2 March 2009 353 views No Comment Email This Post

Tea company halts production of iced tea label due to high costs, low profits, excessive competition. CEO says, ‘The product is made out of the finest raw materials. We are not willing to compromise the quality in order to reduce costs’

As of March 1, Wissotzky Tea is ceasing production and marketing of Ice T – its iced tea product, due to low profits and excessive competition in the soft drink market, the company’s CEO announced Sunday.

The final decision was made after the company tried to solve its problems by marketing the product via a soft drink company in Israel and failing. According to Wissotzky, the profits on the brand were very low due to the costly raw materials and marketing expenses.

Ice T has two main competitors – The Coca Cola Company’s Nestea and Yafora-Tavori’s Spring.

“Fifty percent of the soft drinks market is found in the soft drink refrigerators of kiosks and we are not there,” Wissotzky CEO Ronnie Weinstein told Ynet.

“This is due to the fact that we mainly belong to the hot drinks field, and most of those refrigerators belong to the soft drink companies that put their own products in there. Even in marketing chains there are shelves meant for soft drinks, and we weren’t there, but were in the corner, far from the consumers’ focus,” he added.

The Wissotzky Tea company was the first company to produce iced tea in Israel, starting out 13 years ago. The company’s remaining stock of Ice T is expected to run out at sales points within one to two weeks.

Is there any chance Ice T could make a comeback? Not according to Weinstein. “Leaving is hard, getting in is even harder,” he said in response.

“The label Ice T is an old and loved brand by a wide range of customers. The product is made of the finest raw materials, and we are not willing to compromise the quality of the product in order to reduce costs.

“Unfortunately, since we cannot cooperate with the soft drink distribution companies, and since we will not set up our own separate system to market the cold drinks, we are unable to maintain the continued existence of the brand, that holds marginal weight in the company’s activity. Therefore, we will stop producing Ice T from that date this announcement is published.

“We apologize to the loyal Ice T consumers, who can still find a wide variety of alternatives in Wissotzky teabags, from which they can always make iced tea on their own at home. Wissotzky is examining, in Israel and abroad, entering new categories in the food industry, that are compatible with the company’s distribution system.”