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Extra11/22/2006 12:12 PM ET

Pepsi gets Naked

The soft-drink giant looks beyond bubbles to acquire Naked Juice, a line of refreshments that appeal to consumers looking for good-for-you products. Pepsi hopes the deal will help it better compete with Coke's Odwalla juices.

Pepsi seems to be going on a health kick.

The three latest drinks in its arsenal have names such as Orange Mango Motion, Berry Blast and Pomegranate Blueberry.

None has bubbles or preservatives, all are laden with nutrients, and all three are products of Naked Juice, which will now join the PepsiCo (PEP, news, msgs) empire.

The world's No. 2 beverage company announced Tuesday that it is buying Naked Juice from North Castle Partners, a private-equity firm in Greenwich, Conn., whose portfolio includes Avalon Organics, Red Door Spas other well-known consumer-product and service brands. Naked makes 25 drinks and has annual sales of more than $150 million.

Along with its purchases of Stacy's Pita Chips and IZZE Beverage, the Naked purchase is Pepsi's third deal this year to appeal to consumers focused on healthier diets. Pepsi did not disclose terms of this week's deal.

Pepsi's other products include Gatorade and Tropicana drinks, Lay's and Doritos snacks, and Quaker Oats. The company hopes its purchase of Naked will counter market moves by No. 1 beverage seller Coca-Cola (KO, news, msgs), which produces nutrient-bolstered Odwalla juices.

Pepsi has seen stronger demand for its noncarbonated beverages, which have helped sales rise an average of 5% for the past few years. Coca-Cola, which depends on soda for 80% of its sales, has seen sales increase an average of 3% over the same period.

By Elizabeth Strott

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