It’s a new year and a new look for ready-to-drink tea brand Steaz. The company, which operates as a part of Novamex-owned beverage portfolio subsidiary Nova Naturals, announced a rebrand this week that increases emphasis on the drink’s antioxidant content with a new design, formulation and new product launches, including a yerba mate line.
“If you look at the current branding and label, it’s very natural channel-esque,” said Ron Greene, CEO of Nova Naturals. “I mean, some of the most successful brands in natural have kind of busy labels, because that’s kind of how it is for old school natural brands. But we felt it was time to give the brand the premiumization it deserves.”
According to Greene, the company partnered with McLean Design on the new branding, starting the process in January 2020 with the goal of creating a cleaner, easier-to-read look that still stayed true to the brand’s legacy and identity. The new line is set to rollout to stores this month, with certain flavors to be sold exclusively at Whole Foods Market.
“We had to be careful because we have a following with such a loyal base that we couldn’t disrupt it,” he said. “So I think we did a good job. It was a hard thing to do. Probably one of the hardest things we’ve ever done.”
In addition to the new labeling, Nova Naturals cut 10 SKUs from the core Steaz line, leaving 20 full calorie and zero sugar flavors in place. The products were also reformulated to remove ingredients like inulin and erythritol and to ensure consistency across the line; Greene noted that caffeine content and nutrition could vary wildly from flavor to flavor. The revised products feature 65 mg of caffeine from green tea per can and include added acerola cherry to provide antioxidants.
The revised lineup includes two new flavors — Unsweetened Green Tea and Unsweetened Peach, as well as full calorie Peach, Blueberry Pomegranate, Mint and Superfruit flavors and Zero-Calorie Peach Mango, Raspberry, Half & Half and Goji Blackberry varieties. The zero calorie flavors are sweetened with organic stevia. The line retails for $1.89-$1.99 per unit.
In addition to the core line, Steaz is seeking to grow its presence in the functional beverage set with a new Yerba Mate line, also rolling out this month. The Yerba Mate line includes Golden Mate, Peach Please and Mint to Be flavors. Each drink contains 165 mg of caffeine and 14 grams of sugar per 16 oz. can and will retail for $2.79.
According to Greene, Steaz intends to compete head on with established yerba mate brands such as Guayaki by emphasizing lower sugar content and higher caffeine.
One goal of the yerba mate launch, Greene said, is to potentially expand Steaz out of the natural and specialty channel and into the mass market. Though the line will be a Whole Foods exclusive for the first six months, Nova Naturals will aim to use the slow rollout as a testing grounds to potentially prepare Steaz for a conventional channel expansion.
Greene said he believed the brand could benefit from a yerba mate drink, which blurs category distinctions between tea and energy. According to market research firm SPINS, doolar sales of RTD yerba mate products were up 21% year-over-year to $153 million, as of November 2020.
Though Steaz is currently growing double digits year over year, with a strong footprint on the East Coast, Greene said the brand only has a 15% ACV with a long runway to expand. A move into the mass market — if it were to happen — would not just be a big step forward for Steaz, but also for Nova Naturals as a portfolio company, which has traditionally stayed within the limits of the natural and specialty space.
“I really see the opportunity to scale this brand,” Greene said. “Because we could be comfortable where we are in the natural channel, keeping things online, but I really do think tea being a $4 billion category, and it’s such a phenomenal product, it just deserves that mass penetration.”
Beyond Steaz, Greene said Nova Naturals is aiming to surpass $100 million in net sales within the next five years. The division has a team of 24 employees that also oversee coconut water brand C2O and drinkable soup Tio Gazpacho.
In contrast to Steaz, C2O, he said, currently has a strong footprint on the West Coast, leaving opportunity open for the brand to expand further East. Tio Gazpacho, which was acquired by Novamex in 2018, recently completed a refresh but distribution is currently limited to three key markets — Los Angeles, San Francisco and New York City. Greene said that Nova Naturals is hoping to test and refine Tio’s place in the market as it works to establish the distribution infrastructure to expand the brand into additional regions.
“In my mind, as it relates to velocities, a win is doubling the business, doubling the velocity,” he said. “That’s audacious, but we’ve got the field execution team to do it. And you’ll start to see it, you’ll start to take notice.”