Coca-Cola will stop producing tea under its Honest Tea brand, in a new move that seeks to better manage its product portfolio.
The international soft drink company confirmed that the release of these products will be gradual throughout the year and added that it will maintain the children’s line, known as Honest Kids.
Through a statement, The Coca-Cola Company added that, although they will no longer produce the tea line, the Honest Tea brand will remain in its license portfolio, which leaves open the possibility for them to launch new products in the future.
“(The decision) will release investment resources and supply chain capacity to better meet consumer needs,” said Sabrina Tandon, Group Director, Ready-to-Drink Tea, Coca-Cola North America Operating Unit.
Coca-Cola bought the 40% of Honest’s shares in 2008 and in 2011 made an offer to acquire the company entirely.
New adjustments to Coca-Cola’s strategy
The news about the departure of the Honest Tea brand is the brand’s most recent move to maintain control of its products.
The brand has also implemented other types of strategies to reduce its costs, such as the use of refillable glass bottles, given the high production costs.
In addition, from 2020, The Coca-Cola Company announced that would reduce its portfolio of products in half, to leave it in 200 options for consumers.
The strategy consisted of investing in the most successful products in order to allocate more resources to the marketing of its main offer.
“At the end, it is a Darwinian fight for space in the supermarket or in the convenience store, ”said the CEO of Coca-Cola, James Quincey, in an interview with CNN Business.
And to Unlike what happens with other transnational brands, Coca-Cola’s strategy has given results, according to brand data it has had an increase net of 16% in its income at the end of the first quarter of the year.
The news was not well received by either Honest Tea fans or the brand’s co-founder, Seth Goldman, who called the decision a visceral one.
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