Coca-Cola Adds to Its Lead Over Pepsi in Hot New Category

Editors' pick: Originally published March 8.

Coca-Cola (KO) continues to be more aggressive than its nemesis PepsiCo (PEP) in chasing the red-hot, low-calorie sparkling water business.

On Tuesday, Coca-Cola announced it will leverage the Minute Maid juice brand and launch a new range of sparkling beverages. Called Minute Maid Sparkling, bottles of flavored fizz in the line will boast 30-40 calories depending on the flavor. The four initial flavors include: mixed berry, fizzy lemonade, fruit punch and tropical citrus. The products will start arriving on retail shelves later this month. 

The Minute Maid Sparkling line will add to Coke's portfolio of low-calorie sparkling water beverages, which include various flavors under the Dasani brand that launched nationally back in 2014. The sparkling water market has become increasingly important to beverage manufacturers as consumers seek out healthier alternatives to regular and diet sodas.

According to Beverage Digest, sparkling water volumes surged 28.6% in 2015, led by demand for new flavored options from Schweppes, Perrier, Poland Spring and Coca-Cola's Dasani. In the latest data available, market research firm Euromonitor pegs the size of the sparkling water market in the U.S. at over $4 billion, with volumes surging 56.4% from 2009 to 2014. 

But the sparkling water market is missing a greater push by one major player right now: PepsiCo.

Currently, PepsiCo bottles sparkling water from Dr. Pepper Snapple's (DPS) Schweppes brand. In June last year, PepsiCo released Izze Sparkling Water nationwide. The product has fewer calories than the new Minute Maid offering (10 vs. 30 to 40 calories) and is the only USDA organic-certified sparkling water product on the market.  

And PepsiCo may soon be in the market with more sparkling waters in order to cash in on the craze, likely under its Aquafina water brand.  

"We have been in the sparkling water business in the past, and we do bottle a lot of Schweppes sparkling water, so we like the category and we like bubbles generally speaking, especially ones with low sugar attached", PepsiCo vice chairman and CFO High Johnston told TheStreet in a Feb. 11 interview.   

Added Johnston, "I would expect us to continue to experiment not just with sparkling water, but with lots of low calorie offerings that have bubbles."

 

If you liked this article you might like

Why Coca-Cola's CEO Is Bullish on the Company's Future

Why Coca-Cola's CEO Is Bullish on the Company's Future

Warren Buffett's Annual Letter Reveals a $116 Billion Problem

Warren Buffett's Annual Letter Reveals a $116 Billion Problem

Coca-Cola CEO: Warren Buffett Has Had a Profound Career

Coca-Cola CEO: Warren Buffett Has Had a Profound Career

What Coke's CEO Has Learned From His Most Important Shareholder, Warren Buffett

What Coke's CEO Has Learned From His Most Important Shareholder, Warren Buffett

Watch Jolt: Snapchat's Stock Gets Shredded While GE's CFO Sorta Shines

Watch Jolt: Snapchat's Stock Gets Shredded While GE's CFO Sorta Shines