Why Coke's a Buy

Success for a new beverage is all about persuading a distributor to make room for your stuff on its truck, and by all accounts, Collins' salespeople pulled every trick in the book to fight their way into the awesome sales routes of Coke, Budweiser and Miller beer. You can now choose from an entire shelf of Fuze at the tiny Korean deli in Seattle where I get my lunch every day, which is astonishing for an independent brand. Or you can buy cases of it at Wal-Mart Stores(WMT Quote) and in many supermarkets, not only in the U.S. but also in Asia, South America and Europe.

Cute little Fuze is the future of Coca-Cola because, well, everyone's doing it. Archrival PepsiCo(PEP Quote) started its own youth movement by buying the stunningly successful SoBe line of oddball tea and energy drinks for $370 million in 2000 and added the quirky independent Izze line of light juices, which my kids love, late last year. Coca-Cola bought natural-juice maker Odwalla in 2001 and picked up Fuze earlier this month.

Do you notice a pattern? Neither cola maker is buying any soda-pop companies, just these little wunderkinds, because that's where the growth in the industry is coming from. While carbonated soda's share of the market is shrinking, alternative beverage sales are jumping as much as 50% a year. And energy drink sales are advancing even faster.

Fuze has a line of energy drinks, called NOS, that is aimed at car-racing fanatics. It has reportedly been muscling up well against Red Bull, Monster and No Fear in Nascar towns, and now Coca-Cola will throttle up sales by pumping NOS -- which is short for nitrous oxide, an ingredient of racing fuel -- through its worldwide network. Zoom!