Why Coke's a Buy

Long Odds, Big Payoff

The new corporate Coca-Cola, you see, is not really that into soda at all. While sugar water will always be at the core of the company's mission, the way forward is all about high-concept juices in groovy bottles, as well as vitamin water, energy potions and chilled coffee.

Consider Coca-Cola's most recent $250 million purchase, a small "alternative" beverage pioneer called Fuze. If you've never heard of it, you're probably not a 28-year-old woman. In years past, this was exactly the kind of concept drink the soda giant shunned. Now it's considered a potential lifesaver.

Fuze was invented four years ago in the New Jersey basement of industry veteran Lance Collins. It's an awesome story of stubborn entrepreneurship. Collins knew the odds were around 97-1 against success, but he thought he saw a niche for low-calorie, high-taste, upscale juices for beautiful people, and he gave it a shot.

His design team created a gorgeous, colorful glass bottle for his "banana colada" and "peach mango" concoctions, gave them such coy names as Slenderize, Refresh and Vitalize, called them "infuzions" instead of juices, and listed "transformative" ingredients such as chromium, carnitine and Citrimax.

This doesn't sound like Coca-Cola's cup of tea, but check out the demographic. Collins started small by focusing on urban women in their 20s and 30s, then elbowed his way past the big boys of the game via an aggressive distribution strategy into one chain store after another. He sold 24 million bottles in 2003, double that in 2004 and double again last year.