The agreement between Coca-Cola and Nestlé to distribute Nestea ends this year and Fuze Tea will take over

Jane Anderson
Jane Anderson
un bodegón de las botellas de fuze tea

The sector of RTD tea has experienced notable growth of 6.3% over the past five years, according to Nielsen data. And the projections are promising, with expectations that the value of the category will double by 2030.

In this context Fuze Teaowned by The Coca-Cola Company, already present in more than 90 countries, has become Coca-Cola’s spearhead to conquer this market. The brand is the one that contributes the most to the growth of the RTD Tea category in key European markets such as Germany, where it is the market leader in both share and brand awareness, as well as in France, Italy and the Netherlands.

Therefore, in a strategic move for the soft drinks sector in Spain, Coca-Cola has been launching in stages the Fuze Tea brand since May 2023. As the company explains, the product has exceeded expectations, reaching sales objectives and surpassing brand awareness and product testing among consumers.

Coca-Cola’s historic collaboration with Nestlé in the production of Nestea dates back to 1993

And the historic collaboration of Coca-Cola with Nestlé in the Nestea productionwhich dates back to 1993 and as a result of which this product was born as a novelty, will come to an end on December 31, 2024 in Spain. As a result, there has been a significant shift in Coca-Cola’s strategy to dominate the growing ready-to-drink tea market and the situation raises questions about Nestea’s future in the Spanish market.

Nestea has long been the leading brand in the tea soft drink segment in Spain, with a value share of more than 70% in the general market and competition only from Lipton (PepsiCo) and private labels. The fact that from January 2025 Coca-Cola will stop distributing Nestea in Spaincould significantly affect its market penetration in the near future.

Carlos Martín, General Director of Coca-Cola Iberia, expressed at the last event held for Fluze Tea his confidence in replicating the international success of the brand in Spain. Thus, the launch strategy is ambitious: Fuze Tea is expected to be available in more than 225,000 points of sale before the end of the year. It’s worth noting that the Fuze Tea range includes low-calorie, sugar-free versions of SaborOriginal, as well as varieties such as Green Tea-Passionfruit and Mango-Pineapple.

To publicize the drink, this summer Fuze Tea went on tour in Spain. The brand visited Madrid, Seville and Barcelona aboard a camper van, inviting consumers to experience the Fuze Tea Fusion range first-hand.
For its part, the launch of Fuze Tea Sabor Original will be accompanied by a multichannel marketing campaign. The presentation of the product took place in an immersive event in Madrid and the campaign, designed by McCann, will be deployed on television, digital media and outdoors.

Regarding the main target, Fuze Tea aims at “Modern Explorers”a segment of young-adult consumers who value new experiences and moments of disconnection. Furthermore, Fuze Tea is made by fusing three natural ingredients: tea, fruits and herbs. A value proposition aligned with the growing demand for more natural and healthy products.

The decision to bring Fuze Tea to Spain after its success in other markets illustrates how brands can capitalize on their international triumphs and the importance of differentiation in a competitive market. It is a reflection of how a global brand can adapt its strategy to capitalize on market trends, reinvent product categories and connect with new consumer segments. Besides, Coca-Cola’s decision to switch from Nestea to Fuze Tea demonstrates the importance of being willing to reinvent strategies, even when this means ending long-standing collaborations.