Canadian Vending

Features Coffee Service
Coke, Nestle Revisit Partnership


April 30, 2008
By Canadian Vending Staff

Topics

Coca-Cola Co. and Nestle SA are reported to be in talks to restructure
the partnership that distributes Nestea ice teas, which have been
losing market share, according to Beverage Digest.

Coca-Cola Co. and Nestle SA are reported to be in talks to restructure the partnership that distributes Nestea ice teas, which have been losing market share, according to Beverage Digest.

Multiple industry sources told the industry journal that Coke and Nestle are discussing the future of Beverage Partners Worldwide, which markets Nestea iced teas and coffees worldwide.

“As part of our ongoing relationship, we are continuously in discussions with Nestle to look for ways to enhance our partnership and maximize growth opportunities within these important beverage categories,” said Crystal Walker, a Coke spokeswoman.

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Ready-to-drink teas and coffees account for less than five percent of Coke’s total global volume.

Nestea ranks fourth in the iced tea category, which is led by privately-held Arizona Beverage Co.’s Arizona Ice Tea.

Under the current partnership terms, Coke faces restrictions in introducing coffee and tea products outside of the venture. The company is making moves to broaden its noncarbonated product offerings.

In North America, Coke is working with Campbell Soup Co. to bring Godiva Belgian Blends to market this summer, but the launch has been complicated by Coke’s inability to call the product a coffee.

Coke will be restaging the Nestea brand this summer with four new products, including green teas. The Coke-Nestle partnership also will launch Gold Peak, a premium tea, Coke spokesman Ray Crockett said.

Coke has been unable to create a coffee brand to compete with Starbucks Frappucino and Starbucks DoubleShot, which dominate the category. The Starbucks drinks are marketed by the North American Coffee Partnership, a venture of Starbucks Coffee Co., of Seattle, and PepsiCo Inc., of Purchase, New York.

Coca-Cola did recently launch Blak, a mixture of its signature soda and coffee. But frustrated by a lack of beverage options in the bottled coffee category, some Coke bottlers have begun exploring ways to enter the segment on their own. Coca-Cola Bottling Co. Consolidated, of Charlotte, North Carolina, has formed a new unit, ByB Brands Inc., to market drinks such as Cinnabon coffee in North America.