02 Oct 2013 Ambitious BOS iced tea eyes further expansion

Dave Evans, CEO of privately-owned Bos brands says “At the moment it’s a very small market relative to well-established ice tea markets like the US, Europe, China and Japan but there’s definitely an opportunity to expand into broader Africa, especially as gross domestic product growth rises.

Ice tea is a really strong category in countries where there’s high disposable income, and as Africans become wealthier, we’re seeing more and more consumer goods companies looking at the rest of the continent as the next big prize.”

Launched in June 2010, BOS is rooibos tea-based, and is caffeine-and preservative-free. Within its first year, the brand established national distribution in more than 1,200 outlets (including Woolworths, Pick n Pay, Spar, Makro and Engen forecourts).

“In South Africa, ice tea is a R750m market and it’s growing very well at 8% year on year, but it is minuscule compared to the rest of the world.

“Globally, ice tea is a $70bn market and it’s one of the most attractive beverage categories in the world because it’s got a health positioning and it is growing rapidly.

“The US is a 22-litre per capita consumption market, while in South Africa it is 0.8-litre. Even Western Europe and colder countries have per capita consumption of 10 to 15 litres. We have always had our eye on creating a global brand,” Evans said.

Alongside South Africa, the company’s products also have presence in Zimbabwe, Mozambique, Namibia, and Mauritius. Earlier this year, the group started exporting into Belgium and Holland.

“You have to win your home games before you start playing your away games. It was important for us to demonstrate strong traction in South Africa, which we’ve done. So the time arrived to take on some of the attractive offshore markets,” he said.

In mid-2011, Invenfin, the venture capital division of the investment company Remgro and Sir Alex Ferguson, former manager of Manchester United, made investments in BOS Brands.

According to Euromonitor International, rising disposable incomes and the healthy image of ready-to-drink tea compared with many other types of soft drinks will ensure that the category continues to develop positively overall in South Africa.

“New launches, price promotions and other marketing activities will also help to sustain robust growth in total volume and constant value sales,” the research company said in a report.

Last year, Pioneer Foods was the leading player in ready-to-drink tea, claiming an off-trade volume share of 43% with the world-famous Lipton Ice Tea range.