PepsiCo signs Ocean Spray drinks deal
single-serve cranberry juice drinks, as the soft drinks firm looks
to expand its offering to health-conscious consumers.
Dawn Hudson, chief executive of Pepsi-Cola North America, said the long-term strategic alliance with Ocean Spray would create a major healthy drinks business based on cranberries.
The announcement comes only a day after the firm reported a 23 per cent growth in non-carbonated beverage volumes for its second quarter of 2006. Sports drink Gatorade, juice brand Tropicana and bottled waters Aquafina and Propel drove growth.
The deal with Ocean Spray should help PepsiCo further develop its portfolio of non-carbonated drinks for increasingly health-conscious consumers.
"This is a chance for both PepsiCo and Ocean Spray to turn up the dialogue on the health benefits of cranberries," said Hudson. Several studies have linked cranberries to urinary tract health.
Both Hudson and Ocean Spray chief executive Randy Papadellis hinted the two firms would also look at using dried cranberries in other products, possibly snacks and cereals, as well as drinks.
A small US study recently found Ocean Spray's Craisins, sweetened, dried cranberries, could also ward off urinary tract infections in women.
Pepsi's Hudson said the group would look at developing new products across multiple trade channels.
PepsiCo's expansion out of drinks and its early embrace of consumer health trends have given the group a new lease of life in the last couple of years, helping it to overtake Coca-Cola in market value for the first time in 112 years of rivalry.
Ocean Spray is a co-operative of more than 650 cranberry growers in the US, supplying 60 per cent of North American cranberries. The firm reported sales of $1.4bn in 2005, after strong rises in the last five years.
Pepsi will begin bottling Ocean Spray's single-serve juices in 2007.