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PepsiCo Goes Biotech, Cuts Sugar With "S2383"

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An article in this week's New Yorker by John Seabrook takes a look at PepsiCo chairwoman Indra Nooyi and her quest to transform the food and beverage giant into a company that "does good."

One of the initiatives Nooyi has undertaken is the reduction of salt and sugar across all product lines.

Seabrook mentions taste-testing a secret, unnamed "scientifically advantaged" (Pepsi's words) cola that will hit the market within the next six months. It evidently tastes no different than regular Pepsi, but contains 60% less sugar.

He writes:

I heard it described around headquarters as "a very big deal." It uses "flavor enhancers" -- biotech products that are not sweet themselves but increase the intensity of sweeteners, to re-create a full-sugar taste.

Pepsi's partner on the project, a small, publicly-traded company out of San Diego, is not named in the article. The outfit, called Senomyx, created an ingredient called S2383, one of five "flavor programs" currently underway, which work by
"activating or blocking receptors in the mouth that are responsible for taste."

According to the company's website, Senomyx has:

...discovered or in-licensed many of the key receptors that mediate taste in humans. Using isolated human taste receptors, we created proprietary taste receptor-based assay systems that provide a biochemical or electronic readout when a flavor ingredient interacts with the receptor. To enable faster discovery of new flavors, we integrated our assays into a robot-controlled automated system that uses plates containing an array of individual fluid wells, each of which can screen a different sample from our libraries of approximately 800,000 artificial and natural candidate ingredients isolated from plants and other sources. Our high-throughput discovery and development process allows us to conduct millions of analyses of new potential flavor ingredients annually. This efficiency is impossible to achieve using conventional flavor discovery methods. As a result, we have identified hundreds of unique potential new flavor ingredients that could not be discovered using taste tests alone.

Regarding S2383:

The human sweet receptor is composed of two proteins called hT1R2 and hT1R3. The hT1R3 protein is shared in common with the savory receptor. Like the savory receptor, the sweet receptor is also a member of the GPCR family and is expressed on the surface of certain taste bud cells. Senomyx’s proprietary sweet receptor screening assay was used to discover S2383, a potent enhancer of the artificial sweetener sucralose.

The PepsiCo/Senomyx collaboration began in August of 2010, when the two entered into a four-year partnership, giving Pepsi "exclusive rights to Senomyx Inc.'s sweet-flavor ingredients ... for use in nonalcoholic beverage categories.

Pepsi paid $30 million up front, and "will also be entitled to $32 million in research and development payments over the four-year research period" for the use of S2383.

Indra Nooyi's "next big thing"?


No, seriously.

See also: Religious CEOs: Indra Nooyi and Most Influential CEOs: PepsiCo's Indra Nooyi Pushes for People Power, Diversity.


POSITION:  No positions in stocks mentioned.