Industry News | March 31, 2009

Nestlé Waters Gets in the Organic Game

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Organic and all-natural products aren’t just for the up-starts anymore.

Last week the No. 1 bottled-water company in the U.S., Nestlé Waters North America, invested $15.6 million in the Austin, Texas–based home-style beverage company Sweet Leaf Tea with the option to buy.

The partnership will transform the regional brand, which is available in about 30 percent of U.S. markets, to one with national distribution within the next two years.

“We've always had a dream for Sweet Leaf Tea to become a household name and we believe that every consumer has a right to be able to buy a better tasting, better for you, ready to drink iced tea,” says Clayton Christopher, president and CEO of Sweet Leaf Tea.

Christopher says Nestlé’s interest in the organic, all-natural company proves that it is committed to bringing a quality product to consumers in the most environmentally conscious way possible.

Of course, the growing interest in sugar cane–sweetened products among consumers doesn’t hurt either.

“Consumers are moving away from artificial ingredients and opting for all-natural products like ours, and Nestlé Waters sees that,” Christopher says. “One of the things [Nestlé] looked at was the trend toward all-natural products in quick-serves and how our product fits the quick-serve customer’s needs.”

Quick-serves are key to Sweet Leaf Tea’s national growth.

According to Christopher, the company will focus expansion on mainstream channels like grocery chains and also increase its presence nationally through quick-serves.

But for a company where employees are allowed to bring their dogs to work and wear t-shirts and flip-flops during the summer, there’s little concern that the takeover by the Nestlé juggernaut will effect Sweet Leaf Tea’s small-scale feel.

“We are remaining completely autonomous from Nestlé. They are going to be the driving force in our growth, but our company's culture will remain the same,” Christopher says.

One certain change for the company will be the addition of Dan Costello, a Nestlé Waters North America executive. Costello will relocate to Austin and become president of Sweet Leaf Tea.

Nestlé Waters will also add two directors to Sweet Leaf Tea’s Board of Directors.

Sweet Leaf Tea offers 10 classic iced-tea flavors and one lemonade flavor.

--Blair Chancey

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