Reformulation pathways shape the impact of front-of-pack nutrient grades: A discrete choice experiment on sweetener substitution

Front-of-pack (FOP) nutrient grading systems are intended to shift demand toward healthier products and to incentivize reformulation. In beverages, however, favorable grades are often achieved through sugar reduction via artificial sweetener substitution, potentially creating a credibility conflict between an algorithmic "health" signal and ingredient cues that consumers interpret as artificial or non–clean label. This study tests whether the demand-side effectiveness of nutrient grades is conditional on reformulation pathways. We conducted a discrete choice experiment with 2,736 Chinese adults (12 choice tasks; opt-out included) in which generic 330 mL carbonated soft drinks varied by Nutri-Grade, sweetener strategy, flavor, and price. Random parameters logit models show a robust grade–ingredient interaction consistent with conditional signaling: the Grade A premium is substantially attenuated when paired with the artificial sweetener blend, flattening predicted choice gains from grade improvements. In monetary terms, willingness-to-pay for upgrading from Grade C to Grade A is + 2.31 RMB under cane sugar but becomes statistically indistinguishable from zero (+ 0.27 RMB) under artificial sweeteners, implying a valuation erosion of about 2.04 RMB. Latent class models reveal strong heterogeneity: a large "clean-label purist" segment (44.2%) drives grade discounting under artificial sweeteners, whereas "algorithmic health seekers" (32.5%) respond strongly to grades with minimal discounting. The findings indicate that nutrient grades function as conditional policy signals whose effectiveness depends on the reformulation strategies used to obtain favorable scores, with implications for how FOP grading policies are designed and evaluated in categories where additive-salient reformulation is prevalent.