Nestea Relaunch Could Invigorate Instant Tea Sales

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Nestea Relaunch Could Invigorate Instant Tea Sales

By Dan Bolton

Instant tea has suffered a long slide in sales which is why the US tea industry is paying close attention to former market leader Nestea, a brand dating to 1948 and known to 89% of US consumers.

In November Colorado-based New Age Beverages Corporation, an organic and natural products company in partnership with Nestlé, relaunched Nestea powders online.

A new formulation eliminated artificial colors and flavors, replaced high fructose corn syrup with stevia in its ready-to-drink (RTD) offerings and certified the product line as non-GMO. Sourcing tea leaves in the Nilgiri tea growing region in southern India signals a shift toward premiumization pioneered by Honest Tea, and more recently in natural versions of Snapple, AriZona, and Lipton.

In a release, New Age said that it intends to “leverage Nestea’s awareness and consumer loyalty, and make the brand available through its own direct-store-distribution system, its network of distributor partners throughout the US, and its footprint with major retailers throughout the country.”

Last summer New Age acquired New York-based Brands Within Reach, a sales and marketing agency that owned distribution rights to Nestea as well as Danone’s Evian water. New Age subsequently negotiated a partnership with Nestlé.

“We are thrilled to have the opportunity to manage the entire Nestea brand in the United States, and are committed to making it a sizable business for both Nestlé and New Age,” said New Age president for North America Olivier Sonnois, adding, “Nestea ready-to-drink and powdered teas have a large base of passionate, loyal consumers across the country.”

Rebranding as a natural product opens a previously closed retail channel where iced teas grew 12.4% through June, adding $5.6 million in sales during the past year, according to SPINS, a research firm focused on the natural channel.

But will that be enough?