Following the announcement that PepsiCo is dropping aspartame from its diet cola in the US, Drinksinfo's Ray Rowlands analyses the potential effect this could have on the country's soda market in general and on the company in particular.

Around 30% of the US’s 40bn litre soda market is currently composed of low-calorie products, mostly colas. Indeed, faced by a tide of criticism that its products have contributed to the country’s severe obesity crisis, the soft drinks industry has placed increased emphasis on diet drinks.

Numerous low-calorie products have been introduced in recent years, aided by significant advertising and promotional support. But, despite all such efforts, the share of diet sodas has continued to fall in a market that itself is in long-term decline. Around 1bn litres of total soda drinks have evaporated from the US over the past ten years. Diet Pepsi has been one of the big losers of this trend, but PepsiCo is not alone. Diet Coke has also suffered heavy losses.

The contracting diet soda market is seen to be associated with the use of artificial sweeteners, like aspartame, which can cause taste and mouth feel issues but also arouse consumer suspicion. Many within the trade argue that the aftertaste associated with these sweeteners is the real problem. Other groups take a more cynical view, linking artificial sweeteners to a number of health side effects such as allergic reactions, cell damage, headaches and claimed links with cancer.

Aspartame has sparked controversy since it was first approved for use in the US by the Food & Drug Administration in 1981. This is despite it being one of the most thoroughly-tested and -studied food additives. According to PepsiCo, removing aspartame is the number one request by its customers, though not because of any health issues, merely due to taste. In acknowledgement of this, PepsiCo North America Beverages announced late last month that it is to drop aspartame as a sweetener for its US range of diet colas (but not Pepsi Max). The change applies to all variants of Diet Pepsi, including Caffeine Free and Wild Cherry.

An aspartame-free Diet Pepsi, the company’s biggest diet soda in the US and the country’s second largest low-calorie cola brand after Diet Coke, is due for release this summer. Instead of aspartame, the drink will be sweetened with sucralose and acesulfame-potassium. The company claims that the new Diet Pepsi will taste the same as the old one, whilst lettering on the new Diet Pepsi packs will proclaim. "Now Aspartame Free".

PepsiCo has spent a long time trying to develop a new sweetener that will counter public concerns but still appeal to consumer taste buds. Already, in the past three or four years, we have seen the international release of Pepsi Next and Pepsi True containing the natural sweetener stevia. Curiously, the US version of Pepsi Next, launched nationally in 2012, is actually artificially-sweetened, though it no longer contains aspartame as it once did.

Doing away with aspartame in Diet Pepsi is a bold move by PepsiCo and may possibly translate into a cost saving. Sucralose is three times sweeter than aspartame and so presumably less will be needed per sales unit. However, whilst appealing to its own customers, the new formulation may actually cause a McCarthy-style witch hunt by giving credibility to unfounded claims that aspartame is harmful. This could have a potentially devastating effect on the sales of competing products still using this artificial sweetener. This would not be good news for a suffering US soda market that has already seen a 10% drop in volume over the last five years alone.

For the moment, PepsiCo says it has no plans to replace aspartame in its other diet beverages so these could also be at risk from such a possible backlash.

The removal of aspartame is not without risks to the actual Diet Pepsi brand either. Tampering with the formula could alienate existing drinkers who, despite reassurance that the taste of the product will remain the same, may still sense real or imagery changes in flavour. PepsiCo certainly won’t want a repeat of the American public's hostile reaction to the launch of New Coke in the 1980s. It also needs to be borne in mind that the new Diet Pepsi will be sweetened with sucralose and acesulfame-potassium. The negative attitudes about aspartame don't seem to extend to sucralose but clinical tests have suggested that acesulfame-potassium (ace-K) could itself pose a cancer threat.

Thirdly, is substituting one artificial sweetener for another a wise move anyway, bearing in mind that an increasing number of consumers are shifting their sights in favour of healthier food and drinks? Even fast-food chains like McDonald's are searching for more natural products to add to their menus.

It will also be interesting to see how The Coca-Cola Co reacts to the PepsiCo news. So far, the company has said that it has no plans to change sweeteners, but time will tell. According to media sources, Coca-Cola reported that North American sales of Diet Coke, which also uses aspartame, fell 5% in the first three months of this year. That potentially equates to volume losses in excess of 50m litres. Such a level of sales contraction surely calls for remedial action, if not by dropping aspartame then by what?

In late-2014 the company launched Coke Life, containing stevia, in the US. This was seen as an attempt to swing away from artificial sweeteners. Little has been heard about its initial success, but the bitter aftertaste associated with stevia-sweetened drinks may well be restricting its impact.

If PepsiCo is successful with its aspartame-free Diet Pepsi then Coco-Cola may have no option than to follow suit. But, what it is clearly trying to avoid is another New Coke fiasco.