Thirsty sweet tooth? Soda company has fix

By Susan Salisbury

Friday, April 20, 2007

Seattle-based Jones Soda Co. has a reputation for edgy flavors such as turkey-and-gravy and blue bubblegum.

Now it's taking the lead again with the launch of the only nationally branded 12-ounce canned soda sweetened with pure cane sugar - and that makes Florida farmers happy.

The Jones slogan? "Corn is for cars. Sugar is for soda."

Previously, the company's beverages were sweetened with high-fructose corn syrup, which is used by most soft-drink makers including the two giants, PepsiCo Inc. of Purchase, N.Y., and Atlanta-based Coca-Cola Co.

Domino Foods Inc., owned by Florida Crystals Corp. of West Palm Beach and the Sugar Cane Growers Cooperative of Florida in Belle Glade, is a key supplier of the cane sugar Jones is using, said Brian O'Malley, president and CEO of Yonkers, N.Y.-based Domino.

"Sugar has always been the gold standard of sweeteners," said Barbara Miedema, spokeswoman for the growers cooperative. "We are proud to be a supplier."

Until the early 1980s, soft drinks were sweetened with sugar in the form of an invert liquid sugar, Miedema said. Then sugar prices went up and soft-drink manufacturers began using high-fructose corn syrup, which had been newly formulated for beverages.

Over the last few years, a controversy has risen over the corn syrup, with some arguing that it is less healthful than sugar.

"We have always felt cane sugar is a better sweetener," said Peter van Stolk, chief executive officer and president of Jones Soda. "It has a cleaner taste. Sugar has a nicer mouth feel. It is not thick."

Since March, all the company's soda products have been made with cane sugar, he said.

"We have switched everything over," van Stolk said. "There is nothing we make in Jones Soda that has high-fructose corn syrup except our energy drink, and we're switching that in the third quarter."

Van Stolk said the pure-cane canned sodas will be available in Florida at Target, Wal-Mart, Albertson's, Kmart, Costco and Sam's Club by the first week of May. Flavors include strawberry lime, berry lemonade, fufu berry, green apple, lemon drop and root beer. The cans will be offered in 12-packs with prices averaging $3.99 to $4.29, about the same prices as four-packs of the bottled versions.

The move to aluminum cans gives Jones, which launched its first canned sodas with high-fructose corn syrup in January, a chance to gain market share. Bottled soft drinks account for $500 million of the market, while the market for canned carbonated drinks is $70 billion, van Stolk said.

"It is important for us to get traction on the cans," he said. "... Coke does not sell anything in glass. It's all cans and plastic."

Jones Soda (Nasdaq: JSDA) has been on a market roll lately. Exactly a year ago today, shares were trading at $7.26. On Thursday, shares closed at $26.94, after hitting a high earlier in the week of $32.50. The stock's value has risen 259 percent over the past year.

The recent return to cane sugar in beverages was started by smaller regional companies.

"I think cane sugar is somewhat evocative of the past," said John Sicher, editor and publisher of Bedford Hills, N.Y.-based Beverage Digest. "It probably has a sweet spot in some consumers' memories."

Romano's Italian Soda, based in Corvallis, Ore., began production of its pure cane-sugar sodas in 2005, General Manager Gina Pastega said. Like Jones, Romano's wanted to differentiate itself and give an alternative to consumers who believe sugar is healthier than high-fructose corn syrup.

"More and more people feel that the cane sugar is more natural in that the body can digest it a little easier," Pastega said.

Pepsi-Cola North America spokeswoman Nicole Bradley said a cane-sugar soft-drink line is one of the many new products the company is considering, but nothing is definite.

Sugar recently has narrowed the price gap with high-fructose corn syrup, as corn's use for fuel ethanol has increased its demand.

"If we can get people excited about pure-cane soda, maybe the larger companies will make changes," van Stolk said.

Palm Beach Post Staff Writer