Coca-Cola and Nestle are ending their partnership in the U.S. tea business to focus more on boosting their own brands.
Coke announced Friday that the decade-long venture between the two beverage giants -- Beverage Partners Worldwide -- will focus on selling the Nestea brand in Europe and Canada.
Coke said it will launch a new line of teas under its Fuze tea brand as well as add juices.
"The majority of growth in the refreshment space is coming from brands that offer dual tea and juice drink products and new Fuze tea and juice drinks are perfectly positioned to address this consumer trend and capture growth across both categories," said Brian Wynne, Coke's president and general manager of still beverages.
The change comes after U.S. sales of the Nestea line have struggled for a decade. According to Beverage Digest, the companies moved about 114 million cases of the brand in 2000. By 2005, that number dropped to about 93 million cases. In 2010, 78.1 million cases moved.
Rival Pepsi, however, moved 247 of its Lipton brand in the U.S. in 2010, Beverage Digest said.
Coke will also enter a licensing agreement to distribute Nestea in Taiwan and Hong Kong.
John Sicher, editor and publisher of Beverage Digest, said the two companies have seen their relationship change over the years as each has broadened its tea lines.
Coke has added Gold Peak tea and last year completed its acquisition of Honest Tea. Nestle also finalized its acquisition of last year of Sweet Leaf Tea, which included both the Sweet Leaf Tea line and Tradewinds teas and juice drinks.
Some in both companies have grumbled about Nestea's performance, Sicher said. Nestle sources maintain that the drink has solid brand awareness -- more than 90 percent -- while those at Coke have questioned whether it has competitive strength.
"Some in the Coke system have suggested that Nestea is not as strong a trademark for [ready to drink] tea as Lipton is and have looked to Coke for ‘another tea solution,"‘ Sicher wrote Friday.
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