Coke considers dairy route
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December 26, 2000: 6:02 p.m. ET
Coca-Cola to target kids in milk-drink market, report says
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NEW YORK (CNNfn) - Amid stagnating sales of carbonated beverages, Coca-Cola Co. is working on developing a line of milk-based beverages for children under 12, according to a published report.
The Wall Street Journal reported Tuesday that the plan, code-named "Project Mother," will test "five plus" milk-based drinks, hoping to tap into the $30 billion U.S. milk market.
According to Victoria Reid, who runs Coke's initiative aimed at children, any milk-based beverage would have to combine taste and nutrition, the paper said.
"For moms, milk is the golden standard of nutrition," Reid told the Journal. "For kids, we have to create something that's differentiating."
Kids spend about 30 to 40 percent of their annual per capita income, about $200 to $600 per year, on foods and beverages, the paper reported.
Shares of Coca-Cola (KO: Research, Estimates) rose $1.12 to $60 in New York Stock Exchange trade Tuesday.
Merrill Lynch analyst Douglas Lane, who first heard of the planned milk-based drinks at a Coca-Cola marketing meeting a few weeks ago, said the products would sit on regular store shelves and not require refrigeration.
"They are getting into dairy-based products, which is a new and up-and-coming segment," Lane said, adding that the company will be marketing "flavored milks."
Executives at Coke declined to comment on the Journal report Tuesday. Robert Baskin, a company spokesman, would say only that Coke has several "innovation and research projects" under way involving milk and other types of drinks.
Among the other projects Coke is working on are in-home water-purification systems, kiosks that would allow customers to use the Internet and personalized packaging.
"There are literally dozens of new projects going on worldwide," Baskin said.
Coke, the world's No. 1 soft-drink company, has been taking strategic steps to establish itself as a total beverage company.
In recent years, Coca-Cola Co. has branched out to include non-carbonated beverages such as its line of bottled water, Dasani, and a new line of energy drinks such as KMX.
-- from staff and wire reports
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