Soft Drink Industry

Growth in the soft-drink industry slowed last year, but Coca-Cola's lead over second-place Pepsi widened, two closely followed reports on the industry said Monday. The recession and price discounting were cited for the slower overall growth rate, while Coca-Cola's gains reflected its capture of two major fast-food restaurant accounts from Pepsi in 1990. Both reports also detected a slowdown in growth of the diet segment's share of the soft-drink business.

PepsiCo Inc. agreed to buy Naked Juice Co. of Azusa to expand sales of natural-juice drinks and compete with Coca-Cola Co.'s Odwalla brand. Naked Juice makes 25 fortified drinks, including a pineapple-banana protein shake. The company has annual sales of more than $150 million, the companies said Tuesday. Terms of the deal weren't disclosed. PepsiCo acquired more healthful beverage and food companies including Stacy's Pita Chips in the last year to lure consumers shunning sugary sodas.

A Miami management team dispatched by Coca-Cola's big new Atlanta bottling conglomerate has shaken up Coke's bottling operation in Los Angeles and set off a price war. In an apparent effort to stimulate lagging sales in Southern California and boost profits for the bottling conglomerate, they have reassigned the local president and other top personnel and fired at least two dozen workers. "It was like Miami Vice," observed Robert Strock, former marketing director of Coca-Cola Bottling Co.

One of E. Neville Isdell's goals when the former Coca-Cola Co. manager returned as chief executive in 2004 was to perk up U.S. sales by selling more water and sports drinks, as PepsiCo was doing to propel growth. This year he introduced more than two dozen noncarbonated drinks, including flavored Dasani water and a grape version of Powerade, a rival to PepsiCo's Gatorade. Coca-Cola's sales volume of non-soda beverages rose 7% in the second quarter. PepsiCo's jumped 23%.

Pepsi Bottling Group Inc. shares began trading on the New York Stock Exchange on Wednesday but the debut was spoiled by bad news from the soft drink industry leader Coca-Cola Co. After the biggest initial public stock offering so far this year, shares of Pepsi Bottling closed at $21.69, down $1.31 from the IPO price. Analysts said the debut was hurt by Coke's forecast on Monday that its worldwide sales will be down in the first quarter.

India Firms Want Coke Kept Out: The All-India Soft Drink Manufacturers' Assn. asked the government not to allow Coca-Cola to re-enter the Indian market. It told Prime Minister P. V. Narasimha Rao that the U.S. giant would badly hurt the domestic soft drink industry. The multinational, which shut down its Indian operation in 1977, seeks to return through a joint venture. Coca-Cola left India after refusing to reduce its equity stake to 40%. Rival Pepsi Inc.

The head of Hansen Natural Corp. couldn't be happier with the fact that competitors' "New Age" beverages are flooding the nation's markets. In the advertising blitzes for Snapple, Crystal Pepsi and Coca-Cola's Nordic Mist, Hansen Chairman Rodney Sacks sees a sparkling opportunity: a sharper consumer focus on all New Age drinks, including Hansen's Natural sodas.

Pepsi-Cola went on sale in India for the first time in 28 years today after a bitter five-year battle to sell the U.S. soft drink in the tightly controlled Indian market. Pepsi, Seven-Up and Mirinda, an orange soda, hit the market in Jaipur, capital of the western state of Rajasthan, said Christopher Sinclair, president of Pepsi-Cola International. In the coming weeks, the drinks will be sold throughout the country, he said.

Mom couldn't get you to drink your milk, but Madonna might. At least that's what a big-time New Jersey dairyman and an outgoing Minnesota senator hope. They're trying to persuade the dairy industry to levy a tax on itself to finance a multimillion-dollar advertising war with the soft drink industry. Skeptics, such as Agriculture Secretary Clayton Yeutter, believe Americans already drink as much milk as they're going to.

