The New York Budgets

Tag: Beverage

  • Coca-Cola Pours Resources Into Solving Beverage Industry Crisis

    Coca-Cola Pours Resources Into Solving Beverage Industry Crisis

    In an era where artificial intelligence is reshaping industries from finance to entertainment, The Coca-Cola Company is harnessing its power to tackle one of the most pressing crises in the global food supply chain: the impending extinction of oranges. Best known for its fizzy flagship soda that has quenched thirsts for over a century, Coca-Cola is quietly battling a silent killer threatening its juice empire. The beverage behemoth announced this week that it has joined the Massachusetts Institute of Technology’s (MIT) Generative AI Impact Consortium as a founding member, launching an ambitious initiative dubbed “Save the Orange” to combat citrus greening disease, or Huanglongbing (HLB). This unexpected foray into AI-driven agricultural innovation underscores not just Coca-Cola’s diversification beyond carbonated drinks but also its strategic imperative to secure a vital ingredient amid a 20-year decline in U.S. orange production.

    The move comes at a critical juncture for the $45 billion company, whose portfolio includes powerhouse juice brands like Minute Maid and Simply—household names synonymous with breakfast tables and school lunches. For decades, these labels have dominated the orange juice market, but their core ingredient is under siege. HLB, a bacterial scourge spread by the Asian citrus psyllid insect, has ravaged citrus groves worldwide since its U.S. debut in Florida two decades ago. Infected trees produce bitter, misshapen fruit, stunt in growth, and eventually die, leaving farmers with no cure and billions in losses. Without intervention, experts predict the global orange supply could vanish within 25 years, spelling disaster for juice processors, consumers, and the broader economy.

    Coca-Cola’s entry into the MIT consortium marks a pivotal shift, blending its supply chain expertise with cutting-edge AI to accelerate solutions. The consortium, which includes tech titans like OpenAI, semiconductor leader Analog Devices (ADI), India’s Tata Group, South Korea’s SK Telecom, and TWG Global, aims to deploy generative AI for real-world challenges. Coca-Cola’s “Save the Orange” project, developed in partnership with Brazil’s Fundecitrus research lab and biotech firm Invaio Sciences, will leverage AI to simulate data, compress research timelines from years to months, and integrate agritech, biotech, and life sciences. “Citrus greening has impacted farmers for over 15 years; now it’s high time to combine Generative AI with AgriTech, Biotech, and Life Science to accelerate research and innovation,” said Pratik Thakar, Coca-Cola’s Global Vice President and Head of Generative AI, in the announcement.

    This isn’t mere philanthropy; it’s a business lifeline. Orange juice remains a cornerstone of Coca-Cola’s non-carbonated portfolio, contributing significantly to its $12.5 billion in second-quarter 2025 net revenues, which rose 1% year-over-year despite a 2% dip in unit case volume. While the company doesn’t break out Minute Maid or Simply sales separately, it highlighted gains in market share for nonalcoholic ready-to-drink beverages, with juice playing a starring role. Globally, the juice, value-added dairy, and plant-based segment saw a 4% volume decline in Q2, offset by growth in Latin America but dragged by Asia Pacific. Yet, through revenue growth management strategies—like introducing affordable single-serve juice options in emerging markets—Coca-Cola added over 130 million transactions year-to-date, demonstrating resilience amid supply pressures.

    The HLB crisis has been brewing for years, but its toll on U.S. production is stark. Florida, once the world’s orange powerhouse, has seen output plummet 90% from 2005 to 2023, according to the Farm Bureau, with nearly every tree infected. Nationally, the U.S. now ranks sixth in global orange production, supplying just 5% of the world’s oranges, per USDA data. From 2015 to 2024, domestic output fell at a compound annual rate of 9%, with year-over-year drops averaging 10%. The 2024-2025 season was particularly brutal: Hurricanes Debby, Helene, and Milton battered groves, leading to a 30% harvest shortfall compared to the prior year. Overall, citrus acreage in Florida shrank 55.6% from 2004 to 2023, from 748,555 acres to 332,256 acres, as growers ripped out infected trees. In the past decade alone, HLB has slashed fresh citrus markets by 21% and juice oranges by 72%.

