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    Spicing Up Soda Sales

    As beverage giants Coke and Pepsi experience declines, specialty sodas are on the rise.

    Expensive specialty sodas remain a small sliver of the carbonated soft-drink market, but these brands are growing, according to a report by Dow Jones Newswires.

    Within the specialty-food industry, sales of sodas, teas and lemonades are growing faster than any other segment. Specialty soft-drink sales increased 39.1 percent from 2002 to 2004, said Ron Tanner, a spokesman for the National Association for the Specialty Food Trade, citing data from market researchers Mintel International and Spins Inc.

    The premium-priced pops often aim to please adults by touting natural ingredients, more exotic flavors or a light touch with sweeteners. By creating more wholesome images, some of the smaller brands have benefited from the growth of natural-food retailers such as Whole Foods Market Inc., which have embraced these brands. Others have capitalized on an image of exclusivity by being sold at upscale restaurants, small cafes and food chains such as Panera Bread Co. that are looking to jazz up their offerings.

    Although small, these companies are increasing sales at a time when Coca-Cola Co. and PepsiCo Inc. are seeing sales shrink, the report said. Those sales are down 3.6 percent in the first nine months of this year, according to Beverage Digest.

    For the most part, the larger soft-drink companies have been unwilling to experiment with offering premium versions of their carbonated soft drinks, leaving it to the smaller companies to test this market, the Dow Jones report said.


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