UPDATE: Nestle, Coca-Cola Narrow Scope Of Drinks Partnership
06 Januar 2012 - 9:04PM
Dow Jones News
Nestle SA (NESN.VX) and Coca-Cola Co. (KO) are scaling back
their beverages joint venture, phasing out the partnership in such
markets as the U.S. and instead focusing efforts to sell
ready-to-drink tea in Europe and Canada.
In the U.S., Coca-Cola will launch a ready-to-drink tea brand
under its Fuze label to try to gain steam in a category that's
dominated by PepsiCo Inc. (PEP), which sells Lipton tea under a
joint venture with Unilever NV (UN).
The PepsiCo-Unilever partnership has proved to be more fruitful
than the Coca-Cola/Nestle licensing deal to sell Nestea in the
U.S., which is ending this year as part of the restructured
arrangement. Lipton's sales volume has grown under the partnership,
rising 5% to 247 million cases in 2010, according to Beverage
Digest, while Nestea has been in retreat for several years.
"Over the years, Nestle sources have expressed some unhappiness
that Lipton...has grown so strongly and Nestea has not," wrote John
Sicher, publisher of Beverage Digest, which first reported the new
terms of the partnership Friday.
The termination of the licensing deal will allow both Coca-Cola
and Nestle to pursue their own strategies on ready-to-drink tea in
the United States. Coca-Cola, which recently bought the organic
tea-maker Honest Tea and also has a brand called Gold Peak, will
roll out the Fuze teas this year, which will be a "fusion of tea
and fruit flavors" that will be fortified with B vitamins. Brian
Wynne, Coca-Cola's president of still beverages, said having a
product that dabbles in tea and juices will capitalize on a
favorable consumer trend.
"The majority of growth in the refreshment space is coming from
brands that offer dual tea and juice drink products," Wynne said in
an internal letter that was provided to Dow Jones.
Coca-Cola and Nestle have a relationship dating back to 1991,
and in 2001 created the joint venture. The relationship was
initially rocky, according to Beverage Digest's Sicher, as both
sides competed separately in the bottled-water category in many
markets.
As part of the new arrangement, Coca-Cola will license to sell
the Nestea brand in Taiwan and Hong Kong. In all other territories,
the joint venture will be phased out this year.
Analysts said the fresh focus of the partnership shows that
Nestle has enhanced its position in such key markets as China and
the U.S., where it is strong enough to spur the growth of its
iced-tea drinks itself. Nestle has recently increased efforts to
spur growth in emerging markets but has also launched measures to
enhance growth in Europe.
-By Goran Mijuk, Dow Jones Newswires; +41-43-443-80-47;
goran.mijuk@dowjones.com; and Paul Ziobro, 212-416-2194;
paul.ziobro@dowjones.com
Unilever NV (NYSE:UN)
Historical Stock Chart
Von Sep 2024 bis Okt 2024
Unilever NV (NYSE:UN)
Historical Stock Chart
Von Okt 2023 bis Okt 2024