Coca-Cola North America is trimming its tea tree. 

The unlucky branch? Well, that would be HONEST Tea, set to be phased out by the end of the year.

Coca-Cola wants to do what a lot of other food companies are doing, which is strategic streamlining. In a nutshell, it involves focusing on products with the greatest growth potential and sales, and the selling off or phasing out of lesser products.  It is a strategy that came out of necessity for many companies due to supply chain constraints and changing consumer habits brought on by prolonged lockdowns.

For Coca-Cola, that means paring down the selections of ready-to-drink (RTD) tea products from three to two. 

The company’s Gold Peak brand has been a billion-dollar brand since 2015 and continues to enjoy steady growth among “tea forward” drinkers, while Peace Tea takes a “fruit forward” approach that has gained it a loyal following among Gen Z.  Both have seen substantial growth over the last two years by consumers seeking an immune-boosting products to defend against COVID.

Two main problems face HONEST Tea. The first is its packaging. It lags with consumers, because, unlike the two other teas, it is single-serve only, while Gold Peak and Peace Tea appeal to consumers with their multi-serve packaging options, which are better suited for at-home consumption.  Second is that it comes in glass bottles, a commodity experiencing substantial supply problems.

And while HONEST Tea lags in sales, the other HONEST brand, HONEST Kids, is growing quickly and becoming quite successful. As a result, that portfolio will be retained.

“Shifting from a three-brand tea portfolio to a prioritized two-brand tea lineup will free up investment resources and supply chain capacity to better meet consumer needs and capture share in the category,” said Sabrina Tandon, group director, RTD Tea, Coca-Cola North America Operating Unit.