Coca-Cola, the world's largest soft drinks company, is to manage the North American marketing, distribution and sales of Evian mineral water, under a deal clinched recently with Danone of France.

The terms of the deal were not disclosed, but it will place the lagging Evian in a far more competitive position and Coke gains a premium priced water brand.

Evian accounted for 22 per cent of Danone's $780 million (€862 million) US water sales last year.

The US bottled water market is set to outpace all other food and beverage sector markets as customers spurn carbonated soft drinks in its favour, growing up to 20 per cent over the next five years, according to analysts' estimates.

John Sicher, editor of Beverage Digest, said: "Evian is a great brand, but it was broken in the US. Coke can fix it, and I believe it will."

The North American bottled water market grew more than 30 per cent last year, with Coke, Pepsi and Nestle holding the top three positions, according to Beverage Digest. Danone North America, which lost market share in the continent last year, was in fourth place.

Coke's own Dasani bottled water, which is a mid-priced purified water, grew 60 per cent in the first quarter. But with the premium Evian brand it is now engaging in a two-tiered strategy for bottled water, which gives it greater flexibility.

Coke has been battling for market share with Pepsi's Aquafina brand of bottled water and Nestle's Perrier.

Danone had also been in talks with Cadbury Schweppes about taking on Evian, but Coke's marketing clout and the fact that Coke bottlers already distributed over 50 per cent of Evian in the North American market made Coca-Cola a natural choice for the French group.