• Business - Product Reviews
  • Updated: September 20, 2020

Are Ice Tea Brands Unprofitable As Retailers Shun Lipton, Chivita Ice Tea

Nigeria's beverage market is saturated by various flavour, but while soft drinks have become a household product, retailers have continued to distance themselves from the Ice Tea brands which are proving to be water in the basket investment.

Recently, Lipton stunned its consumers in Nigeria by expanding its business portfolio with a ready-to-drink pet bottle, launching its own Ice Tea brand. The entry by Lipton into the sweetened Tea market pit it against the likes of Chivita Ice Tea.

This product is a sweetened tea that is without milk but mixed with different flavours such as peach, passion fruit, lemon, mixed berry, herbal and ginger. Aside from its raw materials, the packaging differentiates these Ice Tea brands in the market. But they are majorly classified into green Iced tea and black Ice tea.

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The major players of the global Ice tea market are Coca-Cola Company, Arizona Beverages USA, Mother Parkers Tea and Coffee Inc., and Unilever. But in Nigeria, Chi Limited, Unilever and PepsiCo (both parent company of Lipton) run the market.

Global Growth Not Reflecting In Nigeria: The global market for tea was valued at $50 billion in 2017, but this figure is projected to hit $73 billion in the next four years. And this growth is expected to rub off on the Ice Tea market with North America and the Asia Pacific expected to contribute largely to the growth of Ice Tea.

But in Nigeria, Ice Tea is still struggling to gain penetration among Nigerians, this is why the distribution of Ice Tea is mostly regional in Nigeria rather than national like the other beverage or carbonated drinks of Bigi brands, Coca-cola and Pepsi.

Marketing And Branding Not Enough: The move by Lipton gave the company another shot in the spotlight having seen its yellow label tea bag overshadowed by Nescafe. Lipton tea bag was once the toast of caffeine lovers, but Coffee products like Nescafe have de-monopolise Lipton's grip.

Lipton made a grand entrance into the Ice Tea market by sponsoring a reality show, Big Brother Naija, that is popular among Nigerian households. That was how many Nigerians got to know about Lipton Ice Tea. However, that marketing stunt might have little or no impact on consumer behaviour towards Ice Tea brands.

Just like Chivita Ice Tea has struggled to switch consumer preference from carbonated drinks to Ice Tea and cement loyalty among Nigerians, Lipton Ice Tea is on the same path as retailers and consumers are not swayed by the Ice Tea products.

Earlier this year, Chivita Ice Tea had rebranded to better connect with consumers, but a recent interaction with some consumers proved the publicity of Lipton and rebranding by Chivita has done little to improve the acceptance of Ice Tea in the market and this is compelling retailers from stocking Ice Tea products.

Why The Struggle?

Preference For Cocoa Powder: Cocoa powder brands are still very much popular among Nigerians. They prefer to mix cocoa powder with milk rather than purchase the pet bottle or ready-to-drink pack Ice Tea. And besides, some people prefer their Tea hot instead of drinking it cold.

Carbonated Drinks: Nigerians will rather buy a carbonated drink than purchase the ready-to-drink Ice Tea. This is because they are available and cheaper compared to Ice Tea - also, the loyalty runs deep and has become a tradition for most.

Seclusion: In some quarters, Ice Tea is seen as a luxury drink. And the distribution is not widespread like the soft drinks which are distributed nationwide. Only carbonated soft drinks are readily available compared to Ice Tea brands which are almost secluded.

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Health Consciousness Is A problem: The level of health consciousness among Nigerians is not as high as European countries, North America and Asian Pacific. In these climes, Ice Tea is seen as a healthy alternative to carbonated drinks.

Countries that are experiencing growth or widespread acceptance of Ice Tea have a high level of health consciousness. This is because Ice Tea are not just considered as refreshing drink abroad, as Ice Tea helps the body to maintain hydrated levels as well as boosts the antioxidants.

Ice Tea Not Profitable

In an interview with some retailers, AllNews was told: "we can't sell what consumers are not demanding". This was a chorus among the retailers who were not selling Ice Tea.

According to a drink store owner, Vivian Nzewke, consumers don't demand for Ice Tea, so she can't sell what's not in demand, "I don't sell Ice Tea. I buy exactly what people need. I don't buy (drinks) for buying sake, I only buy what consumers request for."

The owner of a neighbourhood supermarket at Oke-Ira, Ogba, Emma and Henry Supermarket, said she knows about the Ice Tea product but doesn't stock it due to its poor demand in the market. The owner who spoke in anonymity said Ice Tea doesn't move in the market.

Some other Neighbourhood Supermarket also seconds the opinion of Vivian and the owner of Emma and Henry Supermarket.

However, store attendant, Ebuka, told AllNews that the store sells Chivita Ice Tea, but doesn't know about Lipton Ice Tea. According to him, Chivita Ice Tea stays longer in store. While some 'mom & pop' store said they are not familiar with Ice Tea products.

Some of the hawkers spoken to said they hawk Lipton Ice Tea, but compared to drinks like Coca-cola, Pepsi, Bigi brands, it sales are low. AllNews gathered that the sales ratio between the soft drinks and Lipton Ice Tea is at least five to one.

This assertion is not expected to change anytime soon if Nigerians don't see the worth of Ice Tea beyond a refreshing drink. If this mentality continues, consumers preference will always be soft drinks.

Note that the projected growth of Ice Tea in the coming years has been tied to the level of health consciousness among individuals, so if the demand for Ice Tea in Nigeria is to grow, then Nigerians will have to start considering Ice Tea as a healthy drink.

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Olalekan Fakoyejo
Olalekan Fakoyejo

Fakoyejo Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ)....

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