Let’s make one thing clear up front: iced tea isn’t going away anytime soon. Regardless of the variety, sweet or unsweet, functional or just plain old cold tea, consumers aren’t ready to abandon the summertime favorite — at least, not yet. But the category hierarchy sure doesn’t look like it used to.

That’s mainly because of The Coca-Cola Company. When the soda giant announced its plans to discontinue Honest Tea in May, it rocked the beverage landscape and the reverberations are ringing on. While the reasons behind Coke’s decision are varied, the immediate effect has been to reshuffle the deck for both conventional and premium tea makers as they seek space to grow.

Honest Tea didn’t have extensive market share – but pulling it out of the cooler changes the perspective around the whole category.

When Coca-Cola acquired a controlling stake in Honest Tea in 2011, the path forward was clear: with sugary soft drinks under fire, the beverage conglomerate was widening its options and deepening its portfolio with an organic, better-for-you drink with a strong following already behind it. Honest Tea’s power as a mission-focused, clean ingredient brand was soon leveraged for use in other categories — see sports drinks, kids drinks, kombucha and others – that seemed to put the company in step with the progressive, high-spending Whole Foods crowd.

Now, as Honest Tea exits the stage, Coke is preparing its low-key but more widely available alternative, Gold Peak, to step into the spotlight. It’s hard to believe those influential spenders will follow along: while Honest Tea’s organic ingredients, glass bottle options and Fair Trade certification positioned it on the premium end of the spectrum, Gold Peak is a more straightforward proposition, offering either black or green tea-based varieties in 18.5 oz. plastic bottles and only a single unsweetened SKU (along with a zero-sugar sweet tea with aspartame). The economics are clearly better: Gold Peak’s liquid is cheaper to produce — even after shifting away from a concentrate model in 2019 — and PET bottles are easier to place. The brand has a larger foodservice presence compared to Honest and also does broad bag-in-box sales as well.

The good news for Coke is that Gold Peak is starting from a position of strength; according to IRI numbers through June 22, the brand grew bottled tea sales 1.7% to over $478 million, a slightly faster pace than bigger rivals like Pure Leaf (PepsiCo) and AriZona. However, its refrigerated sales slipped 9% to around $227 million.

Gold Peak may indeed be a contender for the premium tea-sized hole in Coke’s portfolio. Right now the brand is complemented only by canned Peace Tea (down -22.5%, according to IRI) on the conventional end, with Fuze Tea having also been phased out in the U.S. — but the gears are already turning. In June, the brand hosted a media event in New York City with cocktail blogger Camille Wilson featuring food pairings and original mocktails that highlight Gold Peak’s versatility. Meanwhile, the brand’s summer marketing campaign, “Tea is for Trying,” features Grammy-winner Questlove of the Roots appearing in three ads.

So what does that mean for the category at large? In the short term at least, it looks likely to clear the way for Pepsi’s Pure Leaf to continue growing its +22% market share, a full ten pointsahead of Gold Peak. While brands Lipton (+2.2%) and Brisk (+14.7%) keep chugging along, Pure Leaf, which is in PET aside from a handful of super-premium SKUs in glass bottles, has subtly refined its identity in recent months, launching a grant program aimed at supporting women in March and introducing three reduced sugar varieties this summer. For new-age beverage survivor Snapple, meanwhile, bottled tea sales slipped -4.9% year-over-year through June, but the loss of Honest may mean its category exclusive relationships with distributors like Polar will become all the more valuable in blocking new competitors from encroaching into its territories.

As for AriZona, the sun keeps shining. Praised for maintaining its 99-cents price point in the face of historic inflation, the company saw a 1.5% increase in dollar sales according to IRI.

With on-premise providing a large portion of category revenues, foodservice is expected to be a focus for brands as they shake off the post-pandemic hangover. For Gold Peak, that means frozen dispensed products like Southern Sweet Tea are receiving more attention, as are limited releases like Brisk’s first ever sparkling tea, Dragon Paradise, exclusively with Taco Bell.

Slightly further away from the heavy hitters up top, challenger brands are still finding opportunities. In the face of crushing shipping costs, Japanese beverage giant Ito En has focused on refining its best-selling RTD SKUs under its own banner, as well as Tea’s Tea and Matcha Love, with new packaging that can help it expand to non-specialty channels. The company is forecasting net sales for its U.S. business to increase 4.2% for FY 2022.

But Honest’s exit may also herald a hunt by distributors for nimble independents that can fill in the gaps left behind; see King Juice’s plans to use its thriving Calypso lemonade banner to enter the space with a 5-SKU line in glass bottles via its NYC-area partner, Big Geyser. Available in single-serve bottles and gallon jugs, Alabama-based Milo’s Tea, fresh off adding two new production lines in a $20 million expansion of its Oklahoma facility earlier this year, also looks an attractive proposition, fueled by +48.1% year-over-year growth in dollar sales (along with+18.3% in pricing) according to Nielsen. With no end in sight to supply chain disruptions and roiling inflation, Joe Tea has also followed Snapple in making the pivot from glass to 18 oz. and 20 oz. PET, a move that has allowed the New Jersey-based brand to drop from around $3 to $2 per bottle and fit about 1,000 extra cases on each truck.

While Coke, Pepsi and the other large brands assess their various paths towards growing in tea, the demise of Honest Tea may have lit the fuse for innovation amongst independents — starting with Honest’s co-founder, Seth Goldman.

Despite taking the news like “a gut punch,” Honest Tea’s closure spurred Goldman to get back into the game with Just Ice

Tea, his new venture announced in June. Though still in its nascent stages, the brand has committed to organic ingredients, Fair Trade Certified sourcing and creating either unsweetened or “just sweet enough” SKUs.

“It’s not like consumers are going to stop drinking tea, so there’s going to be an opportunity for someone to go grab that space,” he told BevNET in June.

In other words, Goldman is looking to recapture those Honest consumers that have been set adrift – but he’s unlikely to be the only one. Unilever-owned, Pepsi-distributed Tazo remains in the mix with organic products across various formats, having recently expanded its family of 32 oz. Refreshers tea-and-juice concentrates. There’s also fast-growing Hoplark out of Colorado, which has leveraged the success of its flagship non-alcoholic hopped tea in natural retailers to enter adjacent spaces like sparkling water and zero-proof “beer.” And while it may be considered more of an ingredient than a fully formed RTD beverage category at this point, matcha is influencing product innovation from trend-forward names like low-calorie lemonade maker Swoon (in collaboration with Chamberlain Coffee) and adaptogenic latte specialists Pop & Bottle.

So for the premium customer, it’s unlikely they’ll be at sea for long – but it’s a fair bet that it will be a while before any of the independent brands link up with one of the big companies. Iced Tea may not be going anywhere for a while, it’s true, but that might not be the best thing, after all.