The Impact of Rebranding on Customer Brand Loyalty: A Case

Study of Nestea to Fuse Iced Tea in Canada

Kechen Liu

Economics Programs, University of Toronto Mississauga, 3359 Mississauga Rd, Mississauga, Canada

Keywords: Rebranding, Customer Brand Loyalty, Brand Perception, Brand Awareness, Brand Identity.

Abstract: The purpose of this case study was to evaluate how Coca-Cola’s rebranding of Nestea to Fuze Iced Tea in

Canada impacted consumer brand loyalty. An online survey of Canadian consumers, administered through

Google Forms, yielded 95 valid responses, which were analyzed using descriptive statistics in Google Forms

and Stata 18. The study was guided by Merrilees and Miller’s six principles of rebranding and brand loyalty

measures adapted from Keller and Zhang. Findings indicate a significant decline in overall brand loyalty

following the rebranding: respondents reported reduced brand preference, lower repurchase intentions, and

weaker brand advocacy for Fuze compared to its predecessor, Nestea. Participants also expressed

dissatisfaction with the rebranding, citing perceived taste changes, insufficient advertising, and inconsistent

brand communication as key issues affecting their loyalty to the new brand. These results underscore the need

for more robust communication and promotional strategies to maintain customer loyalty during future

rebranding initiatives.

1 INTRODUCTION

"Nestea" is a famous tea drink brand all across

Canada. Since 1991, Nestea has been manufactured

by Beverage Partners Worldwide, a joint venture

between Nestlé & The Coca-Cola Company. Nestea

has become the most popular tea drink across Canada

in the last three decades, however, this business

partnership ended in December 2024.

Coca-Cola Company announced that they will be

launching their own brand, which is the "Fuze iced

tea", as a rebranding process of Nestea. As the

company said, "For the last 30 years, Coca‑Cola has

produced and owned the recipe for Canada's best-

selling iced tea (Coca-Cola Canada, 2025)", for now,

Fuse iced tea will "Using this exact recipe to ensure

Canadians continue to enjoy that iconic iced tea

flavour they grew up with (Coca-Cola Canada,

2025)". On the other hand, not all the customers were

satisfied with Coca-Cola Company’s decision. Many

customers have announced their dissatisfaction

through social media.

Rebranding is a strategic marketing decision that

can significantly impact consumer perception, brand

equity, and loyalty. This article aims to study on the

https://orcid.org/0009-0000-7961-4037

rebranding of "Nestea" to "Fuze iced tea", such as the

process of the rebranding, the outcomes of the

rebranding, and the outcome of customer loyalty

change by analyzing survey data collected.

2 THEORETICAL

FOUNDATIONS

Rebranding is ubiquitous in branding practice.

Corporate rebranding, in its many facets of brand

renewal, refreshment, makeover, reinvention,

renaming and repositioning (Merrilees & Miller,

2008).

During the development of the brand, there are

two major research areas; "Corporate Branding"

refers to the initial establishment of a company's

brand, involving the systematic development and

promotion of its core values, brand image, and

communication strategies. However, the fundamental

distinction of "Corporate Rebranding" lies in its focus

on significant transformations in brand vision, rather

than merely adjusting brand communication methods.

Therefore, rebranding is not simply about changing a

334

Liu, K.

The Impact of Rebranding on Customer Brand Loyalty: A Case Study of Nestea to Fuse Iced Tea in Canada.

DOI: 10.5220/0013843900004719

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd International Conference on E-commerce and Modern Logistics (ICEML 2025), pages 334-338

ISBN: 978-989-758-775-7

company’s name or logo; it entails a comprehensive

transformation of the brand’s core values, market

positioning, and communication strategy (Merrilees

& Miller, 2008).

One research in 2008 points out that there’s six

principles which deliver the success outcome that

corporate rebranding should follow (Merrilees &

Miller, 2008):

Principle 1: Adjusting Brand Vision While

Balancing Core Values and Contemporary Market

Demands (Merrilees & Miller, 2008). A successful

brand must adapt to the evolving market environment

while preserving its fundamental principles to sustain

long-term competitiveness.

Principle 2: Ensuring Continuity with the Original

Brand (Merrilees & Miller, 2008). A complete

overhaul of the brand may disrupt brand recognition.

Therefore, it is crucial to retain certain core or

peripheral brand elements to ensure consumer

acceptance and familiarity with the rebranded

identity.

Principle 3: Addressing New Market Demands

Through Rebranding (Merrilees & Miller, 2008).

