Market Trends

‘Lipton’s full of sugar!’ Charbrew keen to take on Unilever iced tea

09-Jun-2014 - By Ben Bouckley+
Charbrews 'Ice Tea' will launch in Holland & Barrett this Wednesday
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Charbrew founder Adam Soliman tells BeverageDaily.com his entrepreneurial brand is keen to take on Unilever iced tea Lipton with a healthier UK alternative launched into Holland & Barrett this week.

Founded in 2009, Soliman's Cheshire-based company currently has annual sales of circa. £500,000 ($840,000) and initially focused on hot tea – with kooky flavors such as Strawberries and Cream and Chocolate Orange teas in pyramid bags – but is set to launch an iced tea on Wednesday after two years of development.

Soliman (pictured) tells BeverageDaily.com that Charbrew’s iced tea, in Orange Tropica and Lemon Citrus flavors, will launch in 250 Holland & Barrett stores, and he hopes to quickly extend distribution beyond the health and wellness chain into foodservice channels and other retailers.

With an initial recommend sale price of £1.99 ($3.34) for a 500ml bottle – Soliman hopes to take this down nearer to £1.50-1.60 in time – the product is more expensive than Lipton, but Charbrew’s founder insists he wants to stay in touch with Unilever’s brand, while beating it on quality and health grounds.

'No-one's really competing with Lipton!'

Charbrew’s range uses natural tea, no added sugar, a natural fruit sweetener for a lower calorie count, natural ingredients (orange and lemon flavors) and contains added B-Vitamins.

“There’s no-one really competing with Lipton. They’ve got pretty much 90% of the marketplace, and have doubled their revenue in the space of two years,” Soliman says.

“But if you go to the States, Lipton is not known as a particularly strong brand, which is why many of the other iced tea companies have overtaken it, like Arizona Iced Tea, for instance” Soliman adds.

He tells us that Lipton RTD tea is full of sugar - incidentally, we looked, the Peach flavor contains 34g of sugar per 500ml bottle - and “is not really addressing the health-conscious consumer in the UK”.

Despite Charbrew's debut in hot tea, Soliman said that growth in so-called ‘hot cold drinks’ including iced coffee prompted it to make the move into iced tea, which is itself growing strongly in the UK, albeit from a low base.

'We're a tea brand! Why the hell don't we launch an iced tea?'

“I thought to myself: ‘We're a tea brand, why the hell aren’t we doing anything about it?!” he says.

“It’s still a small marketplace, but the growth is huge, with people moving away from the likes of Coke. They feel that, although Lipton is still full of sugar, it’s healthier," he adds.

Soliman admits there are other iced tea brands on the market aside from Lipton, but really only in glass bottles sold at a premium price point, via high-end UK grocery chains such as Waitrose.

“We’re trying to position ourselves within 25-30% of Lipton. We’ve got a better USP, and we want to be competitive on price,” he says.

“But our iced tea is not just up against Lipton, it's taking on the soft drinks category as a whole, which is moving away from more sugary drinks to healthier alternatives," he adds.

When push comes to shove, big brands innovate...

Insisting that bigger rivals such as Unilever can take some time to get to grips with market trends, Soliman says they only tend to react when they see a potential threat in the marketplace – creating a me-too product, for instance.

Asked about the wider prevalence of tea extracts as an ingredient in soft drinks, he says he wants the Charbrew name to become synonymous with good quality mainstream iced tea, rather than a brand that simply uses it as one more ingredient.

“In the UK, people aren’t really receptive to iced tea on its own, so you need some sort of flavour proposition,” he says.

“Brands are picking-up on health conscious trends – but take Little Miracles, is it an iced tea or a healthy drink with a tea extract in? Soliman adds.

"Walking down the high street, someone might see Little Miracles and pick it up. But I want people to think ‘I really fancy an iced tea', then identify Charbrew’s as the best iced tea they’ve tried," he says.

Having an iced tea in its portfolio helped Charbrew reduce the risk posed to its business by the seasonality of tea, Soliman said, which despite being drunk all year round in the UK is seasonal to winter.

'The minute you mention iced tea, buyers want to meet you!'

Discussing Charbrew's progress in hot tea, Soliman insists it has established a good rate of sale for five products launched into Tesco this March and April, and he hopes to expand from 230 of the retailer’s stores into more outlets.

Soliman sees Charbrew’s hot teas as a “special purchased for a more discerning tea customer, but one that can be bought on a weekly basis” – it sells at £3.49 for 15 bags of a unique blend, compared with £4+ for 15 bags from rival (Tata owned) Tetley brand Teapigs.

Despite this success, Soliman is enthused by the immediate products in RTD teas. “Surprisingly, hot tea doesn’t get much interest from buyers. The minute you mention iced tea – maybe because not a lot of people are doing it, they say, ‘That sounds great, we’d love to meet!” he says.

"I've never had such positive reactions, to want to meet. It's so bizarre, and I've thought to myself, 'Have I been doing it wrong all these years? I should have just started with iced tea!" he adds.

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