    The economic ripple effects are profound. Florida’s citrus industry, which once generated $9 billion annually, has lost billions to HLB, forcing reliance on imports from Brazil, Mexico, and Chile. But recent U.S. tariffs on foreign goods—escalating under the current administration—threaten to inflate costs and exacerbate shortages. Major brands, including Coca-Cola’s, now blend imported juice, but this patchwork solution can’t sustain indefinitely. “The loss of fresh oranges and other citrus is a real possibility, and that would seriously impact our health,” warned Carolyn Slupsky, a biochemist and nutritionist at the University of California, Davis. Beyond nutrition—citrus provides essential vitamin C and fiber—rising juice prices could squeeze consumers already facing inflation in groceries.

    Coca-Cola’s “Save the Orange” initiative targets HLB head-on. The disease, first detected in Florida in 2005, clogs the trees’ vascular systems, preventing nutrient flow and yielding lopsided, green-tinged fruit that’s bitter and seedless. No cure exists, but the project will use AI to model disease spread, optimize treatments, and discover new biological defenses. Key partners include Invaio Sciences, whose Trecise treatment—a trunk-injected antibiotic—has shown promise in halting HLB progression and slashing pesticide use by up to 90%. Launched in Florida in 2023, Trecise is expanding to Brazil and Mexico. “We’ve seen firsthand the devastation of this disease, and the proven efficacy of our Trecise treatment in stopping it,” said Amy O’Shea, CEO of Invaio Sciences and CEO Partner at Flagship Pioneering. “Treatments and application technologies will be critical components of a multi-pronged coordinated effort to restore tree health, citrus production, and farmer profitability.”

    The consortium’s approach mirrors collaborative “hackathons,” uniting MIT professors in computer science, data science, and public policy with industry experts. Fundecitrus, a Brazilian nonprofit, brings decades of citrus research, emphasizing science-driven innovation. “Through the ‘Save the Orange’ partnership with The Coca-Cola Company, Fundecitrus reaffirms its long-standing commitment to science-driven solutions, transparency, and innovation,” said Executive Director Antonio Juliano Ayres. Early efforts focus on AI-simulated data to fast-track gene editing and resistant tree breeding—techniques like those from USDA researchers identifying HLB-detecting genes from potatoes.

    For Coca-Cola, this aligns with broader AI integration across its operations, from R&D to supply chain optimization. “This represents a best-of-the-best combination of industry practicality and academic rigor,” Thakar noted. “It also perfectly complements our commitment to make a difference by using AI in service of humanity.” The company, which employs over 700,000 worldwide through its bottling network, sees AI as a tool for sustainability, echoing initiatives like water replenishment and packaging recycling.

    Yet, challenges loom. HLB’s resilience—bacteria hide deep in roots, evading sprays—has led to resistance in psyllids, prompting calls for eco-friendly alternatives. Hurricanes compound the issue, with losses from 2024 storms estimated in the hundreds of millions. Florida’s 21 certified nurseries are propagating HLB-tolerant trees, but scaling takes time. Globally, HLB has hit Brazil and China hard, too, tightening supply.

    Investors view Coca-Cola’s pivot positively. Shares of KO rose 1.2% following the announcement, buoyed by Q2 results showing 5% organic revenue growth and 4% comparable EPS increase, despite volume headwinds from weather and tough comps. Analysts praise the proactive stance: “As a leading provider of fruit juice worldwide, we have a unique perspective on the critical issue of citrus greening,” said Christina Ruggiero, Coca-Cola’s President of Global Nutrition. The company stands with farmers, collaborating on viable solutions.

    Ultimately, “Save the Orange” could redefine corporate responsibility in agribusiness. By merging AI with agriculture, Coca-Cola isn’t just protecting its bottom line—it’s safeguarding a staple of American diets and economies. As Thakar put it, this “demands a unique level of partnership” to avert catastrophe. Whether it succeeds, the initiative signals a future where tech giants and beverage icons unite against existential threats, one orange at a time.

  • Chief Executive of Japan’s Beverage Giant Suntory Resigns Amid Drug Probe

    Chief Executive of Japan’s Beverage Giant Suntory Resigns Amid Drug Probe

    Tokyo — In a stunning turn of events that underscores the unforgiving rigidity of Japan’s drug laws, Takeshi Niinami, the charismatic and outspoken CEO of Suntory Holdings, has stepped down amid a police investigation into his alleged purchase of supplements containing tetrahydrocannabinol (THC), the psychoactive compound derived from cannabis. At 66, Niinami wasn’t just another corporate executive; he was a fixture in Japan’s business elite, a Harvard Business School graduate who bridged the gap between traditional family-run conglomerates and global capitalism. His resignation, effective September 1, 2024, raises uncomfortable questions about the intersection of personal missteps, cultural conservatism, and the high-stakes world of international business.

