (which, at the time, was called S617) “offers the potential ability to reduce [high-fructose corn syrup] up to 35% and sugar up to 50% in beverage products without any effect on taste.”

While Pepsi has yet to offer any details on how it will use Sweetmyx in its products, Poyhonen noted that Senomyx is “fully engaged with our partners as they evaluate potential product opportunities.”

Swiss perfume and flavor company Firmenich has lifetime rights to commercialize Sweetmyx in food products and alcoholic beverages, with exclusive rights until March 2018, the Senomyx statement noted.

Editor’s note: The article has been amended to include information about the Flavor and Extract Manufacturers Association’s involvement in the GRAS determination of Sweetmyx.