‘One-punch…’ Seth Goldman salutes ‘beloved’ brand’s legacy as Coca-Cola drops HONEST Tea portfolio, but says HONEST Kids will stay
In a announcement that Seth Goldman (who founded HONEST Tea with Barry Nalebuff in 1998) said he felt like a “punch“, Coca Cola said that “mainstream” brands such as Gold Peak and Peace Tea were driving the growth of the RTD tea category and will now be the “anchor” of the tea business. RTD of Coca-Cola in North America.
“Gold Peak Sales and Peace Tea have surged during the COVID-19 pandemic as shoppers shift to both immune-boosting beverages and multi-serve packaging options for at-home consumption,” said Coca-Cola, which bought a 40% stake in HONEST in 2008 before fully acquiring the brand in 2011.
“HONEST teas, which are primarily offered in single-use bottles with a heavy concentration in the North East and along the West Coast, have been negatively impacted by lower immediate consumption sales and limited glass supplies..
“Ongoing supply chain challenges mean we must prioritize the production and distribution of certain product SKUs, and we have been unable to meet consumer demand for Gold Peak. That, among other factors, contributed to this very difficult decision.”
“We are phasing out the HONEST line of teas, but not selling the HONEST brand”
The Coca-Cola System will continue to produce and distribute the HONEST Kids range and explore licensing projects and innovation opportunities for the HONEST brand in other categories, said Sabrina Tandon, Group Director, RTD Tea , Coca-Cola North America Operating Unit: “We are phasing out the HONEST line of teas, but are not selling the HONEST brand.
Coca-Cola has steadily streamlined its portfolio in recent years, bidding farewell to Odwalla juice, Zico coconut water, TaB soda and Coca-Cola Life (a low-calorie cola sweetened with cane sugar and stevia), among others.
Seth Goldman: ‘I believe HONEST Tea and what it stands for was about the future’
Seth Goldman – who retired from the brand’s day-to-day operations at the end of 2015 after becoming executive chairman of Beyond Meat – told FoodNavigator-USA that “the pandemic has changed the dynamics of the [beverage] Business,” with Coca-Cola making a pragmatic decision in the face of supply chain challenges: “HONEST Kids trumps the tea industry, so that’s where they put their efforts and that’s their prerogative.”
That said, today’s news was quite depressing, he said.
“I think the Venturing and Emerging Brands effort [Coca-Cola’s attempt to identify longer-term consumer opportunities and build a model that could that nurture and support them], which started in 2008 with Honest Tea [described by Coca-Cola in 2017 as “one of the top success stories at VEB”] started at a time when they were expansive and looking to new horizons. I think this stage today is where they are less expansive and, obviously, less daring.”
“The brand arrived and ended with its integrity intact”
When asked if the market has changed in recent years such that HONEST Tea has lost relevance, or if Gold Peak is now capturing the same consumer, he replied: “I believe HONEST Tea and what it represents was a forward thinking about the future, a thinking about where the world is going, about transparency, about the health of the planet, about the health of the consumer.”
While Gold Peak has a premium positioning, he said, “I definitely felt there was enough space between them [Gold Peak vs HONEST Tea, which is organic and Fairtrade] in terms of sweetness profile, ingredients, sourcing.”
On the other hand, he says, he appreciated that under Coca-Cola, “there was never any attempt to compromise what the brand stood for. I’d rather they just discontinue the brand than say we’re going to cut out the organic or add a ton of sugar, or drop the Fairtrade piece. So, you know, the mark came and went with its integrity intact.”
From five thermoses and an empty Snapple bottle to over a billion bottles sold’
In a related articleshared with the media, he added that the news came as a “punch to all the sweat, tears and incredible passion that went into building our beloved brand,” adding that he was at least “somewhat comforted that HONEST Kids will continue to grow and thrive.
”My heart goes out to our long-time partners and friends, organic and fair trade farmers who have helped grow their communities and protect their ecosystems with the tens of millions of pounds of tea, sugar and spices they give us. have sold.
“I’m grateful to the hundreds of amazing people who helped Barry Nalebuff and I take that idea of five thermoses and an empty Snapple bottle to over a billion bottles sold. Thank you to all the retailers, restaurateurs and distributors who believed in us. Your partnership has helped democratize organic and healthier beverages in a way that has never been done before.
Euromonitor: “It’s not completely surprising”
Howard Telford, head of soft drinks at Euromonitor International, noted that Coca-Cola had “talked about being more ruthless with underperforming niche brands/SKUs and there seems to be a need for more efficiency in sourcing ingredients and packaging materials amid supply pressures constants.”
He told FoodNavigator-USA: “Given the higher price of organic products and the difficult trading environment in general in terms of prices, this is not entirely surprising, although the year was not exceptional for the category either. wider range of ready-to-drink teas. it seems that Peace Tea has eclipsed Honest as the number two brand after Gold Peak.”
“HONEST Tea was caught in the middle in terms of category segmentation”
honest children “seems to have developed and maintained a niche as a better option for you in mass juice drinks for kids,” added Telford, “while HONEST Tea was perhaps caught in the middle in terms of category segmentation.”
More recently, he speculated, HONEST Tea may have found itself “competing with Coke’s Gold Peak or PepsiCo’s Pure Leaf as the most natural option in the conventional chains, but also with a much wider variety of more premium independent options and more functional teas (gut health, energy) in natural/specialty channels today,” which he says was “not the case when Coke first acquired its stake in 2008.”