ATLANTA -- Coca-Cola Enterprises Inc. said it has completed a U.S. distribution agreement with Hornell Brewing Co. Inc., maker of AriZona Iced Tea products. Beginning in February 2007, CCE will begin distributing three flavors of a new 34-oz. package of AriZona Iced Tea to its U.S. retail customers: Iced Tea with Lemon, Green Tea with Ginseng & Honey and Sweet Tea.
In June, CCE began distribution of seven AriZona flavors in a variety of bottle and can packages throughout its territories in Canada.
AriZona is a major U.S. ready-to-drink ([image-nocss] RTD) tea brand, and it will significantly strengthen CCE's offerings in the category, especially in immediate consumption, the company said. AriZona joins CCE's tea portfolio, which now includes Nestea, Gold Peak and Enviga, a new calorie-burning sparkling tea from The Coca-Cola Co.
"We are combining the power of our sales and distribution system with the No. 1 ready-to-drink brand in the fast-growing tea category," said John F. Brock, president and CEO of Atlanta-based Coca-Cola Enterprises. "This provides substantial opportunities, now and in the future, to generate profitable growth for both of our companies."
CCE's move represents a rare snub of Coca-Cola, added a Wall Street Journal report, because Coca-Cola's products make up the bulk of the big bottler's lineup. But its tea brands are languishing in fourth place in terms of U.S. market share, according to the report.
We prefer to do business with the Coca-Cola Co.; however, to improve our top-line revenue growth, we're really going to look at the No. 1 or No. 2 brands, CCE spokesperson, John Downs told the newspaper.
Dan Schafer, a Coke spokesperson, expressed the beverage giant's disappointment with the CCE deal. Clearly, we would prefer that our bottlers distribute our brands, he told the Journal.
Coca-Cola has taken several steps in recent months to make itself more competitive in coffee and tea drinks, including introducing Gold Peak and Enviga and announcing plans earlier this month to restructure a joint venture that it has with Nestl a SA in a way that will free the Atlanta company to introduce more brands of its own, the report said.
We're confident in the strategy we've developed, and we expect to work with CCE and the other bottlers to fully implement it," said Schafer.
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