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Cola Wars' New Battleground

The shift in American consumer tastes away from carbonated soft drinks is not a big concern for Cadbury Schweppes plc because the company has already bolstered its lineup of non-carbonated teas and juices.

Known in the United States for its Dr Pepper and 7 Up soft drinks, London-based Cadbury has beefed up its lineup with drinks such as Hawaiian Punch and Snapple in recent years.

Last year, 45 percent of the company's North American beverage sales came from non-carbonated drinks, up from just 19 percent in 1996, CFO David Kappler said in an interview with Reuters.

He also said the company was open to looking at other brands for future acquisitions. "Acquisitions have been an inherent part of our strategy now for some time," Kappler added.

Unlike Coca-Cola Co. and PepsiCo Inc., the top two soft drink companies, Cadbury has not had to worry about weakness in the cola market. "We don't really play in the cola category," he said, noting that the company's RC Cola brand makes up a tiny 1 percent of an overall market dominated by Coca-Cola.

Coke and Pepsi have also been adding non-carbonated drinks to their portfolios.

As for Cadbury's carbonated drinks, Dr Pepper volume slipped as Coke and Pepsi bottlers, responsible for 70 percent to 80 percent of the brand's distribution, lost some focus on the drink "with all of the activity that Coke and Pepsi have been undertaking," Kappler said. In addition, 7 Up is seeing increased competition from Pepsi's Sierra Mist and continues to feel the heat from Coca-Cola's Sprite.
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