Steaz, with its tea-based sodas and energy drinks, has long been a mainstay in the natural foods channel, but – suddenly – it’s a conspicuous participant in mainstream grocery stores.
The brand announced last year a new line of organic, fair-trade iced teas in 16 oz. cans, and has recently pushed that line into mainstream grocery stores. The introduction employs imposing floor displays and a price point that rivals that of category leader AriZona. Cans sell at 10 for $10, and 64 oz. multi-serve jugs sell for 2 for $5.
“We sacrificed some margin to introduce these lines as an affordable organic play,” said Steaz Co-founder Eric Schnell.
Schnell said the initiative lets the brand, which has spent the better part of a decade building its credibility among Whole Foods consumers, dip its toe into the mainstream market. If it works out, more of Steaz’ products could follow.
Schnell said the beverage category managers he worked with were looking for an organic tea to back. Mainstream grocers have increasingly installed natural foods sections over the past few years, as consumers have become more interested in “better for you” foods. That trend has offered entry for brands like Reed’s, Honest Tea and Sweet Leaf, but those brands have generally brought premium prices with their premium products.
Schnell’s new introduction borrows from both worlds: organic and budget-friendly. While it’s not a huge money-maker for the brand, he sees it, in part, as a marketing move. The company has a number of other high-margin items, including a 2 oz. energy shot that sells for $2.99, that the tea could help bring attention to. And he said Steaz is prepared to raise the price on its iced teas when consumers are ready.