Blog: Coca-Cola, Nestle announce the inevitable
Michelle Russell | 9 January 2012
The Coca-Cola Co and Nestle's announcement on Friday (6 January) that they are to scale back their global joint-venture, Beverage Partners Worldwide (BPW), may have come as little surprise to many.
Formed in 2001, the JV has struggled to push sales of its RTD iced tea brand Nestea. According to Beverage Digest, the companies sold around 114m cases of the brand globally in 2001. By 2005, that number had dropped to around 93m cases and by 2010 the companies only managed to move around 78.1m cases.
Rival PepsiCo, however, sold around 247m cases of its Lipton iced tea brand in the US in 2010, the publication noted.
In October last year, reports suggested that BPW was reviewing its India-wide roll-out of Nestea as a result of the business "failing to push the product", prompting speculation that the joint-venture was running out of fuel.
On Friday, a spokesperson for Coca-Cola told just-drinks that BPW's focus will now be solely on Europe and Canada.
"The BPW joint venture delivers greater value to both parent companies in markets throughout Europe and Canada and as such, we will continue to operate under this agreement in those markets," the spokesperson said. "In all other markets, we will have more flexibility to accelerate our investments where we see high-growth opportunities."
The new focus for the partnership may be a sign that Nestle has bolstered the position of Nestea in key markets such as China and US, and is now able to go it alone in those countries. Coca-Cola, on the other hand, will need to renew its focus in those countries.
Over the years, Coca-Cola and Nestle have each started to handle other tea brands besides Nestea in the US. Coca-Cola's products include Gold Peak iced tea and the Honest Tea line. The company is also reportedly looking at launching an RTD tea brand under its Fuze label, Beverage Digest has reported.
This may now be a new focus for Coca-Cola in the US, but the company will need to bear in mind that it will be going head-to-head with the RTD market leader PepsiCo and Nestle's Sweet Leaf Tea Co brands.
Could it happen? According to this report, a section of the beer community wants to ditch the word craft. They prefer instead the term “Indie” for brewers they believe follow the enlightened path of t...
The global elite were in Switzerland last week for the World Economic Forum in Davos, the annual corporate huddle for the rich and powerful. The CEO of The Coca-Cola Co, Muhtar Kent, was there too, de...
With The Coca-Cola Co stealing yesterday's limelight with its new united marketing strategy for brand Coke yesterday, a Forbes interview with PepsiCo North America Beverages' new CMO, Seth Kaufman, sl...
It is a bold attempt to regain a measure of control in the ever-spiraling debate about sugar. But will The Coca-Cola Co's new marketing strategy - which for the first time ties all of the Coke family ...
- Pernod Ricard 's first-half results - Preview
- Carlsberg's Q4 & full-year results - Preview
- Pernod Ricard's H1 performance by region - Focus
- Carlsberg's full-year performance by region
- Heineken's FY performance by region - Focus
- Asahi Group lines up Grolsch, Meantime, Peroni buy
- Diageo completes wine category exit in US
- Beam Suntory targets Kenya with Edrington/FIX
- SABMiller's Europe chief to join Britvic board
- Asahi Group to buy Grolsch, Peroni from SABMiller