The paper says that Pepsi, Purchase N.Y., has developed a flavored milk drink that it may begin testing in stores next year. It has already run trials in school vending machines.

"It's in keeping with our plan to offer more 'better for you' choices," said Dave DeCecco, a spokesman for PepsiCo, which also owns Texas-based snack food maker Frito-Lay Inc.

PepsiCo's Quaker Milk Chillers and rival Coca-Cola Co.'s competing product give the soft-drink companies a chance to tap into consumers' growing concern about health and nutrition. Both have taken hits for offering up sugary drinks to an overweight nation, and both have responded with more reduced-sugar offerings.

Quaker Milk Chillers are made with 52% low-fat milk and come in chocolate, vanilla and strawberry.

PepsiCo began testing the product in school vending machines in five markets at the start of the school year, DeCecco said. The company hopes to implement a retail test sometime next year, he said.

PepsiCo trails Atlanta-based Coke, which launched its Swerve milk drink in middle and high schools a year ago. But unlike Pepsi, Coke has no plans to market the drink to the general public, according to spokesman Ray Crockett. More than a year ago, Texas-based Cadbury-Schwepps has offered up its own Raging Cow.