Mmmm. Coffee flavored Coke?

[alicia-w]

Coca-Cola Co., under pressure to respond to changing consumer tastes in the United States and other key markets, may introduce a coffee-flavored cola, a Wall Street beverage analyst said Tuesday.

The new drink, if it appears, could be called Blak, Morgan Stanley analyst Bill Pecoriello said in a research note.

Pecoriello was not immediately available to elaborate. Coca-Cola, the world's largest soft drink maker, would neither confirm nor deny speculation that the idea was under consideration.

"We're always developing and testing a wide range of beverage innovations," Coca-Cola spokesman Kelly Brooks said.

Coca-Cola would not be the first company to tinker with a java-laced cola. PepsiCo Inc. (down $0.19 to $53.57, Research), the company's main rival, tested Pepsi Kona in the 1990s but the drink did not catch on.

A lightly carbonated coffee drink called Mazagran, developed at about the same time through a joint venture between PepsiCo and coffee shop chain Starbucks Corp. (down $0.62 to $57.21, Research), also flopped.

"We think the timing may be better today for launching more coffee-based drinks, but it remains critically important to get the taste and marketing strategy right," said Pecoriello, who described coffee-based drinks as an "underdeveloped" part of the U.S. beverage market.

But Coca-Cola has been bitten before by the coffee bug, and not in a good way.

It stumbled several years ago when it acquired a bottled coffee brand called Planet Java, folding it into a joint venture with Swiss food giant Nestle. The drink floundered and was shelved.

Coca-Cola also has its hands full with the roll-out this year of a flurry of new drinks in its giant U.S. market. Among the new offerings are a lime-flavored version of its flagship Coca-Cola brand and an energy drink called Full Throttle.

Innovation is a key cornerstone of Coke's strategy to reignite sluggish soft drink sales in North America. The combined U.S.-Canadian market accounts for about 30 percent of its total revenues and is a gauge of its financial health.

Sales in the region, however, have suffered in recent years due to an economic slowdown, marketing miscues and mounting competition from PepsiCo and other rivals.

Coca-Cola's unit case volume growth, a key sales measure in the beverage industry, was flat in North America for the first nine months of 2004. Worldwide unit case sales are expected to grow an anemic 1 percent to 2 percent in 2004, far below the high-single-digit volume growth the company once generated.

Analysts say Coca-Cola will be hard pressed to reclaim its position as one of America's premier growth companies unless it can boost sales of its core Coke brand, which has trailed the performance of its bottled waters, juices and other drinks.

[sunny]

I'll pass!

[TexasStooge]

Same here.