April 2, 2008, Austin, Texas-Sweet Leaf Tea, one of the nation’s fastest-growing makers of ready-to-drink iced teas, announced today that it has completed its largest round of funding to date from Catterton Partners, the nation’s leading private equity firm in the consumer sector. An early investor in companies including Build-a-Bear, PF Chang’s China Bistro, Odwalla and Kettle Foods, Catterton Partners has committed $18 million of growth capital to Sweet Leaf Tea.
The investment will be used by Sweet Leaf Tea to increase its marketing efforts and expand its national distribution, which already includes natural stores like Whole Foods and grocery chains like Kroger and Safeway.
“The ready-to-drink tea category is a $2.8 billion industry with the premium segment growing at an annual rate of 25%,” said Michael Farello, partner, Catterton Partners, who will join Sweet Leaf Tea’s board of directors. “Our assessment shows that Sweet Leaf Tea has the greatest potential for growth of any company in the category. This investment will give Sweet Leaf Tea the resources it needs to achieve an entirely new level of national awareness and sales.”
And rapid growth it is. Since its founding ten years ago, sales of Sweet Leaf Tea have nearly doubled every year for the past five years. Christopher attributes much of that growth to the fact that Sweet Leaf Tea enjoys success with both natural and mass market consumers.
“Unlike other ready-to-drink teas that do well in one channel or the other, Sweet Leaf Tea is thriving in both the natural and mass grocery channels,“ says Christopher. “Our focus on simple, all-natural goodness has positioned us perfectly to leverage the movement of ‘all-natural’ from trend to mainstream buying behavior.”
Underscoring the company’s success further, Christopher was named Ernst & Young’s 2006 Entrepreneur of the Year for Central Texas.
Says Farello, “Sweet Leaf Tea is well positioned for a major breakthrough.”
Industry reports appear to support that view, forecasting that sales of ready-to-drink teas will top $4.4 billion in 2011.
The Catterton Partners investment is not the only thing brewing at Sweet Leaf Tea to ensure the company taps into that market potential. The company has doubled its headcount within the last eight months to support its growth, also announcing today the addition of 20 new sales, marketing and operations executives. Many of these new hires have come to Sweet Leaf Tea from senior posts at ready-to-drink beverage companies including Jones Soda Co., Odwalla and Vitamin Water.
“This is a very exciting time in our company’s history and we are delighted to have the opportunity now to make our award-winning products available to more people, in more places, more often,” said Christopher.
About Sweet Leaf Tea
Sweet Leaf Tea is one of the fastest-growing beverage companies in the United States. The company was founded in 1998 by Clayton Christopher, then 25, when he couldn’t find a bottle of iced tea that tasted like the delicious, homemade tea his grandmother used to make for him when he was growing up in Beaumont, Texas. Shortly thereafter, Christopher’s childhood friend, David Smith, joined the company and the two began production brewing their homespun tea in 50-gallon crawfish pots, using pillow cases as tea bags. Made from all-natural ingredients, including purified water, pure cane sugar and high-quality organic tea leaves, Sweet Leaf Tea is made and brewed based on Clayton’s grandmother’s recipe and technique. Sweet Leaf Tea, which is available in 10 classic iced-tea flavors and three lemonade flavors, is available nationwide through Kroger, Safeway and at natural and specialty food stores including Whole Foods. For more information, please visit www.sweetleaftea.com
About Catterton Partners
With more than $2 billion under management, Catterton Partners is a leading private equity firm in the U.S. focused exclusively on the consumer industry. Since its founding in 1990, Catterton has leveraged its investment capital, strategic and operating skills, and network of industry contacts to establish one of the strongest investment track records in the consumer industry. Catterton invests in all major consumer segments, including Food and Beverage, Retail and Restaurants, Consumer Products and Services, and Media and Marketing Services. Catterton has led investments in companies such as Breyers(R) Yogurt Company, Wellness Pet Food, Liberty Safe, Build-A-Bear Workshop, Cheddar’s Restaurant Holdings Inc., OSI Restaurant Partners, P.F. Chang’s China Bistro, Baja Fresh Mexican Grill, Frederic Fekkai, Kettle Foods, Farley’s and Sathers Candy Co., and Odwalla, Inc. More information about the firm may be found at http://www.cpequity.com.