THE NEW COKE GENERATION; AFTER YEARS OF LAGGING SALES, COCA-COLA CO.'S JUICE, SPORTS AND TEA DRINKS ARE STARTING TO QUENCH THE BEVERAGE MARKET.

Byline: Chris Roush Bloomberg News

Coca-Cola Co.'s sales of juice, sports and tea drinks are surging - after struggling for a few years - as the world's largest beverage company tweaks its packaging, advertising and flavors.

Its Nestea teas are No. 2 in that category behind rival PepsiCo Inc.'s Lipton. Sports drink Powerade is a distant second to Quaker Oats Co.'s Gatorade, and its juice drinks such as Fruitopia are No. 4 in a category led by Triarc Co.'s Snapple and Mistic brands.

That's a unique position for Coca-Cola, which has the top-selling cola and diet cola. The Atlanta-based company introduced the beverages five years ago as competitor drinks began to eat into sales of its carbonated beverages. Until recently, though, the company couldn't hit on the right combination of marketing, tastes and packaging to attract larger numbers of drinkers.

``We never said we would be market leaders overnight,'' said Frank Bifulco, Coca-Cola's domestic vice president of marketing. ``Our goal is to drive growth and to capture a good part of that growth. We're in it for the long haul.''

For example, Coca-Cola revived its struggling Fruitopia line by expanding distribution to places such as schools and changing its bottling. Sales jumped 35 percent in the first quarter, and Fruitopia outsold Snapple in convenience stores in May for the first time ever.

Coca-Cola claims it's the largest domestic marketer in the $20 billion noncarbonated beverages market, even though it's not No. 1 in any category. Still, such drinks represent a fraction of Coca-Cola's 15 billion cases sold last year. Sales of noncarbonated beverages by all companies totaled 1.2 billion cases in 1997.

Coca-Cola is gaining big chunks of U.S. market share as a result of its changes - and rivals are losing share.

In the first quarter, its Nestea line gained 3 percentage points in market share in the U.S. to 26.7 percent, while Lipton lost 3.2 percentage points and dropped to a 40 percent share, according to industry publication Beverage Digest.

In sports drinks, Powerade gained 1.3 percentage points to an 11.5 percent market share in the first quarter, while Gatorade lost six-tenths of a percentage point to 78.4 percent.

Coca-Cola's juice drinks, primarily sold under the Fruitopia name, increased their market share by 1.7 percentage points to 7 percent. At the same time, Triarc's drinks lost 3.5 percentage points to 14.5 percent.

Nestea and Powerade's growth is much stronger than from previous years, while Fruitopia actually saw sales decline in 1996 after dropping flavors.

``You can't ignore the growth from these drinks, because it could add a half a point to Coke's overall volume growth,'' said PaineWebber analyst Emanuel Goldman. ``And these drinks enhance bottler profitability.''

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PHOTO (Color) no caption (Fruitopia, Powerade and Cool Nestea bottle s)