Sparkling Lipton Tea Looks to Fill Soda Void

The Bubbly Tea Is Backed with a New TV Ad

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Is bubbly tea a cure for the soda blues? Lipton's new Sparkling Iced Tea might offer some clues.

The Pepsi Lipton Tea Partnership, which is a joint venture between PepsiCo and Unilever, recently launched the "lightly carbonated" tea in lemonade, raspberry and peach flavors. On Monday, Lipton will support the launch with a new TV ad by DDB, New York, that touts the product as "the goodness of tea infused with light, crisp, tiny bubbles."

Tea sales are enjoying strong sales growth of late and PepsiCo is outperforming the category. Tea is smaller than the carbonated soft drink category, but soda sales are slumping partly as a result of health concerns. So bubbly teas have the potential to at least counter some of the soda decline for big beverage marketers.

"Every little bit helps," said John Sicher, editor and publisher of Beverage Digest. "People like carbonated beverages, and I think Pepsi is very smart to try to try this sparkling tea product," he added. "Tea is at the sweet spot of beverages that taste good and have some perceived health and wellness benefits."

Lipton's goal is to create more tea-drinking occasions with the product, such as in the mid-afternoon, said Linda Bethea, senior director of marketing at Pepsi Lipton Partnership, which also includes Brisk and Pure Leaf. "We know consumers are reducing their consumption of soda," she said. "And as they do, they are coming to categories like tea and water."

The TV spot features a remake of the 1966 hit song "Tiny Bubbles." The contemporary version is by American Authors. The ad continues Lipton's broader "Be More Tea" campaign that the brand describes as meant to "inspire everyone to break out of autopilot and embrace all of life's possibilities."

Lipton is not the first brand to experiment with sparkling teas. The Sparkling Ice brand, for instance, markets several sparkling teas including one version that pairs "sparkling lemon flavor and a special blend of black and green tea to make every sip fizz with fun refreshment," according to its web site.

"There are others [sparkling teas] out there but not with the clout of Lipton" Mr. Sicher said. "Lipton is the biggest tea brand in the U.S. and popular and powerful in the tea category."

The ready-to-drink tea category grew 3.5% last year, according to newly released figures from Beverage Digest. PepsiCo's tea business -- which comes mostly via the Lipton partnership -- grew 8%, giving the company a 40% share. Coca-Cola, whose tea brands include Gold Peak, grew its tea business by 16%, but the marketer has just 5.5% share, according to Beverage Digest.

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