Why there is Honest Tea discontinued? Coca-Cola announced the discontinuation of the organic tea brand. Coca-Cola confirmed that Honest Tea will be sold until the end of the year. Following that, customers can expect the bottles to vanish from store shelves.
Seth Goldman, the co-founder of Honest Tea, said that Coca-Cola had called him before the announcement. He declared that he had put a tremendous effort into building the brand, but so did thousands of people—employees, distributors, and, of course, all the devoted customers.
All flavors will be gone by the end of the year, and D.C. will be losing a beloved, homegrown product. Honest Tea was founded in 1998 by socially aware industrialist Seth Goldman and his former business professor Barry Nalebuff in Bethesda. “We have always been disparately committed to establishing our brand here,” Goldman says of Washington, D.C. Let us view the details of the Coca-Cola Honest Tea discontinuation.
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About Honest Tea
Honest Tea was established in 1998 by Goldman and Barry Nalebuff in Bethesda, Maryland. Coca-Cola purchased the brand in 2011. Goldman served as CEO of Honest Tea through 2015. He stayed closely involved with the brand through 2019. He then switched gears to launch Eat the Change, a new grocery chain he co-founded with chef Spike Mendelsohn.
Honest Tea co-founder Seth Goldman always sought the perfect drink to slake his thirst after a run. However, he found that most drinks were either too sweet or tasteless.
The seed was planted when he discovered that his Yale School of Management professor, Barry Nalebuff, also had a passion for a less sweet but full-flavored beverage. Three years later, Honest Tea was founded.
The tea leaves are not concentrated, processed, or pulverized. They are brewed and lightly loaded with sugar made from organic cane sugar. The drinks are available in various flavors, including peach, white Tea, black forest berry, and honey green tea.
Why was Honest Tea discontinued?
Coca-Cola announced that Honest Tea will be phased out by the end of 2022. This is because of sales trends and supply chain difficulties during the COVID-19 pandemic.
According to a statement, the discontinuation of Honest Tea means more focus and resources will be directed toward the two other Coca-Cola ready-to-drink teas: Gold Peak and Peace Tea. They have been unable to meet the demand for Gold Peak due to ongoing supply chain challenges. The ready-to-drink tea group director at Coca-Cola North America Operating Unit said, “Among other things, this influenced this hard choice.” Honest Tea products will be phased out, but Honest Kids products will continue to be produced and distributed.
Sales of Honest Tea decreased due to a drop in immediate consumption sales and limited glass supplies. Sales of Gold Peak and Peace Tea have risen during the pandemic. The brands attribute the increase in sales to shoppers’ preference for immune-boosting beverages and multi-serve packaged food options.
Gold Peak and Peace Tea are best positioned to satisfy customers’ preferences for high-quality brewed teas with varying levels of sweetness and flavor. Even though the teas are being phased out, Coca-Cola has stated that it will retain the Honest logo. Also, the brand may license other Honest items in the future.
The move is the latest example of Coca-Cola’s aggressive portfolio management strategy. The company announced in 2020 that it would cut its product line in half and reduce it to 200 items. Coca-Cola can invest more in its most popular products and get creative with promoting its core offering, Coke, by dropping underperforming brands.
Coca-Cola CEO James Quincey said, “In the end, it’s a struggle for space in the supermarket or convenience store.” The retailer wants to make as much money as possible for each spot on the shelf. Even if a brand is well-known but only sells a fraction of what these other bottles will, it will be phased out. The method is effective. According to the company, net revenues increased by 16% in the first quarter of this year.
Among other things, the logistical problems helped drive this quite tricky decision. With Honest gone, the company can focus on Gold Peak’s issues, which Coca-Cola hopes will appeal to some Honest Tea customers.
Honest Tea’s nearly 24-year run is coming to an end. Goldman says the company’s mission will live on in his next tea venture, Just Ice Tea. This is led by many of the same people who worked on Honest Tea.
Eat the Change decided to launch Just Ice Tea on June 6, two weeks after Coca-Cola announced the discontinuation of Honest Tea. The first bottle of Just Ice Tea was launched at a PLNT Burger in New York City. Goldman said ahead of the brand’s public opening on September 20. Many of the same people involved with Honest Tea are now engaged with this new brand. Eat the Change raised $14.5 million in three months to set up and scale output for Just Ice Tea.
Honest Tea competitors
Honest Tea’s competitive advantages include the fact that it provides a unique product that is difficult to find elsewhere. They offer a good product consistent with what is in the package and valuable to customers.
One of the factors that made the product unique was that we called it “Honest.” because it was brewed with natural Tea rather than syrup or concentrate. Starting with the product, they expanded it to marketing so that instead of promoting through more third-party channels, they tried to market directly to customers.
Diageo India, Yakult Indonesia, Calidad Pascual, and Focus Brands are among Honest Tea’s competitors. Honest Tea is a company that manufactures organic beverages in addition to bottled organic Tea.
The beverage industry in the United States is a highly competitive market. So having competitive strategies to stand out in the market is critical.
Just Ice Tea products will be available in flavors such as berry hibiscus herbal tea, honey green tea, Moroccan mint tea, original green Tea, peach oolong tea, and half-tea, half-lemonade. Sprouts Farmers Market will be the first nationwide retailer to carry the brand. But products will also be available at Whole Foods Markets, Hy-Vee, Town & Country, Giant Foods, and others.