Cullen Agricultural Holding Corp and ready-to-drink tea maker Long Island Brand Beverages LLC have entered into a definitive agreement to merge their respective companies.
“We are excited to announce the merger with LIBB, which we believe has a differentiated brand in a fast growing segment of the beverage market,” said Paul Vassilakos, CEO of Cullen. “The segment is growing quickly as teas edge out other bottled beverages that consumers consider unhealthy. We believe favourable market dynamics and consumer trends combined with Long Island Iced Tea’s premium ingredients, bold taste and strong brand awareness will enable it to maintain strong growth in the Northeast and expand to other markets in the future.”
The ready-to-drink tea category has grown at a strong 6.1% annually from 2009 to 2014, and is forecast to grow more than 10% annually during the next five years, according to IBISWorld’s January 2014 market research report titled RTD Tea Production in the US. Sales in the RTD tea segment are expected to have reached $5.3bn in 2014. The research also found that while the sector is competitive with the top four ready-to-drink tea producers accounting for approximately 45% of the market, it has become increasingly fragmented in recent years reducing the barrier to entry for new entrants.
Philip Thomas, CEO of LIBB, commented: “Consumers are looking for healthier beverages and iced tea is increasingly filling that need, but there is significant room within the iced tea category for better products. Our passion is offering consumers a healthier iced tea alternative using premium ingredients at an affordable price. We believe combining our business with Cullen will allow us to continue to build our brand awareness and offer broader distribution to make access to our teas easier for even more consumers.”
Long Island Iced Tea is a ready-to-drink tea available throughout a multitude of distribution points in the Northeast, covering supermarkets, grocery and convenience stores as well as wholesalers. The company’s products can be found at select supermarkets such as A&P, Waldbaums, Pathmark, ShopRite, Stop & Shop, King Kullen, Western Beef, Keyfood, and many other retail locations. LIBB is differentiated in the market by providing a healthier, cleaner, bolder tasting iced tea as a result of premium ingredients that include natural cane sugar (sucralose for diet flavours), and hot-filled using black and green tea leaves. Long Island Iced Tea is also gluten-free, non-GMO and has no artificial colourings or flavourings.
© FoodBev Media Ltd 2019
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