- New Age Beverages Corp. is expanding its partnership with Nestlé and will again market and sell Nestea powdered tea products in the U.S. The relaunch is taking place through retail outlets and the company's e-commerce system, the company said in a release.
- In the past, Nestea powdered tea has generated retail sales of more than $30 million. The powdered and ready-to-drink varieties have brand awareness of 89%, New Age said in the release.
- New Age said it intends to capture a significant share of the powdered tea market in the U.S., which it said Nielsen valued at $259 million for the latest 52-week period. This will require leveraging brand awareness and distributing the products through stores, its distribution partner network and major retailers, the company said.
The Nestea brand came to New Age this summer with its acquisition of the New York-based Brands Within Reach sales and marketing agency, Food Business News reported. Along with that purchase came U.S. licensing and distribution rights for Nestlé's Volvic water brand, Danone's Evian premium water brand and The Coca-Cola Co.'s Illy RTD coffee brand, the publication said.
New Age is no doubt hoping to use the licensing opportunity to serve fans of powdered Nestea — and boost its financial picture and that of the brand's owner. Olivier Sonnois, president of the company's North America business, said in the release the company is "committed to making it a sizable business for both Nestlé and New Age." According to online consumer posts, the powdered mix seems to have been discontinued earlier this year. New Age representatives declined the opportunity to clarify this venture to Food Dive.
Besides reintroducing the most popular flavors, New Age said in the release the company also plans to expand the range of Nestea powdered products to new flavors and recipes. This might win back fans of the product who have been missing it ever since the products were discontinued — plus attract new ones.
In the interim, other powdered iced tea mixes such as Lipton and Tetley have moved into the space. These products could appeal to consumers looking for convenient and thirst-quenching drinks that can be quickly mixed with water at home. Tea also has a healthier profile these days, thanks to the popularity of Arizona Iced Tea, Honest Tea, Snapple Iced Tea and similar RTD beverages.
But is powdered Nestea a smart move? While there are committed fans on social media, the market on the whole is declining. According to Beverage Market Corp. statistics reported by World Tea News, just under 300 million of gallons of iced tea mix were sold in the U.S. last year — down 4% from a year before. Retail dollars from the segment had also fallen to $320.7 million, representing the lowest sales figures in the entire tea segment. The Tea Association of the U.S.A.'s annual report states the future of the segment is in innovating RTD tea through products such as kombucha, green tea and naturally flavored options. Tea mixes, the report says, will continue to struggle.
The enthusiasm for powdered tea may be reflected in New Age's stock. It spiked 31% Oct. 16 when the company tweeted that "big news" was coming from Nestea. The stock later dropped back to a net 12% gain by the time the market closed — after the company had tweeted the news about Nestea instant tea mix. By Monday morning, the company's stock had fallen 22% from Wednesday afternoon's high and was trading at close to the level it had been prior to the announcement.
Whether New Age will be able to successfully reintroduce Nestea powdered tea products in the U.S. and realize millions in new sales remains to be seen, but the company has name familiarity and brand loyalty on its side.
However, more interesting things could be coming to Nestea. New Age Beverages recently appointed Gregory Gould as chief financial and administrative officer. The company also announced in January that it would be developing and distributing CBD-infused beverages under its Marley brand. Gould is known for his expertise with exits, mergers and acquisitions, and getting into the high-demand CBD market could mean greater sales success for New Age — and potentially a unique niche for powdered Nestea.