    The scandal erupted into public view this week, with Suntory confirming Niinami’s departure during a press conference in Tokyo on Tuesday. According to company president Nobuhiro Torii—a great-grandson of Suntory’s founder Shinjiro Torii—Niinami first informed colleagues on August 22 that he was under police scrutiny. Investigators from Fukuoka Prefectural Police had searched his Tokyo home, suspecting he received products containing cannabis-derived substances from an overseas acquaintance. Media outlets, including public broadcaster NHK and the Tokyo Shimbun, reported that the supplements in question may have included THC, which is strictly prohibited in Japan regardless of its intended use—recreational, medical, or otherwise.

    Niinami, for his part, has vehemently denied any intentional wrongdoing. In an interview with the Asahi newspaper published Tuesday evening, he insisted, “I was not aware that it was an illegal supplement. I am innocent.” He explained that he purchased the items under the assumption they were legal, perhaps mistaking them for products containing cannabidiol (CBD), which is permissible in Japan and widely available in health stores. Yet, in a country where possession of THC can land someone in prison for up to seven years, and trafficking carries even harsher penalties, assumptions can be costly. Niinami told the company he felt compelled to resign to avoid fracturing Suntory’s unity, a decision that Torii described as a “real shame,” praising his former boss as a “bold, decisive leader who got things done.”

    This isn’t just a personal downfall; it’s a blow to corporate Japan. Niinami was the first outsider to lead Suntory, the family-founded beverage behemoth known for its whiskies, beers, and soft drinks like Orangina. Under his tenure since 2014, the company ballooned its revenue and profits, most notably through the $16 billion acquisition of U.S. spirits maker Beam (including debt), which catapulted Suntory into the global spotlight. He was the face of Japanese business on the world stage—frequently appearing at Davos, advising multiple prime ministers on economic policy, and chairing the influential Keizai Doyukai business lobby. Fluent in English, he often graced international media like CNN, opining on everything from Japan’s economy to central bank strategies. His scheduled press conference with Keizai Doyukai on Wednesday is now poised to be a media circus, where he’ll likely elaborate on the saga.

    But let’s pause for a moment of opinionated reflection: Japan’s draconian drug laws, while rooted in a cultural aversion to substances that dates back decades, seem increasingly out of step with global trends. Countries like the U.S., Canada, and even parts of Europe have liberalized cannabis regulations, distinguishing between THC and CBD, and recognizing medical benefits. In Japan, there’s no such nuance—it’s all outlawed, full stop. This zero-tolerance approach has ensnared high-profile figures before: Just last year, Olympus Corp. fired its German CEO Stefan Kaufmann over allegations of illegal drug purchases, and in 2015, Toyota executive Julie Hamp, an American, was arrested for importing oxycodone (though later released). These cases highlight a pattern: Foreign-influenced executives, often more accustomed to lenient Western norms, clash with Japan’s unyielding legal framework.

    Is Niinami a victim of this cultural chasm? Possibly. As a global traveler and Harvard alum who previously helmed convenience store chain Lawson, he embodies the modern Japanese leader—outward-looking and ambitious. Yet, his alleged oversight speaks to a broader issue: In an era of e-commerce and international shipping, how can busy executives navigate the minefield of varying global regulations? If the supplements were indeed sent from abroad, as reports suggest (tied to a man arrested in July), it underscores the risks of cross-border transactions. Police have questioned Niinami and searched his home, but no confirmation of possession or use has emerged. Until proven otherwise, he deserves the presumption of innocence, not the swift corporate exile that followed.

    Suntory, meanwhile, is steering back toward its roots. With Niinami’s exit, Torii assumes full control, marking a return to family leadership after a brief experiment with external talent. The company, immortalized in Sofia Coppola’s 2003 film “Lost in Translation” where Bill Murray’s character hawked its whisky amid Tokyo’s neon haze, remains a cultural icon. Shares in its listed unit, Suntory Beverage & Food, even rose 3% on Tuesday, suggesting investors view this as a contained crisis rather than a systemic rot.

