Coca-Cola Expands FUZE as Nestea Exit Nears

ATLANTA, Ga.

Coca-Cola expanded its FUZE beverage line this week in anticipation of the dissolution of its long-standing distribution agreement with Nestea.

Last January Nestle and Coca-Cola announced the breakup once it became apparent they had become rivals in the tea segment. In 2011 Nestle Waters North America purchased Sweet Leaf organic tea which followed Coke’s acquisition of Honest Tea making them direct rivals and spelling the end of their 20-year Beverage Partners Worldwide partnership.

Coke is now moving quickly to replace Nestea with FUZE in vending, foodservice, fast-food fountains and grocery and convenience stores.

The FUZE launch includes five tea and juice flavors.

  • Lemon Iced Tea
  • Honey and Ginseng Green Tea
  • Half Iced Tea & Half Lemonade
  • Berry Punch Juice Drink
  • Strawberry Lemonade Juice Drink

"Our fans expect vibrant tastes from FUZE and we are excited to add five new flavors to the FUZE family," said Chris Johnston, tea director at Coca-Cola North America. "We expect our new teas and juice drinks will both refresh people and accelerate our momentum in this growth segment."

FUZE beverages offer consumers a source of vitamins B6 and B12, available in all FUZE products except Honey & Ginseng Green Tea. They are currently available in one-liter packages priced at 99 cents at convenience stores and grocers.

Additional FUZE offerings will debut throughout the remainder of 2012, the company said.

Nestea will move to the Nestle Waters North America portfolio.

“We think Nestea will be a good fit,” Jane Lazgin, NWNA’s director of corporate communications to BevNet. “We’re putting a great deal of priority on our emerging tea business. We think it’s a great fit with our distribution system, our marketing programs and we’re looking forward to building our tea business. In the whole healthy hydration segment it will be a really nice complement.”

Nestea’s performance over the past few years indicates that the move may have been seen as a necessity by Nestle, the parent company of NWNA. The move has likely been coming for a while — Beverage Digest reported that Nestea’s own case sales had declined by 25 million from 2000 to 2011, according to BevNet.

Coca-Cola is the world’s largest beverage company. Its tea brands include Gold Peak sweet tea and Sokenbicha, an unsweetened somewhat bitter-tasting Japanese blended tea. Coke also distributes Peace Tea for Monster Beverage Co.

Source: Coca-Cola, BevNet

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