Honest Tea Is Reborn in India

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Honest Tea, the popular ready-to-drink brand shut down by Coca-Cola in 2022, will come back to life in Asia in a collaboration between Coca Cola India and Luxmi Tea Company, owners of Makaibari Tea Estate.

Available in two flavors, Lemon-Tulsi and Mango, the tea will sell in 16.9-ounce bottles for Rs 50 ($0.60). The brand will be sold exclusively online, with distribution limited to Bangalore, Mumbai, Hyderabad, Chennai, and Pune. 

Makaibari will supply the organic green tea used in the product. Estate owner Rudra Chatterjee, managing director of Kolkata-based Luxmi Group, said, “There is no greater tea estate in Darjeeling than Makaibari; it is the last word among teas, whether in Japan or England’s royal houses.”

Honest Tea, founded in 1998 by Seth Goldman and Barry Nalebuff, was an American beverage success story until its demise. Coca-Cola invested $43 million in the brand in 2008, at a time when the soft drinks giant owned only a few bottled teas among its portfolio of 200 beverages. Three years later, the Honest Tea founders sold their remaining shares, and Goldman joined Coca-Cola.

By 2018, Honest Tea was available at 140,000 retail outlets in the United States, from neighborhood grocers to big box stores. Honest tea was the top selling RTD tea in more than 15,000 natural food stores at its peak distribution. The line was extended to include sports drinks and flavored teas. Honest Kids low-sugar juice boxes and lemonade were sold at McDonald’s.

Sales topped $500 million in 2018. Analysts predicted that the lightly sweetened bottled tea would generate $1 billion in sales by 2025. They were wrong. Sales stalled during the pandemic, and in May 2022, Coca-Cola announced it would no longer manufacture and distribute the brand in North America.

The U.S. market for RTD tea is the world's largest by value. Currently estimated at $37.1 billion, it will increase 6% annually to 2027, according to Statista market research. That is fast growth from 2018, when sales were $6.2 billion.

In contrast, the total market value of India’s ready-to-drink segment in 2018 was estimated at just $39 million. But the category started to grow rapidly thereafter, reaching $148.6 million in 2023, The compound annual rate of growth for sales of RTD tea in India is forecast at 11.2% annually through 2027, according to Statista.

Comparing the two markets in volume terms, the RTD tea consumed per person in India is estimated at just 0.11 liters per year, far below the 18.9 liters consumed per capita in the U.S. in 2023. There is plenty of room to level up.

A spokesman for Coca-Cola said the launch will offer Indian customers wider range of beverage options in a convenient format.