Insight Focus
The use of corn syrup in soft drinks has gained attention. This comes after President Trump’s call to bring sugar back into beverage formulas. The debate dates back to the 1970s, when sugar prices soared. Since then, shifts in consumer preferences and global trade dynamics have kept the conversation about sweeteners alive.
The debate surrounding the use of corn syrup or sugar in soft drinks in the US, recently brought to the forefront by President Donald Trump’s call to bring sugar back into beverage formulas, may seem new. But the story goes back much further —and it has to do with changes in sugar price dynamics and investments in new sweeteners, such as corn syrup.
In recent decades, however, High-fructose corn syrup (HFCS), that gained ground a few decades ago, has been giving way to sugar. This transition reflects a shift in consumer habits, with the public increasingly turning to natural ingredients and less processed foods—a growing trend.
Source: USDA
At the same time, in recent years the idea that corn syrup is linked to conditions like diabetes has spread—although there is no conclusive scientific evidence. Given this scenario, the industry has increased investment in ingredients that are more readily accepted by consumers.
Meanwhile, the production of seasonal beverages has also gained prominence. A good example occurs during Passover, when sugar-sweetened soft drinks are launched—a choice motivated by the fact that, during this period, grains like corn are avoided due to religious traditions.
HFCS Drives North American Sweetener Markets
High-fructose corn syrup is produced from corn starch, whose glucose is converted into fructose through a series of chemical reactions.
This process produces two types of corn syrup: HFCS-55 and HFCS-42. HFCS-55, which contains 55% fructose and has a sweeter flavour, is typically used in the production of soft drinks.
HFCS-42, with 42% fructose and greater ease of mixing with other ingredients, is more widely used in the food industry. In the US, products such as ice cream, yogurt, cookies, and canned fruit are often sweetened with this syrup.
In much of the world, however, HFCS is rarely used. In countries like Brazil, Mexico, and China, for example, soft drinks are sweetened with sugar.
HFCS is more prevalent in North America and Eastern Europe, primarily due to price differentials. Demand for corn syrup, however, has increased in regions where incomes have expanded, driving consumption of processed foods and beverages. This is the case in countries like India and Indonesia.
Corn syrup manufacturing has also been evolving with technological innovations that can reduce costs and increase production. Despite this, the industry faces significant challenges: regulatory pressures and concerns about consumer health impacts are gaining momentum. The growing preference for sweeteners considered more natural—such as sugar, honey, and agave syrup—is another relevant factor in this scenario.
Geopolitical issues and significant changes in global trade dynamics, such as Donald Trump’s tariffs, may also impact the choice between HFCS and other sweeteners. The game is wide open—and will be decided by a wide range of factors.
The Origins of the Debate
The topic first arose in the 1970s, when sugar prices soared. To give you an idea, in 1974, the commodity’s price increased by more than 200% compared to the previous year. Then, in 1980, it reached a new peak. Prices would only stabilise relatively in the following decades.
Source: Bloomberg.
The soaring cost of sugar, a key ingredient in the production of a variety of foods and beverages, even become the subject of CIA studies and investigations and has been featured extensively in major American media outlets.
Inflationary Pressures Scare the Market
One of the biggest concerns revolved around the inflationary pressure caused by the rising price of the commodity. With the US immersed in a recession that lasted from 1973 to 1975—driven by factors ranging from the Vietnam War to rising oil prices—new signs of price increases immediately raised red flags.
The dynamics of the global sugar trade, with the world amid the Cold War, were also worrying. Cuba, which had joined the communist bloc, led the world in exports—and supplied the Soviet Union.
Source: FAO.
Cuba also stood out among the largest producers, behind India and Brazil. After the collapse of the Soviet Union in 1991, sugar production in the country began to decline, and today it is reduced to less than 200,000 tons per year.
Source: FAO.
At the same time, sugar consumption was growing worldwide due to factors such as population growth and rapid urbanisation. In developed countries, the fast-food culture was also expanding, benefiting the food and beverage industry.
In the US, raw sugar consumption reached 12 million tonnes annually in the mid-1970s. Over the past 50 years, however, demand has remained relatively stable, despite the country’s economic and population growth.
Source: USDA
Corn Syrup Enters the Scene
In the 1970s, the production of high-fructose corn syrup (HFCS), developed in the previous decade in the US, was still in its infancy. The promise of attractive prices, largely due to subsidies offered to corn production, drew the industry’s attention. However, FDA approval was still pending, which was eventually granted in 1983.
The following year, beverage and food manufacturers began using it on a large scale. HFCS consumption expanded rapidly, rising from 5.38 million tonnes in 1985 to 9 million tonnes in 2000, a jump of nearly 70%. Sugar usage grew 27.5% in the same period, according to the USDA.
Source: USDA.
