Tuesday, May 22, 2007

Corn for cars, sugar for drinks

If you want to power your car with ethanol, you may have to pay more for your soft drinks.

Put another way, the Jones Soda Co. now seems rather Nostradamus-like in its decision to create a line of soft drinks sweetened by cane sugar rather than high fructose corn syrup (HFCS).

Huh? To explain:

At the time, the Seattle manufacturer said even though sugar costs more than the HFCS, it wanted to offer a less-fattening product.

Meanwhile, the cost of HFCS is rising. It still is cheaper than sugar, but the price gap is closing and such major producers as Coca-Cola Co. and Pepsico Inc. are keeping a close eye on the situation.

Most soda and food manufacturers switched from sugar to the cheaper HFCS starting in the late 1970s, and more joined the trend in 1980 when sugar prices spiked. This year, the diversion of corn to create ethanol fuel in the U.S. has begun pushing up prices of HFCS.

Next month, Jones will have billboards in its key markets saying "Corn is for Cars; Sugar is for Soda."

Ron Sterk, assistant editor at Milling and Baking magazine, was quoted on Forbes.com as saying it is not easy for food and beverage plants to switch to sugar because of needed reformulation in recipes and changes in equipment -- a process companies went through when they made the decision to go with HFCS 25 years ago. Soda makers and food manufacturers would use mostly liquid, not granular sugar if they were to shift back.

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