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Demand for beverages bubbles up on U.S. heat wave

NEW YORK, Aug 3 (Reuters) - Soaring U.S. temperatures have been a boon for beverage companies that are seeing unprecedented demand for some of their specialty, more expensive, drinks -- especially bottled waters and sports drinks.

East Coast cities dimmed lights at landmarks, opened cooling centers and extended swimming pool hours this week to combat a deadly heat wave that sent temperature indexes climbing toward 115 F (46 C) -- making July one of the hottest months on record.

"Bottled water and sports drinks will disproportionately benefit from this protracted heat spell," said John Sicher, editor of newsletter Beverage Digest. "Last year there were capacity problems for some water and sports drinks ... and this summer given the heat even though there's greater capacity, it could still be an issue."

Sicher said PepsiCo Inc.'s (PEP.N: Quote, Profile, Research) Gatorade and Coca-Cola Co.'s (KO.N: Quote, Profile, Research) PowerAde had capacity issues last year.

Beverage companies, however, said they have sufficient supplies to meet the surge in demand.

"We had some near misses in 2005," said Cookie Rice, president of Coke bottler Ozarks Coca-Cola. "But this year the company began building inventory in the cold weather and so we haven't experienced any difficulty in obtaining PowerAde. Out-of-stock (items) are costly to both us and our customers."

Ken Sadowsky, president of Atlas Distributing, a Massachusetts-based distributor for Miller and Corona beer, Snapple drinks and Glaceau vitaminwater, said the heat wave has been a boon for business.

"The hot weather is making up for the bad, rainy spring that we had and it is having a positive impact on certain categories," he said.
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