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Coca-Cola revamps RTD tea strategy

January 9, 2012
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The Coca-Cola Co., Atlanta, and Nestlé S.A., Vevey, Switzerland, have agreed to focus the geographic scope of their ready-to-drink (RTD) tea joint venture known as Beverage Partners Worldwide (BPW) on Europe and Canada. Both companies believe a concentrated focus on Europe and Canada will accelerate the venture’s growth and bolster the market presence of BPW where it is most effective.

The Coca-Cola Co. and Nestlé S.A. will be free to independently explore and maximize opportunities for growth in the RTD tea category in other markets. In Taiwan and Hong Kong, The Coca-Cola Co. will enter into a license agreement with Nestlé for the Nestea brand. In all other territories, the joint venture will be phased out in a transition to be completed by the end of this year, subject to any regulatory approval.

The current Nestea license granted by Nestlé to The Coca-Cola Co. in the United States will terminate at the end of this year. The Coca-Cola Co. is preparing to launch a new line of Fuze tea beverages in the United States before year’s end. The new Fuze line of teas will leverage the equity and positioning of the current Fuze brand, targeting the refreshment tea consumer with a proposition to accelerate the brand’s momentum in the tea segment, said Brian Wynne, president and general manager of still beverages for The Coca-Cola Co., in a note to U.S. associates and bottlers. The new Fuze tea products will feature a combination of tea and fruit flavors with the addition of B vitamins for a brand that is modern, youthful and vibrant, he added.

Additionally, The Coca-Cola Co. will launch a new line of juice drink products this year as an extension to the Fuze lineup.

“The majority of growth in the refreshment space is coming from brands that offer dual tea and juice drink products, and new Fuze tea and juice drinks are perfectly positioned to address this consumer trend and capture growth across both categories,” Wynne said.

The Coca-Cola Co. also offers RTD tea under Gold Peak and Honest Tea brands.

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