Globally conventional freeze-, vacuum-, and spray-dried instant teas are experiencing strong growth throughout Asia and in developing countries.
Not so in the US where momentum has shifted to premium brands like small-batch Cusa Tea, an organic instant that sells 10 single-serve packets for $10. Its vegan-friendly, gluten-free, paleo, keto certifications speak to millennials. Premium packaging and “convenience without compromise” in fresh brewed taste models the success of Starbucks Via, an instant coffee that revived a then-flagging segment.
Nestea, tasked with regaining market share lost to Lipton and Tetley, generated $30 million in sales within the powdered tea category which grossed $259 million from mass-market outlets in the past 52-weeks, according to Nielsen market research. New Age will have to introduce something more profitable than premium tea powder – a CBD hemp tea in bottles might do it.
RTD dominates the retail tea segment according to Beverage Marketing Corp. which estimates RTD holds a 47.3% share of the US tea market. Tea bags account for 42.9% market share. Powdered and ice tea mixes account for 8.2%. The entire tea category (all formats) represents 5.6% of the US beverage market, according to BMC.
Nestea modernized its label, switched to sculpted 23-oz PET bottles and greatly improved the quality of tea the year before Coca-Cola ended its 16-year US joint venture with Nestlé in January 2017 due to lagging sales. The depletion of inventory that followed led to complaints from loyal customers.
Top-ranked competitor Lipton Pure Leaf accelerated past AriZona ($565 million) to capture $723 million in annual sales by 2019. Gold Peak rose to third with $400 million in sales as Lipton Brisk fell to $365 million, according to IRI, which compiles a list of top 20 brands that at one time regularly included Nestea in the top tier.
Nestea has a long trail to travel but innovation clearly marks the path for a storied brand worth saving.
Learn more: www.nestea.com