Coca-Cola Takes Stake In Honest Tea
Coca-Cola has acquired a 40% stake in Honest Tea, which in 1998 became one of the first beverage brands to hop on the organic bandwagon. It offers dozens of low sugar tea SKUs, including Heavenly Honey Green tea and Pomegranate Red Tea with Goji Berry, as well as an Honest Kids line and Honest Ade juices.
The current deal was valued at $43 million with the right to purchase the rest of the company in three years. Honest Tea is the latest "bolt on acquisition" for Coke which has been looking strengthen its non-carbonated drink portfolio.
Coca-Cola sells Nestea and Enviga under a joint deal with Nestea as well as Gold Peak and Fuze teas. However, it owns only about 11% of the tea category which was up 23.6% for the first nine months of last year. PepsiCo's Lipton and SoBe teas were first with nearly 40% of the category followed by independent beverage company AriZona and Cadbury Schweppes' Snapple.