Maker of Dr Pepper moves into milk drinks

PLANO, Texas -- After a century of selling soda, the makers of Dr Pepper and 7 Up are trying a new tack in reaching young adults: milk.

The company has announced that beginning in March, it will sell milk in flavors such as chocolate caramel and pina colada.

Company officials began developing flavored milk about 18 months ago and tested different recipes in focus groups. They hope to repeat the success of new soda flavors in the staid milk business.

"What we heard from consumers is that the milk category today is pretty boring," said Andrew Springate, director of brand marketing for Plano-based Dr Pepper/Seven Up Inc.

The soda makers began tinkering -- with mixed results.

"We tried some flavors like apple cinnamon and things that were way far out, but people tend to gravitate close to chocolate," Springate said.

They settled on five flavors, from berry to chocolate, and named the new drink Raging Cow. It will be marketed to 18- to 24-year-olds at concerts, on college campuses and the Internet. It will be sold in the dairy section of stores and in vending machines, officials said.

Made in Missouri

The drinks, bottled by Jasper Products of Joplin, Mo., will be sold in 14-ounce plastic containers and carry a suggested retail price of $1.49. Sold cold, the drinks can be stored at room temperature for 180 days, the company said.

The company said it plans to introduce the drinks in Texas and the Midwest in March and roll them out across the country by mid- to late-2004.

The main competition, Springate said, figures to be Hershey's -- sold under license by Dallas-based Dean Foods Co. -- and Nestle. But industry analysts said the field is growing more crowded because other beverage companies are raiding the dairy section.

"The dairy business is still very much untapped by the major beverage companies, but as big beverage companies seek areas for growth, dairy will be one of those areas," said John Sicher, editor and publisher of Beverage Digest, an industry trade publication.

Sicher said beverage companies such as The Coca-Cola Co. and PepsiCo Inc. are much more skilled at packaging and marketing than the dairy companies that introduced chocolate- and strawberry-flavored milk to grocery shelves years ago.

Last year, Coca-Cola introduced Nestle's Choglit and Planet Java drinks with coffee and milk, and PepsiCo sells Frappuccino coffee and milk drinks in a joint venture with Starbucks.

This month, Dean Foods said it was nearing regulatory approval to sell Folgers Jakada iced coffees and nonrefrigerated Hershey's flavored milk and shakes using technology imported from Europe.

One of the oldest chocolate drinks still on the market is Yoo-hoo, which dates to the 1920s and is owned by the Snapple Beverage Group. Snapple and Dr Pepper/Seven Up are both owned by UK-based candy and beverage giant Cadbury Schweppes plc.

Sicher said the highest start-up cost for new drinks is usually marketing. Dr Pepper/Seven Up declined to say how much they'll spend promoting Raging Cow, but Springate said, "We'll be competitive."