Coke, Nestle Rework Agreement

Press enter to search
Close search
Open Menu

Coke, Nestle Rework Agreement

ATLANTA -- Coca-Cola Co. will be able to sell its own brands of ready-to-drink coffee and tea for the first time in 15 years now that it's amended an agreement with Nestle.

The Atlanta Journal-Constitution reported that Coke and Nestle, who have worked together for 15 years to produce and market beverages, will go their separate ways when it comes to coffee and so-called red, white and green teas, which are the rage in some countries, but have yet to make their mark in the United States.

The Coke-Nestle joint venture, Beverage World Partners, will still develop and market black tea products -- the dark-colored teas most familiar in the United States. The 50-50 partnership also will continue marketing its new "calorie-burning" green tea, Enviga, which hit metro New York and Philadelphia yesterday, the newspaper said.

Industry watchers say the revised deal will allow Coke to develop new coffee and tea products faster and avoid having to split the profits. "It gives each company the unfettered ability to compete in the marketplace individually and against each other," said John Sicher, publisher of Beverage Digest, an industry newsletter.

One of Coke's most popular drinks in Japan is a ready-to-drink coffee called Georgia. Under the agreement with Nestle, Coke can't bring something like Georgia to the United States without going through the partnership, Coke spokesman Dana Bolden said.

Japan accounts for roughly a fifth of Coke's annual profit, thanks in large part to Georgia coffee. The pull for Coke to do more with the concept globally is strong.

"The coffee category is a major opportunity," Bolden said.

Coke is experimenting with single-serve brewed coffee at restaurants and convenience stores in North America under the brands Far Coast and Chaqwa. Those brands could be used for a new ready-to-drink chilled coffee under the same name, using the technology already created for Georgia, according to The Atlanta Journal-Constitution.

Coke's new Godiva drink, just now hitting stores in Atlanta, contains coffee but is marketed as a chocolate drink, keeping it outside the Nestle joint venture.

Nestle was unable to be reached for comment.