NEW YORK -- Soft drink companies contending with higher commodity prices and shrinking carbonated beverage sales are scrambling to find new ways to bring in revenue, said the Associated Press.
Last week, Coca-Cola Co. said it would team with Caribou Coffee Co. to launch a new line of ready-to-drink (RTD) iced coffees, the sixth new product launched this year by Coca-Cola North America in the coffee and tea and indulgent beverage categories.
It's about time, one industry analyst said. Carbonated soft drinks are a tight market that's [image-nocss] mature and not growing much, Morningstar Equity Analyst Matthew Reilly told AP. The game now is finding innovative products with decent margins that are going to grow.... Coke is really, really late to recognize the trend.
PepsiCo Inc., by contrast, has marketed Frappucino RTD beverages with Starbucks for years.
Both companies still face problems in the long term, as aluminum, high-fructose corn syrup and fuel prices rise, and consumers continue to shift away from carbonated soft drinks.
And smaller, scrappier soda makers such as Jones Soda Co. and Hansen Natural Corp. have managed to make inroads into the soft-drink market, AP said. The upstarts might make attractive acquisition targets for the bigger soda companies, Reilly said.
Jones Soda recently said it would introduce the first nationally distributed cane sugar soda as an alternative to high-fructose corn syrup sweetened drinks. In addition to costing more lately as corn prices soar, high-fructose corn syrup is perceived as a health risk by consumers. And some just don't like the taste.
Hansen has hit it big with its Monster energy drink. Hansen recently signed a distribution deal with Anheuser-Busch Cos. and Cadbury PLC has expressed interest in the company. Hansen has been growing like crazy, Reilly said. Monster hit a nerve.... Hansen is an attractive brand, and any brand that has that kind of strength is something [larger soft-drink makers] would be interested in.
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