Coke Gets Corny (1972-82)
Equilibrium returned, but prices spiked again twice in the succeeding two decades. In 1972, supply shortfalls, rising demand, unrest in Pakistan, and the devaluation of the dollar all contributed to a large increase in the price of sugar, rising from 5¢/lb in December of 1971 to 9¢ in March 1972. At the time newspapers called it an ‘almost vertical rise in sugar prices.’ But that was nothing compared with what was to come. By February of 1974, thanks to rising inflation, anticipation of rising demand from China, rumours of a large purchase by the USSR on global markets, large purchases by Arab nations, a bad European harvest, and the perception of imminent shortages, the price of a pound of sugar broke 20¢/lb, before sprinting to over 65¢ in November. Later reports also claimed that the Russians had speculated on the futures market in anticipation of these rises. Outrage at the sugar refiners’ newfound profits became widespread, and the US federal government opened investigations into price-fixing.
In the face of unprecedented prices, nutritionists were giddy at the prospect of a pullback in consumption, but the president of Waldbaum Supermarkets was sceptical: ‘Sugar happens to be the most delicious food there is, it seems, and people want to indulge themselves.’ His confidence was misplaced. US per capita consumption of refined sugar fell indeed, from 103 pounds in 1973 to 90 in 1975. The price spikes in sugar stimulated interest in alternative and artificial sweeteners. Little surprise that in 1974 Coca-Cola moved to allow high-fructose corn syrup in sodas like Sprite and Fanta. The tumult in the sugar market captured people’s imaginations as it altered their beverages. A movie was even released four years after the fact about a bureaucrat trying to profit from it, called Le Sucre, starring Gérard Depardieu.
After falling from its highs thanks to supply increases, the price of sugar again spiked in 1980 due to crop shortfalls in Russia and Cuba. In October 1980, futures for March delivery reached over 45¢/lb, up from under 14¢ in the same month of the previous year. Hershey’s confirmed sugar addicts’ fears by reducing the size of popular products like Kit-Kats and Reese’s. Coca-Cola finally allowed bottlers to use corn syrup to sweeten their flagship product, permitting up to a 50% share. And newspapers offered sugar-free dessert recipe—for example, ‘sugarless spicy raisin bars’—to cash-strapped, sweet-toothed readers.