The Alderis brewery in Latvia has opened a production line of Pepsi Cola International capable of bottling 20,000 bottles an hour.

Alderis president, Vitalijs Gavrilovs said the Pepsi project will create more jobs and he believes the new venture proves that Latvia is making rapid progress in economic development - the output volume of the entire system of drinks will be 30-35,000 litres of soft drinks an hour.

Alderis, the official distributor of Pepsi Co drinks, has exclusive rights to sell other Pepsi drinks, Miranda, Pepsi Max, 7 UP and Pepsi Cola in Latvia, Estonia and Lithuania and in the first half of this year the company netted 1.306 million lats on a net turnover of 10.327 million lats. This year the company plans to invest 6.9m latts into development.

Despite the confidence in cola the company is showing, international drinks in the market are not having it all their own way. Kvas, a traditional, yet almost forgotten, fermented soft drink is making a comeback and in some local markets is head to head with the colas.

Traditionally made from stale rye, sugar and yeast, with a shelf life of only 3 days, the new producer of this cloudy, fermented, brown drink, Gutta AS, has moved with the times. Supermarkets refuse to carry a soft drink with such a short shelf life, so instead of the traditional fermenting method, Gutta now uses a concentrate.

Available at one time in metal tanks and placed on street corners, the new brand is now being sold in plastic bottles. It appears that even though consumers are aware it is no longer the traditional Kvas, the new brand is the next best thing. Professor Barber, from Rutgers University in the US said: "We are seeing the return of local products but in a global form."

Canadean Ltd, a UK based beverage research company said the local market share of colas has dropped to 23% from 35% in Latvia, and in the same period, Kvas has increased its 4% share in 1998 to 32%, for the first half of this year.

Another survey by AC Nielsen Latvia says that across the Baltics Kvas and the colas are each claiming around 20% or the non-alcoholic beverage market with Kvas also making its way into the Russian soft drink market.