After Coca-Cola abruptly announced it would shutter production of its Honest tea offering in May of 2022, few understood the lucrative market opportunity that would open up better than Seth Goldman.
The entrepreneur helped co-found Honest 24 years earlier and remained convinced there was still a thriving market for an organic, less sweet tea. Goldman wasted no time, announcing two weeks later plans to introduce a then-unnamed brand to fill the void. In September of that year, Just Ice Tea made its way to store shelves — bringing with it many of the same characteristics that made Honest tea a success.
Today, Goldman’s prophecy has come to fruition. Sales of Just Ice, which totaled $16 million in 2023, are forecast to top $20 million this year. It’s a remarkable rate of growth for a young brand poised to generate the same amount in sales after just 18 months on the market versus the eight years it took Honest to reach the same threshold.
“We certainly expect to capture the volume that Honest tea had,” Goldman said. “And I’d say we’re well on our way to doing that. But then the question is, ‘Okay, now, how do we sort of propel the business beyond where Honest was, what are the opportunities and spaces?’ ”
Earning its place on the shelf
Just Ice’s rapid rise reflects favorable trends Goldman identified when he launched the brand.
The market for a product like Just Ice — which has fewer calories since it doesn’t use sugar, is Fairtrade certified and organic — has grown exponentially from what it was when Honest first hit the market in 1998.
Goldman and his team have a favorable reputation from their time at Honest that has followed them to Just Ice. They also have close relationships with growers, manufacturers, suppliers and retailers. It’s not uncommon for stores to devote shelf space to Just Ice before even seeing or trying it, Goldman said.
Seth Goldman, co-founder of Just Ice Tea
Permission granted by Eat the Change
Just Ice so far has nine tea flavors on the market, several of which are reincarnations of the most popular Honest tea offerings, including Honey Green and Peach Oolong. The brand is part of Eat the Change, a four-year-old startup making environmentally friendly, nutrient-dense snacks from carrots, mushrooms and other plant ingredients.
Goldman said they are devoting time and resources to expanding the brand into geographies where Just Ice doesn’t have a strong presence and growing distribution into mainstream retailers. Just Ice is already the best-selling tea brand at Whole Foods and other natural channels.
Another promising growth opportunity for Just Ice is the addition of aluminum cans last month as a packaging option. Previously the brand only bottled its beverages in glass.
Aluminum cans provide Just Ice with an inroad to convenience stores and food service establishments that typically shun glass. The material also is more conducive to club stores or online channels because of its lower weight. Finally, recycling for aluminum is more established and better understood by the public than glass, making its green footprint more attractive to individuals who factor this into their buying decisions.
With a dozen SKUs in its portfolio — a large number for a brand as young as Just Ice — and now aluminum cans, Goldman said the brand is prioritizing increasing consumer awareness and distribution before adding new products to the mix.
“We have to make sure everything we have works and has earned its place on the shelf,” he said.
Optional Caption
Permission granted by Eat the Change
Need for speed
The rapid expansion of the brand, at least initially, was built largely on a desire to capture the market left from Honest’s departure that executives were confident was still there. Eat Just didn’t have the luxury of gradually rolling out Just Ice.
“We knew it was going to require an aggressive move and determination to capitalize on it,” Goldman said.
While Just Ice has similarities to Honest, it does possess some notable differences.
Just Ice uses agave instead of sugar, part of Eat the Change’s support of biodiversity in agriculture. It also eschews plastic in favor of glass bottles and aluminum to improve the environmental footprint of its packaging.
Despite the parallels, there is one that hasn’t cropped up for Goldman, at least for now: a sale. Goldman and Barry Nalebuff sold a 40% stake in Honest tea in 2008 to Coca-Cola for $43 million with an option that was exercised three years later to purchase the rest of the company for an undisclosed amount. He hasn’t thought about a sale for Just Ice, and said he hasn’t been approached by anyone.
“I’m not wasting a lot of energy or time on that,” he said. “We’re focused on building a brand … It’s so early in what we’re doing that it’s hard to even conceive of that.”
Source link
