PepsiCo Inc., the world's No. 2 soft-drink maker, will sell a new lemon-lime flavored soft drink by year-end to compete with Coca-Cola Co.'s fast-growing Sprite.
PepsiCo will introduce the soda by the fourth quarter, said company spokesman Larry Jabbonsky. PepsiCo will end sales of its two current lemon-lime sodas, Slice and Storm, and it may name the new drink Sierra Mist, he said. The new carbonated beverage won't contain caffeine.
Chairman Roger Enrico has geared PepsiCo's soft-drink strategy to focus on the U.S., where the company's market share closely trails Coca-Cola's. Enrico restored the "Pepsi Challenge" promotion to ask consumers to compare Pepsi brands to Coke's, and he spun off bottling operations and bought juice-maker Tropicana to mimic Coca-Cola's corporate structure.
The new lemon-lime soft drink will be sold in about 60 percent of the U.S., said Bedford Hills, New York-based trade newsletter Beverage Digest, which earlier reported the new product. PepsiCo's bottlers in the other 40 percent of the country will continue to sell Cadbury Schweppes Plc's 7 UP lemon-lime soda.
Sprite is the top-selling lemon-lime drink, and the No. 5 soft drink in the country, with 6.8 percent of the U.S. market last year, according to Beverage Digest. Its share grew 0.2 percentage points from 1998 to 1999, making it the second-fastest-growing U.S. soft drink in the period.
7 UP was the No. 8 drink in the U.S. in 1999, with 2.1 percent of the market.
Coca-Cola's brands had 44 percent of the U.S. soft-drink market in 1999, while PepsiCo's had 31 percent, according to Beverage Digest.
Calls to Coca-Cola seeking comment weren't immediately returned.
Shares of Purchase, New York-based PepsiCo rose 1/4 to 44 in early afternoon trading.