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Coke Eyes Expansion

Coca-Cola Co., the world's largest beverage company, may be preparing to acquire the Nantucket Nectars line of juice and tea products, Reuters reported.

The acquisition of Cambridge, Mass.-based Nantucket Nectars would help company compete with its archrival Purchase, N.Y.-based Pepsico Inc. in the fast-growing alternative drinks market. Pepsi has been active in the category over the past year with the acquisition of the Gatorade and South Beach Beverage Co. (SoBe) brands.

Coca-Cola has not sat by idly. The company this year acquired P.J. Bean Co., the maker of Planet Java coffee drinks, and Mad River Traders Inc., a small U.S. tea, juice and soft drink company.

A Coca-Cola spokesman declined to comment on speculation that the beverage giant was in talks with Nantucket Allserve Inc. and Ocean Spray Cranberries Inc., the joint owners of Nantucket Nectars, the report said.

Alternative drinks, which includes bottled waters, all-natural juices, and teas laced with ginseng and other herbs, is estimated to be worth about $5 billion annually, the report said.

Last year, Pepsico paid an estimated $370 million to scoop up a majority stake in SoBe and earlier this year completed the $13-billion acquisition of Gatorade's parent company Quaker Oats Co.

Analysts said Nantucket Nectars, which sells about 50 types of drinks in the United States, Canada and Great Britain, could help Coca-Cola gain much-needed traction in the non-carbonated beverage market.

"It would be a good fit in the sense that Coke is seen as being behind the trend on non-carbonated beverages and this would help them seem more on trend," John Faucher, an analyst with J.P. Morgan, told Reuters.
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