ATLANTA & VEVEY, Switzerland -- The Coca-Cola Co. and Nestle SA have agreed to scale back their beverages joint venture. The companies will phase out partnership in the United States by the end of the year and focus on Europe and Canada, according to a report by Forbes.
The joint venture between the two companies, known as Beverage Partners Worldwide, sold ready-to-drink (RTD) teas under the label Nestea.
The move will also give Atlanta-based Coca-Cola the freedom to launch its independent RTD tea brands, said the report.
Since U.S. cola sales are declining because of consumers' preference for healthier products, it is important for Coca-Cola to grab a foothold in the fast-growing RTD segment, the report added.
Coca-Cola's current portfolio in the RTD segment includes Gold Peak iced tea, sold in the refrigerated cases of grocery stores. The company recently also purchased organic tea maker Honest Tea and will soon launch Fuze teas, a fusion of tea and juice flavors, to replace Nestea, Forbes said.
Vevey, Switzerland-based Nestle owns the Sweet Leaf Tea Co.
Atlanta-based Coca-Cola Co. is the world's largest beverage company with more than 500 sparkling and still brands. Led by Coca-Cola, the world's most valuable brand, the company’s portfolio includes 15 billion-dollar brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle.