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.


BLOG

"Buy a Mountain Dew and enjoy it"

No, this is not PepsiCo's new ad slogan for its Mountain Dew brand....

BLOG

Did Alibaba's 9.9 Global Wine and Spirits Festival flop?

Major wine players flocked to China ready for online giant Alibaba's 9.9 Global Wine and Spirits Festival, which took place on 9 September....

BLOG

Is Vietnam about to curb late-night drinking?

In May, Heineken's CEO, Jean-François van Boxmeer, called Vietnam the "poster child" for international beer thanks to strong demographics and growing demand....

BLOG

Heineken brings commercial know-how to new recruitment drive

Heineken is known for its flashy adverts. Now the brewer has given the star treatment to a new recruitment drive with a glamorous and highly-persuasive ad that, quite frankly, had the staff here at...

just-drinks homepage



Forgot your password?