The Just Ice Tea express rolled through BevNET HQ yesterday, with CEO Seth Goldman and Cyndi Ireland, Sales Director and Head of Sales for Conventional & Mass Channels in the engine car to talk through developments with the brand, which Goldman launched shortly after the Coca-Cola Co. shelved his previous brand, organic and fair-trade Honest Tea.
At the top of the agenda: the launch of 12 oz. cans; although already in tests in Sprouts and Giant, with Stop&Shop and Hannaford coming on board via warehouse delivery, the big aluminum unveiling for national buyers and distributors will take place at Natural Products Expo West next month in Anaheim.
There are three 12 oz. varieties: Dragon Green (a reconstituting of old Honest variety Green Dragon), Raspberry and Lemon, each under 50 calories and labeled “Just Sweet Enough” via agave or honey.
Goldman said the cans give the brand a chance to move into more use occasions, specifically 4-packs in grocery. Glass bottles – the environmentally friendly pack that launched both Honest and Just Ice Tea – remain important for single-serve in the natural channel and a strong introduction to the brand.
“I do think you know glass which obviously is a mainstay of the business and is the perfect entry package,” he said. “It will get you to a certain volume, but to get beyond that, you’ll need to go with a more accessible package.”
You know, you look at tea, there’s an awful lot of tea sold in cans,” he added, referring to RTD leader AriZona. “But could you upgrade that?”
Other likely areas for single-serves of the cans will be schools (he said key NY distributor Big Geyser is already presenting it to school districts) and office cafeterias with grab-and-go. There’s also potential for an efficient Club channel pack down the road, according to Ireland.
The brand grew from about $3 million to $16 million wholesale last year, and is looking at well over $20 million this year – with variables including big chain accounts that may work out, Goldman said.
The company’s strategy is still largely aimed at recapturing the Honest consumer so far. In natural channels, he cited SPINS data indicating the brand is at about 80 percent of the retail dollar sales volume of Honest at the time of its discontinuation, but at a higher price point and lower unit volume.
“We still know there’s more to capture in the core market before we begin expansion,” he said.
But with channel expansion in the offing, the idea is that cans could match glass about three or four years down the road.
So what’s challenging? Numerous items, according to the pair.
For one, the Just Ice Tea swap in for Honest only works in what were core Honest channels.
“When you go into the natural retailers, they obviously are like, ‘Oh, yes, Honest… it left such a void,’” Ireland said. “It’s a very different discussion with the national retailers, there’s new buyers on the desk, younger buyers, and… we talk about the honest story, and they’re kind of like, ‘okay, so what?’”
That’s when the sales team leans on an attribute slide, pointing out glass packaging, organic certification, no use of high fructose corn syrup or sugar or fair trade – attributes that are increasingly valued in mainstream retailers, regardless of brand story.
Goldman cited increased competition for shelf and truck space – both with canned teas and other beverage types. When he pitched Just Ice Tea to DSD partner Honickman in the mid-Atlantic region, “We didn’t have to prove ourselves,” and the distributor took six SKUs of Just Ice Tea (up from three when he introduced Honest all those years ago). But “these guys are super sensitive,” around margin and velocity – attributes owned by the energy drink category, which is flourishing.
There’s also a naming issue around the parent company. Just Ice Tea, while a quick rejoinder to the cancellation of Honest, doesn’t have the same flexibility as the previous brand, and it’s under the broader company Eat the Change, whose snacks aren’t taking off the way the drinks are. But Just Ice Tea isn’t broad enough.
“We wouldn’t call a company Just Ice Tea,” Goldman said. “Because we’ll be more than that. But we don’t know what that is yet. The frustrating thing is, you go to look at the Expo West directory, and you look for Just Ice Tea, you’re not going to find it,” he said. “So that’s obviously an identity issue. We’re gonna have to work through it.”