Spilling the (iced) tea
It’s going to be a hot summer with steamy competition in the iced tea category. Big-name companies will square off against one another and small producers will try to shave off market share from the top players. They’re all chasing an increasingly lucrative slice of the market, which has grown in value by 5% over the last five years, according to Innova Market Insights, while Statista predicts a CAGR of 1.35% for the period 2025-2029. One thing is clear: There’s good news brewing for the category.
Consumers can expect an epic showdown as two corporate giants do battle on the iced tea front. While they battle, new products are coming to market, and Canadian producers are flaunting their Canada-ness.
Nestea news
Let’s spill the tea on what’s been happening. On December 31, 2024, Coca-Cola stopped producing and bottling Nestea under the Nestlé-owned trademarks after 30 years. Social media erupted, bemoaning the loss of a beloved brand. Meanwhile, Coca-Cola announced the launch of Fuze Iced Tea made with the same recipe.
A day before Fuze rolled out, Keurig Dr Pepper Canada (KDP) issued a press release with the headline, “Nestea Isn’t Going Anywhere, Canada,” reassuring fans that Nestea’s absence is just temporary and would make its return in summer 2025.
“The response from Nestea fans has been overwhelming, with many expressing just how heartbroken they were during our brief hiatus,” says Danielle Stregger, brand manager, Nestea, KDP Canada. “It became abundantly clear how deeply Nestea is woven into the fabric of Canadian life.”
The company will take on the manufacturing, marketing, sales, distribution and merchandising of the iconic Nestea brand in all provinces. The lineup includes classic Lemon, Lemon Zero Sugar, Peach and Raspberry, with 10 SKUs across four formats.
Nestea will make a bold return, backed by a 360-degree marketing campaign: KDP Canada is not only revitalizing the iconic brand, but also introducing fresh, exciting experiences that will keep Canadians engaged, according to Stregger: “From innovative promotions to engaging content, we’re committed to bringing the iced tea Canadians know and love to new heights.”
To help support c-store sales, KDP Canada will lean on its ability to leverage its extensive distribution network. “This infrastructure allows us to bring products like Nestea back to market with speed, scale and precision— ensuring that our retail partners, especially convenience stores, are fully stocked and ready to meet consumer demand from day one,” she explains.
A customer-first mindset is a priority. “We believe our success is directly tied to the success of our partners,” adds Stregger. “That’s why we take a collaborative approach, working alongside our customers to help them win big. For the Nestea relaunch, we have a dedicated support team that works closely with all Canadian retailers, providing tailored support and resources to ensure a smooth rollout and sustained momentum.”
Fuze debuts
As Coca-Cola’s Fuze makes its nationwide debut, it continues to offer consumers a beverage made with real tea and natural fruit flavours across five SKUs. Lemon, Lemon Zero Sugar, Raspberry, and new entries— White Peach and Lemon Green Tea.
And, as Matthew Ross, director of marketing for Coca-Cola Ltd., notes, Fuze is also available in a range of packaging formats, including 341 ml multi-pack cans, 500 ml bottles, 1.75 L chilled cartons, 10x200 ml drink boxes, and as a fountain beverage. Fuze’s success came right out of the gate. Within weeks, it became the No.1 best-selling iced tea in Canada. “Ready-to-drink tea is a fast-growing category within the beverage industry, with 4% growth globally in 2024 and 5% in Q4 2024 alone across the Coca-Cola portfolio,” says Ross. “In the Canadian convenience retail market, Fuze Iced Tea is fuelling an incredible +20-point swing in category dollar sales YTD vs. 2024.”
The momentum is being fed by Coca-Cola’s investment in a massive marketing campaign to reach millions of Canadians through social media, out of home, TV, sampling events, influencer partnerships, shopper marketing, e-commerce and direct-to-consumer sampling partnerships.
“With a goal of delivering two million product samples throughout 2025, our efforts are also supported by the largest digital sampling campaign in Coca-Cola Canada’s history,” explains Ross. “In February, the Fuze Iced Tea Flavour Fleet travelled from Peggy’s Cove to Tofino by land, sea and air to ensure every Canadian had a chance to experience the classic iced tea taste they know and love. We’re continuing this cross-country tour through the summer.”
Coca-Cola is allocating resources to support sales of Fuze in c-stores. “Convenience is a key channel for the ready-to-drink iced tea category, especially for immediate consumption and consumer research has proven in-store displays and promotional activity are strong drivers of trial,” says Ross. “As such, we have created a portfolio of attention-grabbing display tools and promotional materials to capture shopper attention.”
Ross has a theory about the enduring appeal of iced tea: “Iced tea is a nostalgic and refreshing flavour that’s been part of Canadians’ meals and celebrations for decades. Fuze Iced Tea delivers the beloved iced tea taste Canadians grew up with.”
New players
Canadians’ love affair with iced tea isn’t lost on Saint James Iced Tea. Founded by Arizona Beverage Company co-founder John Ferolito, the brand has achieved remarkable growth stateside, becoming the top-selling Certified Organic iced tea. In April, it announced its entry into the Canadian market and a high-profile promotion.
“To kick off the Canadian retail launch, Saint James partnered with brand fan and Toronto Maple Leafs player Max Domi to share the launch on socials,” say Brad Neumann and Brenden Cohen, co-CEOs, Saint James Iced Tea. “We’re also proud to be official partners of Canada’s Boots and Hearts country music festival coming in August.”
Why Canada? “Launching Saint James in Canada is about more than growing our physical footprint,” they say. “We are eager to share our vision and continue our journey of innovation and success on a global scale. Canadian consumers value sustainability and clean ingredients—values that align perfectly with our brand. With Canada’s proximity, consumer base and strong retail relationships, it was the ideal market for our first international retail launch.”
Timing is key, as more Canadians now look for healthier options. Saint James taps into that trend with formulations free of additives with low sugar and low-to-no calories. Its resealable, sustainable packaging also helps consumers feel good about their choice.
LTO from Sprite
Meanwhile, Sprite is hopping on a viral trend. Social media influencers got consumer attention by sticking tea bags into their Sprite, prompting the brand to introduce a limited-time release for the summer, Sprite + Tea (full sugar and no sugar versions).
Home-brewed innovators
Canadian companies are poised to fight for iced tea sales, too. In February, BioSteel unveiled its new Iced Tea Lemonade sports drink: The zero-sugar product also has five essential electrolytes for maximum hydration. From Montreal’s Loop Mission, there are four sparkling iced teas—Grapefruit Earl Grey (in partnership with DavidsTea) Peach Black Tea, Lemon Black Tea and Strawberry Hibiscus—formulated with upcycled fruit to reduce food waste.
Hitchhiker Beverage Company out of Guelph, Ont., is another rising, homegrown star. Made with all-natural ingredients and real brewed tea, its lineup features two black-tea focused SKUs—Casual Traveller Lemon and Postcard Peach, plus Fork in the Road (half lemonade, half green tea).
The company has done well in 2025 as customers seek Canadian products, according to Brooke McPhail, co-founder and co-owner. Her entrepreneurial spirit started early with a hot dog stand in front of the family home. It put her on a path that would see her launch lemonade, inspired by her grandmother’s recipes from the late 1800s.
C-stores are still something the company hasn’t “explored massively,” says McPhail. “But it’s something we’re looking at. We think there’s a gap in convenience store channels for a Canadian iced tea. There’s real opportunity there.”