Wal-Mart Stores Inc. told Coca-Cola Co. that it would double its purchases of Powerade if the sports drink is delivered to its stores through its own warehouses rather than through the bottler system, and that it could jump to a private label if Coke can't do what Wal-Mart requests, the world's largest soft-drink maker said in a court filing. Coke warns that a private-label competitor to Gatorade could deprive Powerade of any future growth opportunities in Wal-Mart stores.

GET READY for the next mass-tort crusade: protecting our kids from the ravages of Big Cola. According to news reports, a group of lawyers is gearing up to file lawsuits that will seek to blame Coke, Pepsi and others for obesity, tooth decay and other childhood health ailments. An article in the Boston Globe Magazine has called it part of a "national legal movement to make soft drinks the next tobacco." Instead of tar and nicotine, we'll be hearing about corn sweeteners and caffeine; maybe Dr.

Coca-Cola Co. slightly increased its lead over rival Pepsi-Cola Co. in 2002, thanks to the successful launch of Vanilla Coke and the growth of Diet Coke, according to U.S. soft drink industry rankings released Monday. Coke gained 0.6 percentage point in market share and increased its case volume by 2.1%, according to Beverage Digest/Maxwell, a New York-based industry newsletter and data service. The company captured a larger share of the market even though its Coke Classic brand fell 0.

Senate lawmakers Tuesday killed a bill that would have phased out the sale of soda in public schools to help improve nutrition among students. On a 6-1 vote, the bill, SB 1520 by Sen. Deborah Ortiz (D-Sacramento), failed to get the eight votes needed to clear the Senate Education Committee. Ortiz said she was disappointed that three of her Democratic counterparts on the committee chose not to vote on the measure, which had garnered strong opposition from the soda industry.

The nation's largest beverage makers are about to launch an all-out campaign to change your definition of water. In coming months, PepsiCo Inc., Snapple Beverage Group Inc. and other companies will roll out a barrage of lightly sweetened "waters" laced with fruit flavors, vitamins, herbs and even ingredients used to treat specific medical conditions.

PepsiCo Inc. got the green light Wednesday to buy Quaker Oats Co. and its top-selling Gatorade brand for about $14 billion after the Federal Trade Commission deadlocked over whether the new company would harm competition in the sports drink market. FTC commissioners voted 2 to 2 on going to court to block Pepsi's purchase, one vote short of the majority needed to file suit. A unanimous decision was then taken to close the investigation of the deal, an agency statement said.

Coca-Cola Co. slightly increased its lead over rival Pepsi-Cola Co. in 2002, thanks to the successful launch of Vanilla Coke and the growth of Diet Coke, according to U.S. soft drink industry rankings released Monday. Coke gained 0.6 percentage point in market share and increased its case volume by 2.1%, according to Beverage Digest/Maxwell, a New York-based industry newsletter and data service. The company captured a larger share of the market even though its Coke Classic brand fell 0.

People kept asking, "Hicks & Haas . . . who ?" Even Robert Haas' daughter wasn't quite sure what he did for a living. "But now the nice thing is that my kids know what I do," says Haas, 39. "All they have to do is open the refrigerator to see my portfolio." Ditto for the rest of America. Haas and partner Thomas Hicks popped onto the soft drink scene in March, 1985, with the purchase of a Dr Pepper bottling plant.

* Teck Corp. and its affiliate Cominco Ltd. said they planned to merge to create one of Canada's largest diversified mining companies and the world's biggest zinc miner. The combined market capitalization of the companies, based on their recent share prices, is more than $2 billion. The merged company, based in Vancouver, will be named Teck Cominco Ltd. Under the agreement, Cominco shareholders will receive 1.8 Class B subordinate voting shares of Teck, plus $3.

Gene La Pietra has surfed constantly changing beverage trends during 30 years of serving up drinks at bars and clubs in Hollywood. But few waves have been as dramatic as the arrival of energy drinks--nonalcoholic beverages loaded with caffeine, vitamins and other ingredients designed to provide a quick pick-me-up. The imported Red Bull energy drink is so hot that the club owner built a new bar at Circus Disco in Hollywood that sells only chilled 8.