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Sports drink heads Coca-Cola sales rise

By Chris Mercer , 20-Oct-2005

Sports drinks, juice and bottled water spearheaded a set of encouraging third quarter results from Coca-Cola as health-conscious consumers force a realignment at the major soft drinks players.

The Powerade sports drink was the star performer of Coca-Cola's third quarter 2005, increasing sales by 28 per cent and helping the group to a resurgent eight per cent sales rise for the first nine months of the year.

The global Powerade surge, largely recorded in the US, was accompanied by a 14 per cent sales rise for juice brand Minute Maid and a 37 per cent rise in global volumes for water brand Dasani.

The results, helped along by a spate of good weather, almost mirror those of Coca-Cola's arch-rival PepsiCo only a few weeks ago.

Pepsi recorded strong double-digit growth for its own sports drink, Gatorade, while also notching up gains with its resurgent Tropicana juice brand, and fitness water range Propel.

Together, the latest Pepsi and Coke results provide some of the strongest evidence yet of the sizeable consumer shift underway in the soft drinks market towards health.

Coca-Cola's Powerade, like Pepsi's Gatorade, is aimed at all vaguely energetic types and, the group says, "quenches thirst and replaces minerals and carbohydrates during sports and other intense activities".

Sales of energy drinks have already begun to take off elsewhere. In the UK alone, they are expected to pass the £1bn barrier this year, according to research from Mintel.

Again, like Pepsi, flavour innovation has been important to Powerade's success. The drink comes in almost 30 different flavours in all and Coca-Cola said it had increased its share of the global sports drinks categories, as well as juices.

The group's regular fizzy drinks continued to hit problems in the US and volumes dipped one per cent in the third quarter "reflecting soft category trends". Diet and 'light' carbonates were flat, though the firm said it had gained some market share.

Coca-Cola's strong double-digit growth in key emerging markets, such as China, Russia, Turkey and South Africa, did actually help the firm's regular fizzy sodas to a two per cent volume rise overall.

Yet, even this may be short-lived in some areas. A recent report by Euromonitor said that juice and water would show the most dynamic growth in Russia over the next five years.

Coca-Cola's success in emerging markets offset a disappointing performance in Western Europe where poor fizzy drink sales sent volumes down three per cent. The group said it expected this to continue for the rest of 2005.

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