Spritz of vanilla gives Coke a lift to 44.3% share of U.S. market

February 25, 2003|By BLOOMBERG NEWS

NEW YORK - Coca-Cola Co., the world's largest beverage maker, gained share in the U.S. soft-drink market last year, its first increase since 1998, after the introduction of Vanilla Coke and a diet version helped boost slowing cola sales.

Coca-Cola's share increased 0.6 percentage points to 44.3 percent of the $62.9 billion soft-drink market, according to a joint study by Beverage Digest and analyst John Maxwell, who also is a contributing editor for the newsletter. PepsiCo Inc., the world's second-biggest soda maker, slipped 0.2 points.

Volume sales, or the amount of drinks shipped, for Atlanta-based Coca-Cola rose 2.1 percent. Coke's market share had declined from 1999 to 2001 after the company struggled to develop advertising and new brands to jump-start demand. PepsiCo's introduction of berry-flavor Pepsi Blue failed to spark sales as did past brands, including cherry Mountain Dew Code Red.

"Vanilla Coke was a huge success," said John Sicher, editor of Beverage Digest in Bedford Hills, N.Y. "With it, Coke showed the power of innovation of last year, just as Pepsi did in 2001."

Mountain Dew Red and lemon-lime Sierra Mist helped PepsiCo increase its market share 0.2 percentage points in 2001.

Shares of Coca-Cola, which also makes Minute Maid juices, fell 82 cents to close at $39.82 yesterday on the New York Stock Exchange. PepsiCo, based in Purchase, N.Y., declined 57 cents to $38.83.

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