Dive Brief:

  • New Age Beverages Corp. is increasing its partnership with Nestlé and can once more market and promote Nestea powdered tea merchandise in the U.S. The relaunch is going down by way of stores and the firm’s e-commerce system, the firm stated in a launch.
  • In the previous, Nestea powdered tea has generated retail gross sales of greater than $30 million. The powdered and ready-to-drink varieties have model consciousness of 89%, New Age stated in the launch.
  • New Age stated it intends to seize a major share of the powdered tea market in the U.S., which it stated Nielsen valued at $259 million for the newest 52-week interval. This would require leveraging model consciousness and distributing the merchandise by way of shops, its distribution accomplice community and main retailers, the firm stated.

Dive Insight:

The Nestea model got here to New Age this summer season with its acquisition of the New York-based Brands Within Reach gross sales and advertising and marketing company, Food Business News reported. Along with that buy got here U.S. licensing and distribution rights for Nestlé’s Volvic water model, Danone’s Evian premium water model and The Coca-Cola Co.’s Illy RTD espresso model, the publication stated.

New Age is little doubt hoping to make use of the licensing alternative to serve followers of powdered Nestea — and enhance its monetary image and that of the model’s proprietor. Olivier Sonnois, president of the firm’s North America enterprise, stated in the launch the firm is “committed to making it a sizable business for both Nestlé and New Age.” According to on-line shopper posts, the powdered combine appears to have been discontinued earlier this yr. New Age representatives declined the alternative to make clear this enterprise to Food Dive.

Besides reintroducing the hottest flavors, New Age stated in the launch the firm additionally plans to develop the vary of Nestea powdered merchandise to new flavors and recipes. This would possibly win again followers of the product who’ve been lacking it ever since the merchandise had been discontinued — plus appeal to new ones.

In the interim, different powdered iced tea mixes reminiscent of Lipton and Tetley have moved into the area. These merchandise might attraction to shoppers searching for handy and thirst-quenching drinks that may be shortly combined with water at dwelling. Tea additionally has a more healthy profile as of late, because of the reputation of Arizona Iced Tea, Honest Tea, Snapple Iced Tea and related RTD drinks.

But is powdered Nestea a wise transfer? While there are dedicated followers on social media, the market on the complete is declining. According to Beverage Market Corp. statistics reported by World Tea News, just below 300 million of gallons of iced tea combine had been offered in the U.S. final yr — down 4% from a yr earlier than. Retail {dollars} from the phase had additionally fallen to $320.7 million, representing the lowest gross sales figures in the complete tea phase. The Tea Association of the U.S.A.’s annual report states the way forward for the phase is in innovating RTD tea by way of merchandise like kombucha, inexperienced tea and naturally flavored choices. Tea mixes, the report says, will proceed to wrestle.

The enthusiasm for powdered tea could be mirrored in New Age’s inventory. It spiked 31% Oct. 16 when the firm tweeted that “big news” was coming from Nestea. The inventory later dropped again to a web 12% achieve by the time the market closed — after the firm had tweeted the information about Nestea instant tea combine. By Monday morning, the firm’s inventory had fallen 22% from Wednesday afternoon’s excessive and was buying and selling at near the stage it had been previous to the announcement.

Whether New Age will be capable of efficiently reintroduce Nestea powdered tea merchandise in the U.S. and notice hundreds of thousands in new gross sales stays to be seen, however the firm has identify familiarity and model loyalty on its aspect.

However, extra attention-grabbing issues might be coming to Nestea. New Age Beverages just lately appointed Gregory Gould as chief monetary and administrative officer. The firm additionally introduced in January that it might be growing and distributing CBD-infused drinks below its Marley model. Gould is understood for his experience with exits, mergers and acquisitions, and moving into the high-demand CBD market might imply larger gross sales success for New Age — and doubtlessly a singular area of interest for powdered Nestea.

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