Trump has announced that Coca-Cola will change the recipe. How might this affect business?

Coca-Cola's potential switch to using cane sugar instead of corn syrup as a beverage sweetener could lead to higher prices, supply chain disruptions and lost revenue for U.S. farmers, analysts warn. Production would have to be restructured, and sugar imports are complicated by new duties.

A possible switch by Coca-Cola and other manufacturers to use cane sugar instead of corn syrup as a sweetener would require major supply chain restructuring. It would also require changes in product labeling and increase costs, according to industry analysts quoted by Reuters.

"If Coca-Cola switches entirely from HF55 fructose syrup (with 55% fructose content) to cane sugar, the cost increase is likely to exceed $1 billion, given the current price differential between HF55 and cane sugar, and the high likelihood of further increases in the price of the latter," analyst Heather Jones of Heather Jones Research said in a research note.

The US food industry has started using corn syrup because of its cost - it is cheaper than sugar, said Ron Sterk, senior editor of SOSland Publishing, a specialized resource for the US food ingredients industry. The beverage industry uses HF55 fructose syrup, he said, while bakers use the 42% fructose version.

A complete phase-out of high-fructose corn syrup from the U.S. food industry would drive corn prices down to 34 cents a bushel, costing farmers $5.1 billion in lost income, the Corn Refiners Association said. It emphasized that it would be an "economic shock" that would result in rural job losses.

Besides the fact that cane sugar is more expensive, Coca-Cola has independent bottlers with hundreds of production sites that were originally designed to use high fructose corn syrup, said James McDonnell, partner at CIL Management Consultants. Changing the formulation will require additional investment, he added, and it is unlikely that bottling manufacturers will want to cover these costs out-of-pocket. Consumers would also be unhappy with the price hike, he noted.

Supermarket Guru editor Phil Lempert, whose commentary is published by NewsNation, agrees. According to him, abandoning corn syrup and converting Coca-Cola's production facilities to cane sugar will lead to higher prices for American consumers.

"I don't think Coca-Cola will really do that. It would raise the price. We're already having problems with cane sugar around the world, especially from Brazil. So the sourcing issue remains problematic," Lempert said.

It takes about 2.5 pounds of corn to produce one pound of high-fructose syrup, so a large-scale phase-out of corn syrup in the U.S. would reduce demand for the crop and likely lead to increased imports of cane sugar because domestic production is insufficient to meet the needs of U.S. consumers, Reuters writes.

However, according to sugar analyst Michael McDougall, Trump's ongoing trade wars are making it harder to cover the deficit.

"The sugar is likely to come from Brazil, the largest producer of cane sugar in the world. But Trump just imposed an import duty on Brazilian sugar," he explained. 

Shares of Archer Daniels Midland and Ingredion, the two largest producers of high fructose corn syrup (HFCS), fell 0.9% and 0.6%, respectively, in trading on July 17 and were losing within 1% in the premarket on Friday.

Shares of Coca-Cola were up nearly 2% on Thursday and were down 0.4% in Friday morning trading.

US President Donald Trump on July 17 wrote on social network Truth Social that he had discussed with Coca-Cola the use of "REAL cane sugar" in drinks sold in the US. "They agreed to do it," Trump stated.

Coca-Cola itself has not confirmed this. Following Trump's statement, it only said it would "soon share more information about new innovative offerings in the Coca-Cola product line."

Coca-Cola already sells drinks made with cane sugar in other markets, including Mexico, and glass bottles labeled Mexican Coke, which contain cane sugar specifically, can be found in some U.S. stores.

Coca-Cola's main competitor, PepsiCo, announced Thursday that it will use sugar in Pepsi drinks and other products if consumers want it.

This article was AI-translated and verified by a human editor