Coca-Cola Stock: Sugar Switch Rattles Beverage Industry

Donald Trump's announcement that Coca-Cola agreed to replace high-fructose corn syrup with cane sugar in its American beverages has sent ripples through the market. The shift comes amid the "Make America Healthy Again" initiative championed by Health Secretary Robert F. Kennedy Jr., who has pushed for healthier food and beverage ingredients. While Coca-Cola has remained cautious, only stating that "details on new innovative offerings" would be shared soon, competitor PepsiCo quickly signaled readiness to follow suit if consumers demand it. The potential transition has already impacted stocks, with shares of major corn syrup producers like Archer-Daniels-Midland declining after the news broke.

Cost Concerns Loom Large

Industry analysts warn of significant financial implications for the beverage giant. Switching to cane sugar could trigger billion-dollar cost increases due to the substantial price gap between sweeteners and likely supply chain disruptions. The United States produces only about 3.6 million tons of cane sugar annually compared to 7.3 million tons of corn syrup, potentially forcing increased imports from Brazil despite Trump's recent 50% tariff on Brazilian goods. This transition threatens American corn farmers, with estimates suggesting corn prices could drop by up to 34 cents per bushel, representing $5.1 billion in losses for agricultural communities.

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Source StockWorld