Nestea Iced Tea in China

Nestea Iced Tea in China

Code: ML-ML00022-004 | Published: Mar-2016 | Pages: 15 | MarketLine
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Nestea iced tea was extended into China in the early 2000s by Nestea in conjunction with Coca-Cola, intended to capitalize on the countrys growing ready-to-drink (RTD) tea market. After 13 years, the line had to be withdrawn from the Chinese market, having lost brand value for four consecutive years.

Key Findings
- Learn about Nesteas entry in to the Chinese RTD tea market and understand why it ultimately failed.
- Understand the market dynamics of Chinese consumer markets.
- Assess how other companies may avoid a similar failure.

Reasons To Buy
What is Nestea?
Why were Coca-Cola and Nestle eager to enter the Chinese RTD tea market?
Why did the brand ultimately fail?
What can other companies do to avoid a similar failure?

Table of Contents

Partnership fails to secure sustainable market share
Initiative aimed at capitalizing on growth market ends in withdrawal
Nestea targeted its iced tea at young adults
Uninspiring flavors, lack of differentiation and functional drinks contribute to failure
Risk-averse flavor profile unable to leave strong impression
Undifferentiated positioning weakens competitiveness
Failure to respond to the rise of functional beverages
Lack of innovation is brand suicide in a Chinese market full of opportunities for niche products
Further Reading
Ask the analyst
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List of Figures
Figure 1: Nesteas "rise and fall" in China, 2002-13
Figure 2: RTD tea brand share in China, 2014
Figure 3: Nestea Iced Tea Promotional Material
Figure 4: Responses of "I often experiment with buying new tea (including RTD) products," among Chinese consumers, 2014
Figure 5: Master Kong and Uni-President marketing material
Figure 6: China: five-year CAGR (%) for RTD tea, 2005-15
Figure 7: China: the number of new functional drink SKUs launched, 2000-13
Figure 8: China: volume sales in soft drink (million units) by motivation

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