Coca-Cola Discontinuing One Of Its Most Popular Beverages
In a move that aligns with its new business strategy, Coca-Cola has decided to discontinue its popular Honest Tea brand.
Making good on the aggressive business model that was outlined back in 2020, Coca-Cola is eliminating yet another brand from its beverage line-up. CNN reported that the popular iced-tea brand Honest Tea is the latest casualty in Coca-Cola’s product elimination strategy. The news that Honest Tea is now going the way of the Dodo bird comes after the beverage giant discontinued a trio of other under-performing brands including fan-beloved Tab soda.
Coca-Cola revealed the fate of Honest Tea in an official statement. “The Honest teas product line will be phased out of The Coca-Cola Company’s beverage portfolio at the end of 2022,” read Coca-Cola’s announcement. Even though Coke made the decision to slash Honest Tea from production, the brand itself isn’t completely being shed from the company. Coca-Cola announced its intent to hold onto the Honest Tea IP. In fact, the beverage behemoth noted that Honest Kids, which is a brand specifically targeted toward tots, is doing well and that it would continue to be produced.
Coke’s decision regarding the ultimate fate of the Honest Tea IP aligns with the company’s overall strategy: keep what’s doing well and let go of what isn’t. In an interview with CNN in 2021 Coca-Cola CEO James Quincy said that “In the end, it’s a Darwinian struggle for space in the supermarket or in the convenience store.” Thus, the company wants to fill whatever space it can with products that are performing well. Essentially Coke wants to fill its supermarket real estate space with products that best suit its bottom line. It’s a strategy that not only makes sense but it’s one that is really working for the beverage behemoth thus far. As many companies are beginning to field lower revenue margins due to soaring inflation, Coca-Cola saw its profits grow by about 16%.
Moreover, by cutting the dead weight and removing brands like Honest Tea, Coca-Cola can better allocate its resources. Sabrina Tandon, who heads up one of Coca-Cola’s North American cells, said that it’s the company’s intent to hone in on bolstering the two other brands of iced tea that they own – Gold Peak and Peace Tea. Tandon detailed that the demand for those brands is much higher at present, specifically for Gold Peak. She explained that because intense pandemic-induced supply chain challenges are still percolating, Honest Tea was actually hindering the amount of product it could produce across all of its tea brands. Removing Honest Tea will allow Coca-Cola to redirect those limited resources to make more of the products that consumers are asking for.
Unfortunately, not everyone is happy about Coca-Cola’s decision to phase out most of the Honest Tea brand. The company’s original founder lamented the loss on Twitter and alluded to all the hard work he put into cultivating the brand. Perhaps the one silver lining is the fact that Coca-Cola is not totally dropping the Honest Tea brand. Hence, the fact that Coke is holding on to it means that there is a chance that Honest Tea could be resurrected at some point in the future.
