Coca-Cola to phase out Honest Tea production

Fatima Fokina

ATLANTA — The Coca-Cola Co. is phasing out its Honest Tea product line at the end of the year. Going forward, the national Gold Peak and regional Peace Tea brands will anchor Coca-Cola’s ready-to-drink tea strategy in North America.

“Shifting from a three-brand tea portfolio to a prioritized two-brand tea lineup will free up investment resources and supply chain capacity to better meet consumer needs and capture share in the category,” said Sabrina Tandon, group director of ready-to-drink tea for the Coca-Cola North America operating unit. “We believe Gold Peak and Peace Tea are best positioned to meet consumer preferences for high-quality brewed teas with different levels of sweetness and flavor.”

Coca-Cola said it will continue to produce and distribute the Honest Kids line of organic juice drinks. Additionally, the company will explore licensing ventures and innovation opportunities for the Honest brand in other categories, indicating it is “phasing out the Honest teas product line, but… not selling the Honest brand.”

Gold Peak debuted in 2006 and became a billion-dollar brand within nine years. Coca-Cola acquired Peace Tea as part of its Monster Beverage transaction in 2015. Sales of both brands have increased during the pandemic, according to Coca-Cola, as shoppers seek beverages with health properties and multi-serve packaging options for at-home consumption. Honest Teas primarily are offered in single-serve bottles, and its sales were negatively impacted by declining immediate consumption sales and limited glass supplies.

“Ongoing supply chain challenges mean we are having to prioritize production and distribution of certain product SKUs, and that we’ve been unable to meet consumer demand for Gold Peak,” Ms. Tandon said. “This, among other factors, helped drive this very difficult decision.”

She added the company sees “endless runway with Gold Peak and are excited to expand the trademark with new product and packaging innovations that will appeal to the Honest Tea consumer.”

Seth Goldman and Barry Nalebuff founded the Honest brand in 1998. Coca-Cola took a 40% investment stake in 2008 and fully acquired the business in 2011. The brand’s bottled teas are made with organic and fair-trade ingredients.

In a LinkedIn post on May 23, Mr. Goldman called Coca-Cola’s decision a “gut punch to all the sweat, tears and incredible passion that went into building our beloved brand.”

“My thoughts are with our longtime partners and friends, the organic and fair trade farmers who helped develop their communities and protect their ecosystems with the tens of millions of pounds of tea, sugar, and spice they sold us,” he wrote.

He expressed gratitude for the “tens of millions of consumers who bought our drinks and who benefited from having a less sweet, less caloric, authentic drink as part of their diet” and thanked the “retailers, restaurants, and distributors who believed in us. Your partnership helped democratize organic and healthier drinks in a way that had never been done before.

“I am somewhat consoled by the fact that Honest Kids will continue to grow and thrive. It has helped remove billions of empty calories from the American diet. I hope that work will continue to scale.”

https://www.foodbusinessnews.net/articles/21418-coca-cola-to-phase-out-honest-tea-production

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