2.6.2008 9:00 AM

Coca-Cola Invests in Honest Tea

Organic Beverage Company Growing Fast

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By Annie Bell Muzaurieta

Coca-Cola invested $40 million in Honest Tea on Tuesday. USA Today reported that this pricey move is indicative of the trend in the beverage industry—nutritious, good-for-you, and non-carbonated liquids.

The deal gives Coke 40 percent of Honest Tea, with the option to buy the company outright in three years. In May, Coca-Cola bought Glaceau Vitaminwater for $4.1 billion.

The paper reports that despite its small size, Honest Tea is growing fast, and sales increased 70 percent in 2007 compared to 2006. The company's products highlight two trends: the beverages are low-calorie and organic.

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