Bigelow faces same challenges as startups with launch of first RTD iced teas

The company, which launched the line of Home Blend organic iced tea this summer, claims each bottle of RTD iced tea has at least as many polyphenols – and therefore the same health benefits – as a cup of freshly brewed hot tea.

This distinction is notable considering  research​ by the American Chemistry Society found the average amount of polyphenols in 23 different flavors of bottled iced tea was between 3 mg to 80 mg per bottle compared to the 50 mg to 150 mg of polyphenols in the average cup of freshly brewed hot tea, said Timothy Richmond, RTD sales manager and marketing project manager for Bigelow. 

“We actually claim on the front label the level of polyphenols in each of our bottles of ice tea”​ so consumers know they drinking just over 150 mg of polyphenols when they consume a bottle of peach flavored black tea or half-and-half tea and lemonade and up to 218 mg when they drink the unsweetened black tea, Richmond explained. He added that the two SKUs of infused green tea – citrus pomegranate or mango lychee – have 50 mg to 150 mg of polyphenols per bottle.

“This means every one of these bottles has at least the same health benefits as a cup of tea, which is really exciting for us,” ​Richmond said.

He noted that many competitors dilute the amount of tea, which is expensive, with water to help keep down the cost of the finished product so that it can compete more directly with lower priced sodas and other RTD beverages.

Other competitors also do not use as much tea because they need space for the sugar and flavorings that they add to make the bottled beverages more appealing to the American palate.

Competing on price and quality​

Bigelow is able to add more tea to its bottles than many other firms and remain competitive on price, even though the extra tea raises production costs, because of its size and established position in the bagged tea arena, which gives it buying power to negotiate “really good prices on our teas,”​ Richmond said, adding this is a benefit that most startups do not have.

However, like other newcomers to the RTD beverage category, Bigelow’s iced teas currently have limited distribution in the Northeast, and therefore less buying power when it comes to negotiating the purchase of bottles, caps, wrappers and the use of filling equipment, Richmond added.

As a result, the beverages are sold at a slight premium with a suggested retail price of $1.79 per bottle, but it can go as low as two for $3 on deals, he said. Hopefully, he added, as distribution increases, the price will decrease.

Building distribution will not be easy for the brand, Richmond acknowledged. He explained that distribution of the bottled beverages currently is the company’s biggest challenge.

“Ready to drink is very new and a very different animal than the hot tea business for us,”​ Richmond said. For example, he explained that Bigelow understands how to stack pallets of loose and bagged tea for efficient shipping, but filled bottles are heavy and take up more space so more trucks are needed to ship the same level of sales.

“These are the same distribution challenges that other beverage companies have out there. … But we are really trying to do it right and work our way through the system and learn as we go,”​ he said.

Driving initial trial ​

Just like start-ups, the other major challenge Bigelow is grappling with related to its bottled iced teas is encouraging consumers to try the RTD beverages, Richmond said.

“We think we have an unbelievable taste in product, and we think it really has some great benefits. But we need to get that story across to consumers​” so they will forgo buying the beverage they already know and love and try something new, he added.

To help the new brand break through clutter and grab consumers’ attention, Bigelow created a full bottle wrapper that gives it plenty of “real estate”​ to talk about the health benefits of the tea compared to competitors as well as the higher concentration of ingredients and taste, Richmond explained.

Recognizing today’s consumers want to see what they are buying before they pay for it, Bigelow created a clear logo running down the side of the bottle that allows consumers to see the liquid inside. In addition, the photo on the wrapper is of the actual tea, so it gives consumers an honest, authentic impression of the beverage inside, Richmond said.

The company also used tried and true methods to drive initial trial, such as hiring a street team to distribute samples and raise awareness.

Richmond said he is happy with how the brand’s first summer went and hopes that the beverage will continue to expand throughout the East Coast in the second year and then slowly push West after that.