Congratulations to that one single-issue voter whose hatred for corn syrup transcends every other political issue: This is the moment you’ve been waiting for.
“I have been speaking to Coca-Cola about using REAL Cane Sugar in Coke in the United States, and they have agreed to do so,” President Trump posted on Truth Social yesterday.
For background, the majority of the world’s cane sugar is made in Brazil, where Trump just slapped a 50% tariff. The combination of higher demand for sugar from the world’s foremost soda maker and lower supply from the commodity’s key producer was a formidable force today: Raw sugar futures surged on the announcement, while Coca-Cola ended the day up 1.91%.
High-fructose corn syrup producer Archer-Daniels-Midland was less enthused about the news. The company fell 0.85% today, and ingredients maker Ingredion fell 0.61% as well.
The catch? It’s not clear Coca-Cola is totally on board with the president’s announcement: “We appreciate President Trump’s enthusiasm for our iconic Coca-Cola brand,” the company said in a statement. “More details on new innovative offerings within our Coca-Cola product range will be shared soon.”
Real sugar = real losses?
Trump’s effort to rid Coke of high-fructose corn syrup is part of a larger effort spearheaded by Secretary of Health and Human Services RFK Jr. to make American food healthier. But in the process, it’s forcing companies like Archer-Daniels Midland to adapt or die.
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The company’s business model is reliant on commodity pricing, which has been volatile in the face of climate change and tariff upheaval this year. In its first-quarter earnings call, management noted that operating profit from ADM’s biggest business segment, Ag Services & Oil Seeds, fell 52% last quarter thanks to tariffs. Meanwhile operating profits from its Starches and Sweeteners subsegment—which includes artificial corn syrup—fell 21% year over year last quarter.
With American consumers picking up fewer bags of chips as weight-loss drugs curb their appetites and the country in general getting more health-conscious, analysts are worried that companies like Archer-Daniels Midland will have less room for growth in the years ahead. Shares have tumbled 18.53% in the last 12 months.
“We're following the consumer,” PepsiCo CEO Ramon Luis Laguarta said on an earnings call today. “And if the consumer is telling us that they prefer products that have sugar and they prefer products that have natural ingredients, we will give the consumer products that have sugar and have natural ingredients.”
Looks like it’s time for artificial sweeteners to get real about their predicament.—LB