Beverages: Dr Pepper eyes Deja Blue yonder

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Dr Pepper/Seven Up, eyeing a national rollout of regional Deja Blue bottled water, may find itself stymied-not by waterlogged consumers, but by a saturated distribution system.

With the two largest distribution systems tied up-PepsiCo with Aquafina and Coca-Cola Co. with Dasani-newcomers generally are limited to independent distributors who already have hundreds of regional waters. Out of the gate, Deja Blue could be forced to compete with Evian within its own bottling network. Evian's producer, Groupe Danone, reportedly is in distribution talks with Dr Pepper parent Cadbury Schweppes and Coca-Cola Co. Coca-Cola declined to comment; Danone couldn't be reached for comment at press time.

Bottled water has become the largest non-alcoholic beverage after carbonated soft drinks, posting volume growth last year of 31%. That's prompted Dr Pepper/Seven Up to consider making Deja Blue a national brand, according to an insider, although a Dr Pepper/Seven Up spokesman said no decision has been made.

Deja Blue, priced similarly to Dasani and Aquafina, is available in much of the West and Midwest. In 1999, Dr Pepper/Seven Up secured licensing arrangements for Deja Blue outside the bottler's territory.

The insider said no ad plans are imminent for the rollout of Deja Blue, which does not have an agency. WPP Group's Y&R Advertising, New York, is Dr Pepper/Seven Up's agency.

Breaking in may be tough. Five water companies account for 80% of the category's total volume: Perrier Group, followed by PepsiCo, Coca-Cola Co., Danone and CG Roxanne Co., according to Beverage Digest. Brand leader Aquafina sold about 146 million cases last year, with volume up 45%, while Dasani grew 95.5% to 127 million cases during the same period, according to Beverage Digest.

Evian has a 4% share of the water category, down five percentage points in 2001, according to Beverage Digest. It's believed that if Danone turned master licensing for Evian over to Coca-Cola, wholesalers would have more impetus to plug the high-end water.

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