Euromonitor senior beverages analyst Hope Lee wrote in a company blog post Monday that despite Nestea’s global status, “it appears to be a neglected brand, lost in Nestle’s vast portfolio”.
The brand was withdrawn from China in May this year and was subject to a further US sales decline in 2013 – where it faces tough competition from Lipton and Arizona.
Although Nestle took back production and distribution from Coca-Cola this year, Lee warned that “when an FMCG brand does not shine in both the US and China, it is at risk of losing its important to its parent company”.
“From an overall soft drinks perspective, Nestle has no specific plan as to how to revitalise Nestea although its Nestea Zero variant appears to be doing well in Canada, its largest market,” she said.
‘We can compete aggressively against Coke and Pepsi’
However, at a June 4 investor seminar not previously reported, Nestle Waters USA boss Tim Brown (below) described tea as a form of flavored water and insisted: “Tea is our great opportunity in flavored water”.
“The first thing we’re going to do that Coke didn’t do is treat Nestea like tea,” he said. “Coke managed Nestea as a line extension of soft drinks. And if you look at the taste profiles, calories, etc., it really wasn’t much of a tea drink."
“We reformulated this year and took 40% of the calories out, and we have taste preference of 70:30 versus our closest competitor. We’ve also changed the packaging, graphics, and advertising,” Brown added.