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Pepsi Blue is coming
PepsiCo unveils blue cola a week before rival Coke launches vanilla soft drink.
May 7, 2002: 2:38 PM EDT

NEW YORK (CNN/Money) - The cola wars are bubbling up again and they're turning PepsiCo blue.

Yes, that's right. Blue cola.

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PepsiCo (PEP: down $0.04 to $51.96, Research, Estimates), the second-largest soft-drink maker, unveiled its newest product Tuesday, a blue-hued, berry-flavored cola to be available commercially in August in 20-ounce bottles. The Purchase, N.Y.-based maker of Pepsi, Mountain Dew, Slice, Mug root beer, Frito Lay snacks and other products announced its latest offering one week before its larger rival, Coca-Cola Co. (KO: down $0.23 to $56.36, Research, Estimates), officially launches a vanilla-flavored soft drink.

Pepsi Blue was one of more than 100 concepts Pepsi tested. Two-thirds of teen-agers the company asked said they would buy it regularly, the company said.

"Pepsi Blue has the potential to reinvigorate the cola category," said Gary Rodkin, CEO of PepsiCo North America.

Though Coke has been No. 1 in soft drinks for decades, analysts have pointed to Pepsi's strong growth in recent years that has helped it gain ground on its larger rival.

Dave Burwick, Pepsi's senior marketing vice president, said in a statement that the company had been considering a "cola fusion" for months, and that the majority of teenagers polled said they would like to see a berry-flavored cola with a blue color.

Since it is aimed at a youth market, Pepsi plans to sample the cola at teen-oriented places and advertise it on the Internet and through outdoor postings.

Separately, Coca-Cola said Tuesday it has agreed with British beverage maker Diageo PLC (DGE: Research, Estimates) and French distiller Pernod Ricard (PERP: Research, Estimates) to acquire the Seagram's mixers business, adding to its line of carbonated drinks

Terms were not disclosed.

Coke said it signed a worldwide long-term license agreement with Pernod Ricard that will add Seagram's ginger ale, tonic, club soda and seltzer drinks to its beverage portfolio.  Top of page

-- from staff and wire reports