• The Wall Street Journal (subscription required), Monday, January 29, 2007 11:45 AM

Grappling with sluggish sales of their core brands and eager to expand, some Coca-Cola Co. distributors are making deals with new companies that market small, faster-growing beverages.

Honest Tea, for example, has struck deals with Coke bottlers in California, Colorado and Pennsylvania to distribute its organic iced tea, which has been in Whole Foods Market outlets since 1998. But because Coke and PepsiCo Inc. maintain such a tight grip on distribution through their bottlers, it was hard for Honest Tea to get space on supermarket shelves and in convenience-store coolers.

The moves present a conundrum for the Atlanta-based company, which relies on its bottlers to push its new drinks into the market. Late to the noncarbonated beverage wars, Coke lags behind Pepsi in these drinks.

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