SWEETENER BATTLE COULD FIZZ UP

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Aspartame's sweet success could soon be tested as industry observers await government approval of a new generation of sugar substitutes.

Consultants say the Food & Drug Administration may be close to approving one or more new sweeteners already in use outside the U.S. The FDA wouldn't comment.

Among those vying for FDA approval are Splenda, the brand name for sucralose, made from sugar, and Sunett, which is acesulfame potassium, known in the industry as Ace K.

Aspartame marketer NutraSweet Co. is credited by many with re-energizing the diet soft-drink market when it came along in 1981, and now a similar boost could come from new players.

"The future is very bright for these new products," said Don Stuart, a partner at Cannondale Associates, a Wilton, Conn.-based consultancy.

Rich Nelson, VP-integrated marketing communications for NutraSweet, a subsidiary of Monsanto Co., doesn't sound worried.

"We've been competing with those sweeteners around the world for a number of years," he said.

NutraSweet, with $879 million in 1994 sales, pretty much owns the U.S. market for sugar substitutes. It's currently running several campaigns including a branding spot using cartoon character Mr. Magoo and an Equal tabletop sweetener effort with Raquel Welch, both from Ogilvy & Mather, New York.

Soft-drink marketers have been thirsting for a change. Diet drinks were flat for three years and popped back only slightly in 1994, up 2.7% in gallons from a total of 3.7 billion, according to Beverage Marketing Corp., New York.

"Everybody [in the U.S.] uses the same product and has essentially the same flavor base," said Tom Pirko, president of Bevmark. "You can only change flavor agents so much, and it still tastes like aspartame."

Soft-drink companies "are not entirely satisfied with aspartame," said Robert Cummins, an analyst with Wertheim Schroder & Co. "They still feel the taste is inferior."

Splenda claims no aftertaste, better stability than aspartame and it can be used in cooking. It already has a foothold in Canada and is also sold in other countries, including Australia, and in Latin America. Among its users are Cadbury Beverages, Corby Distilleries in liqueurs and Redpath Specialty Products, a subsidiary of Tate & Lyle, Splenda's global partner.

Johnson & Johnson's McNeil Specialty Products Co. is poised to build Splenda into the next NutraSweet, with branding on packaging and "aggressive advertising" to rival aspartame. "We're in a very ready mode," said Donna Farnandez, director of international marketing and sales for Splenda, though she wouldn't reveal if Splenda has a U.S. agency.

Splenda has been awaiting full U.S. approval since 1987 in 15 food and beverage categories.

Ace K, from Hoechst Celanese Corp., has characteristics similar to Splenda and has been in dry form use since July 1988 but awaits approval for use in liquid beverages.

In Europe, PepsiCo already uses an Ace K-aspartame blend in Pepsi Max. In Canada, Pepsi blends Ace K and sugar in its products. In fact, some executives familiar with Pepsi XL, Pepsi's new U.S. mid-calorie entry, believe it may be just an interim product until the ingredients for Pepsi Max are approved here.

Jim Luscombe, Sunett marketing manager, said Coca-Cola Co. decided in February to begin using an Ace K blend in Canada for Diet Coke. It hasn't reached shelves yet.

Hoechst actively encourages blending Ace K with other sweeteners and doesn't plan major branding like Splenda.

For NutraSweet, the result of blending has been the removal of its logo on soft-drink packaging, an undoing of the company's bulldozer branding efforts, which some say left manufacturers with a bitter aftertaste.

"Attitudes toward NutraSweet are not good, particularly with beverage companies," said Paul Kelly, a consultant with Silvermine Consulting, Westport, Conn. "They were the only player in town and they acted like it."

The company's patent expired in December 1992, but it hasn't lost much ground to other aspartame makers, in part because it has lowered the price.

NutraSweet is even working on a new product itself, Sweetener 2000, but it won't be ready for at least two years.

In the meantime, said Cannondale's Mr. Stuart, "They've done a good job of branding, and [value pricing] may help them ride this out."

Pat Sloan to this story.

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