Coca-Cola is discontinuing Honest Tea.
The beverage manufacturer announced earlier this week that its Honest Tea product line will be phased out of Coca-Cola’s beverage portfolio at the end of 2022. The company, however, will continue to produce and distribute the “quickly growing” Honest Kids line of organic juice drinks.
Though Coca-Cola is phasing out its Honest Tea product line, the company is not selling the Honest brand, as it will explore licensing ventures and innovation opportunities for the brand in other product categories.
Why is Honest Tea being discontinued?
Coca-Cola decided to discontinue Honest Tea to focus more on its Gold Peak and Peace Tea brands.
“Shifting from a three-brand tea portfolio to a prioritized two-brand tea lineup will free up investment resources and supply chain capacity to better meet consumer needs and capture share in the category,” Sabrina Tandon, group director of ready-to-drink tea for the Coca-Cola North America operating unit, said in a statement. “We believe Gold Peak and Peace Tea are best positioned to meet consumer preferences for high-quality brewed teas with different levels of sweetness and flavor.”
According to Coca-Cola, sales of Gold Peak and Peace Tea have increased since the onset of the pandemic, as shoppers prefer beverages with health properties and multi-serve packaging options for at-home consumption. On the other hand, sales of Honest Tea ― whose products are primarily being offered in single-serve bottles ― were negatively impacted by declining immediate consumption sales and limited glass supplies during the pandemic.
Tandon pointed out that Coca-Cola has been “unable to meet consumer demand for Gold Peak” due to supply chain issues. With Honest Tea products gone, the company can better address the logistical challenges being faced with Gold Peak, which the manufacturer hopes will eventually attract some Honest Tea customers.
What is Honest Tea?
Honest Tea is a brand of ready-to-drink teas that are USDA Organic, use Fair Trade certified ingredients, and range from unsweetened to “Just a Tad Sweet” tasting varieties.
Based in Bethesda, Maryland, the Honest Tea brand was founded in 1998 by Seth Goldman and Barry Nalebuff, and started as a separate company from Coca-Cola. The beverage giant purchased a 40% stake of Honest Tea at $43 million in 2008 and then bought the rest of the company in 2011.
How did Seth Goldman react to the news?
In a LinkedIn post on Monday, Goldman called Coca-Cola’s decision to discontinue Honest Tea a “gut punch to all the sweat, tears and incredible passion that went into building our beloved brand.”
“My thoughts are with our longtime partners and friends, the organic and fair-trade farmers who helped develop their communities and protect their ecosystems with the tens of millions of pounds of tea, sugar, and spice they sold us,” wrote Goldman, before thanking all the consumers who bought their drinks as well as the retailers, restaurants, and distributors that believed in the brand since its inception. “Your partnership helped democratize organic and healthier drinks in a way that had never been done before.”