7/05/2007

Coke considers swallowing Snapple

As part of a push into tea drinks, Coca-Cola may be interested in deal for the iced tea maker owned by Cadbury.

GENEVA, Switzerland (Reuters) -- Coca-Cola Co. is evaluating whether to make a bid for Snapple, the iced tea division owned by Cadbury Schweppes Plc, as part of Coke's push into tea-based drinks, Coke Chief Executive E. Neville Isdell told Reuters.

"That is a valuation that we undertake - whether it (Snapple) is of interest to us or whether we can do it on our own," he said in an interview Wednesday.

Coke (Charts, Fortune 500) also aims to expand its palette of tea-based drinks using a revived pact with Nestle and recently met with officials from the Coke-Nestle joint venture, Beverage Partners Worldwide, to advance their plans, Isdell said.

"You're going to see more value-added products from the tea platform," he said.

New products with Nestle or a possible tea acquisition from Cadbury (Charts) would serve Coke by accelerating its efforts to expand its offering of healthy drinks, juices and waters.

Isdell rejected the notion that the market for carbonated soft drinks like Coke was in secular decline, and pointed to the quick rise in market share that followed the rollout of the group's new beverage, Coke Zero - billed as the company's most successful brand launch in 20 years.

When asked what Coke Zero would do to the group's published growth targets, Isdell said, "It will help it. I'm not going to give you a new prediction but it will help it."

Coke last said it expected long-term growth of 3 percent to 4 percent in volume and 6 percent to 8 percent in ongoing currency-neutral operating income.

Coke Zero had already grabbed market share of 3 to 5 percent for carbonated soft drinks in key markets such as France, Germany and Japan, Isdell said.

Snapple could be a real thing for Coke
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