    In the end, Niinami’s resignation feels like a cautionary tale for Japan’s business world: Innovation and global expansion are prized, but stray too far from conservative norms, and the fall is precipitous. He has no plans to step down from Keizai Doyukai, per the Asahi report, which could allow him to salvage his legacy as a thought leader. But for Suntory, the loss of such a dynamic figure is undeniable. As Torii lamented, it’s a shame they couldn’t “continue as a team.” In a nation grappling with economic stagnation and demographic decline, Japan needs more leaders like Niinami—bold and unapologetic—not fewer. Whether this probe uncovers malice or mere misunderstanding will determine if his story ends in redemption or regret. For now, it’s a sobering reminder that even the mightiest CEOs aren’t above the law, especially in Japan.

  • Coca-Cola to launch new version of Coke sweetened with U.S.-grown cane sugar

    Coca-Cola to launch new version of Coke sweetened with U.S.-grown cane sugar

    Coca-Cola said it will roll out a new version of its signature soft drink that will be sweetened with cane sugar instead of corn syrup — days after President Trump posted about it on social media.

    “As part of its ongoing innovation agenda, this fall in the United States, the company plans to launch an offering made with US cane sugar to expand its Trademark Coca-Cola product range,” the company said in a Tuesday statement.

    The Coke made with US cane sugar will complement the company’s existing product line, the Atlanta-based company added.

    Coca-Cola produced for the US market is typically sweetened with corn syrup, while the company uses cane sugar in some other countries, including Mexico and various European countries.

    The Tuesday announcement came days after President Donald Trump wrote on Truth Social that he had “been speaking to Coca-Cola about using REAL Cane Sugar in Coke in the United States, and they have agreed to do so.”

    Trump — who is famously an avid consumer of Diet Coke — also said, “This will be a very good move by them — You’ll see. It’s just better!”

    Coca-Cola initially stopped short of confirming Trump’s post. The company told NBC News last week that it appreciated Trump’s “enthusiasm for our iconic Coca-Cola brand” but that “details…will be shared soon.”

    In the United States, Coca-Cola made with cane sugar is colloquially known as “Mexican Coke” as it’s often imported from the United States’ southern neighbor.

    Coca-Cola CEO James Quincey discussed the coming product on an earnings call Tuesday morning, telling investors that the company already uses cane sugar in the company’s tea, lemonade, coffee and Vitamin Water offerings.

    “I think that it will be an enduring option for consumers,” he said.

    “We are definitely looking to use the whole toolkit of available sweetening options where there are consumer preferences.”

    The Trump administration’s “Make America Healthy Again” initiative, named for the social movement aligned with Health and Human Services Secretary Robert F. Kennedy Jr., has pushed food companies to alter their formulations to remove ingredients like artificial dyes.

    But medical experts warn that health outcomes may not change with the switch in sweetener.

    Dr. Dariush Mozaffarian, a cardiologist and director of the Food is Medicine Institute at the Friedman School of Nutrition Science and Policy at Tufts University, told NBC News that “both high fructose corn syrup and cane sugar are about 50% fructose, 50% glucose, and have identical metabolic effects.”

    “That is, both can equally raise the risk for obesity, diabetes, high triglycerides and blood pressure,” he said, adding that “both provide the same number of calories, but the body processes them differently.”

    The move to transition to cane sugar was also met with pushback from agricultural interests.

    John Bode, the CEO of the Corn Refiners Association, said last week that “replacing high fructose corn syrup with cane sugar doesn’t make sense” given Trump’s support of American farmers.

    “Replacing high fructose corn syrup with cane sugar would cost thousands of American food manufacturing jobs, depress farm income, and boost imports of foreign sugar, all with no nutritional benefit,” he added in a statement.

    Sourcing could also be a factor. US cane sugar is primarily produced in Texas, Florida and Louisiana, according to the Agriculture Department. However, domestic production accounts for only 30% of total US sugar supply. The rest comes from sugar beets or is imported.

    Trump has long tied himself publicly to Coca-Cola products. In 2012, he said on Twitter that Coke was not happy with him but “that’s ok, I’ll still keep drinking that garbage.”

    Trump also wrote on social media the same year that drinking Diet Coke “makes you happy.”

    In January, Quincey traveled to Trump’s Mar-a-Lago resort and presented him with a custom bottle commemorating his upcoming inauguration.

    “President Trump pledged to Make America Healthy Again, and that starts with what we eat and drink,” White House spokesperson Kush Desai told The NY Budgets.

    “The Trump administration is committed to partnering with food and beverage companies to expand options for the American people.” 

    The NY Budgets has sought comment from HHS, Coca-Cola and the Corn Refiners Association.