Sweet leaf tea
In March 2010, Clayton Christopher announced to his employeesand all of the fans of sweet Leaf tea that he was leaving thecompany and handing leadership to an outsider, Dan Costello.Clayton’s final act was to send an email to his employees praisingtheir performance and integrity, which helped grow sweet leaf teato the number one ready to drink tea at whole foods. In his email,he wrote that after his departure he hoped: We will not sacrificethe magic of this brand and thus jeopardize the love affair we havecreated with our consumers in order to save a few dollars on ourpath up the mountain.
Tea Drinkers Heaven
The ready to drink tea market was consistently ranked as one ofthe fastest growing new product entries in the early twenty- firstcentury. In 2007 total sales if tea equaled $6.85 billion, almost athird od which were ready to drink ( RTD) or bottled tea. Tea ishigh in antioxidants, has health boosting properties and is eitherall natural or organic which might be the reason more people weremove from traditional carbonate drinks to healthy options likeSweet Leaf Tea . between 2003-and 2008 the RTD category grew by 65%. In the southern United States, tea has long been a popularbeverage choice. It is usually served cold and sweetened. It can befound in any restaurant, mom and pop store or at a road- side stop.From moonshine to big time Clayton Christopher and David Smith werealways fans of sweet tea and loved their Grandma’s recipe. But theycouldn’t find any good bottled tea that tasted as good as whatGrandma made. Their grandma made sweet tea by brewing teabagsfor3-4 minutes. Then she would pour that freshly brewed tea overice and add natural sugarcane to make it sweet. In 1997 theyfounded Sweet Leaf Tea ( SLT) to fill this void, and hoped thatothers would enjoy their Grandma’s recipe as much as they did.Initially their production and marketing more closely resembledthat of a moonshine producer than that of the multi Million- dollarbrand it today. They used giant crawfish pans to boil the water andpillowcase as giant tea bags to brew the tea. To distribution thebottled beverages they had an old fun down van. Clayton and Davidmoved Sweet leaf Tea from Beaumont to Austin, Texas after a coupleof years and started using an automated system to make the tea.But, they always remained true to their grandma’s recipe. SweetLeaf Tea’s only competitive advantage was its superior flavorcompared to other ready to drink teas like Arizona, Snapple,Lipton, and Nestea. In 2008 SLT had $12 million in revenue and wasavailable in 30 percent of the US market. In March 2009, NestleWaters purchase as third of Sweet Leaf Tea for $16.5 Million. Withlarge investment from Nestle waters also came a new president, DanCostello a former executive at Nestle Waters North America. Growingtheir brand Beverages tend to be low-involvement products, but alsoa unique in that everyone has a favorite drink, which make it verypersonal Sweet Leaf Tea had to find ways to develop a following ofcustomers
without a big advertising budget. They focused on sampling at musicFestivals, products placement on shows like MTV’s Real World andCBS’s big Brother as well as Making sure they had a clear brandpersonality. Clayton and David worked with Lyon Advertising tocreate a brand personality that would represent who they were, laidback and fun, but did not forget Clayton’s Grandma Mimi. SLT couldbuild a large fun base they needed people to try their product. Inan interview conducted by Inc. Magazine Clayton stated “ Samplingis the best form of marketing You’ve got to get the product pastpeople’s lips. In 2002 they started partnering with music festivalslike Austin City Limit ( ACL ) lollapalooza, South by south West(SXSW) and country Thunder. The folks attending the festivals werethirsty and willing to try new drinks. This also allowed then totarget their core target audience – young (25-45) laid back hip,and health conscious beverage drinkers. Initially, ninety percentof their advertising budget went to sampling (Inc). Focusing theirsampling program during music festivals allowed them to targetmasses of people at a time when they were thirsty such as the deadof summer in Texas, Chicago and Arizona. SLT realized very early,however , that they needed to be on store shelves if they wantedtheir customers to find and buy the product. Selling their productat a few music festivals a year wouldn’t be enough to keep them inbusiness. Their first major store partnership was with whole foods(WF) in 2002, which launched them on store shelves in the greaterTexas market. Adi Wilk, the former marketing manager at SLT statedthat the Whole Food Partnership “lifted the brand” in 2006 wholefood expanded the SLT market to all of their stores in the US.Along with the Whole Foods partnership they also found distributionthrough partnerships with 7-11 stores, placement in Texas schoolvending machines, and at army bases. This allowed fans that mayhave tried SLT at lollapalooza to find it in Chicago, or peoplethat traveled to Austin for ACL or SXSW to find it in New York attheir local whole Foods stores. SLT’s communication strategy hadtraditionally focused on connecting to their customers theirpartnership with WF, however, helped them grow the brand by beingon the shelves of national chain store and also helped them connectto other distributors. But more importantly was that SLT the builta strong connection with their customers, with most of them willingto search far and wide for a bottle for SLT. This truly helped thembecome a successful company. In 2008, with an infusion of moneyfrom Catterton partner, a Connecticut - based private equity firm,and Nestle Waters North America Inc, SLT had expanded theirmarketing beyond sampling and store partnerships. In 2009 they hadthree major advertising updates- 1) they launched a new website (2)hired a dedicated Twitter Write (3) and added a team of Facebookmanagers for the fan page. SLT empowered every employee to be aspokesperson for the brand- with even their receptionist talking acore part in their Twitter and Facebook posts.
Communications Role
Initially the core communication for Sweet Leaf Tea, was throughdirect to customer marketing at music festivals. The owners,Clayton and David, were at the Music Festivals handing out theirproduct. This allowed customers to meet the people behind thebeverage and link friendly faces to a good beverage. Also theassociation with music festivals may have helped the brand developthe Cool and Fun image they were pushing. Once SLT had expandedbeyond the central Texas market they needed to find a way to stayconnected to their customers and keep that direct to customercommunication active. The infusion of money from
both Catterton partners and Nestle waters allowed them to expandtheir communication strategy beyond music festivals and their corewebsite. Their Facebook fans matched the same target audience theyfirst had a t music festivals. Their blog, Facebook, and Twitterpages allowed them to continue that face to face communicationClayton and David started at the music festivals, but in thedigital world. Their Facebook and Twitter communication reflectedthe brand and the Culture of the Company. At the time, these twosites were used for announcement about the brand or to communicatespecial evet taking place during music festivals. As an exampleduring 2009 SXSW they also used Twitter to announce a free concertand used Facebook to get people to RSVP to the event. In one weekthey had 4,500 people registered on Facebook for the free concert.Another advertising advance SLT made in 2009 was using mobiletechnology to get consumers to search for their product and receivefree sample. SLT was one of the first companies to give away realsamples using Gowalla Gowalla was a location game that encouragedpeople to find a virtual item in a real-world place. Gowallaallowed then to use virtual sampling of a product and connect it toreal world sampling.
Questions :
1- What are the strength and weakness of SLT’s corporate Culturein the terms id communications, as described in the case ? 2-Considering the relationship the brand had with its audience,should Clayton have reached out to customers to announce he wasleaving ? 3- What challenges do you see for SLT’s new management ?4- What role should corporate communication paly at SLT to help thecompany advance its strategic goals? 5- As clayton’s replacementwould you change the way SLT communicated with its customers, orwho was allowed to ? why or why not ?