One of the primary objectives of corporate

rebranding is to attract new market segments or

consumer groups, thereby expanding the brand’s

overall influence and reach.

Principle 4: Internal Branding as a Key Factor for

Successful Rebranding (Merrilees & Miller, 2008).

Employees must recognize and support the new

brand identity. This requires comprehensive training,

effective internal communication, and corporate

culture development to ensure alignment with the

rebranding strategy.

Principle 5: Achieving Consistency Across the

Marketing Mix in Rebranding (Merrilees & Miller,

2008). All elements of the marketing mix—including

product, pricing, distribution channels, and

services—must align with the new brand identity to

maintain consistency in brand messaging and

consumer perception.

Principle 6: The Crucial Role of Brand Promotion

in Rebranding (Merrilees & Miller, 2008).

Enhancing brand awareness through advertising,

public relations, and social media is essential in

rebranding efforts. Additionally, alternative

promotional strategies, such as experiential

marketing, should be considered to reinforce

consumer engagement.

Brand loyalty is a complex concept that typically

requires both behavioral measurement methods and

psychological methods, such as commitment for

definition and evaluation. Following this concept,

Jacoby and Chestnut provided a classification of the

various approaches to measuring brand loyalty with

three broad groups (Knox & Walker, 2001).

Behavioral Measurement Approach, such as the

frequency consumer purchases a particular brand.

Psychological Commitment Measurement

Approach, such as the preference of consumer

purchases goods of a particular brand.

Composite Indices, such as Brand Insistence.

Brand Insistence integrates the behavioral index

of exclusive purchase with the out-of-stock decision,

where an alternative brand would only be considered

in emergency situations (Copeland, 1923).

Brand loyalty is crucial in determining a product’s

long-term success, as loyal customers contribute to

repeat purchases, positive word-of-mouth, and

overall brand equity (Rowley, 2005). However,

rebranding can disrupt consumer behavior,

potentially leading to customer retention issues or

new market opportunities (Knox & Walker, 2001).

This study examines the extent to which Nestea’s

brand loyalty carried over to Fuze Iced Tea and

whether consumers’ perceptions changed after the

transition based survey questions related to the above

three classes.

3 METHODOLOGY

This study employs a survey as the primary research

method. The questionnaire is distributed online using

Google Form as the tool for creation. Respondents

complete the survey using electronic devices such as

mobile phones and computers.

The questionnaire covers two key research

themes:

Assessment based on the six rebranding

principles, which serves as the analytical framework

for evaluating this rebranding event.

Consumer loyalty before and after the rebranding

event, aimed at measuring the impact of rebranding

on brand loyalty.

This study adopts the snowball sampling method

due to its low cost and ease of implementation. This

research aims to recruit a cross-sectional sample of

consumers who are familiar with or have experience

with the Nestea brand.

The questionnaire design consists of four

sections: Basic demographic informations, Screening

questions, Core research questions, Attention

questions.

Both research themes will be integrated into a

single questionnaire.

To refine the questionnaire, a pilot test with 30

respondents will be conducted. Based on the

The Impact of Rebranding on Customer Brand Loyalty: A Case Study of Nestea to Fuse Iced Tea in Canada

335

feedback, necessary modifications and adjustments

will be made to address potential issues such as

ambiguities or unclear wording in the survey

questions.

This article argues the consumer loyalty before

and after the particular rebranding event, which is the

rebrand of "Nestea". Research on customer loyalty of

rebranding is fresh and has not yet developed a

mature scale or measurement method. Keller (2001)

proposed a measurement approach that includes four

items from both behavioral and attitudinal

perspectives to evaluate brand loyalty. Therefore, this

study adopts the behavior-attitude composite

measurement method as a reference. Table 1)

describes the distribution of the question applied to

each section.

Table 1: Items included in the questionnaire

Question Purpose Question Number Question Reference

Gender information

Your prefered gender (N/A)

Scale of Popularity

Q2 & Q3 Have you ever bought the Brand? (N/A)

Purchase Frequency

Q4 & Q5

Was the Brand your primary

choice of tea-like drinks?

(N/A)

Preference

Q6 Which Brand do you prefer? (N/A)

Attitudinal Brand

Loyalty

Q7 & Q8

I wish I can purchase the Brand

in a long period.

(Kellerz, 2001)

and

(Zhang, 2022)

Q9 & Q10

The Brand does not have a

satisfactory replacement for me.

Q11 & Q12

If the Brand were discontinued, I

would need to spend a significant

amount of time to accept a new brand

as a replacement.

Behavioral Brand

Loyalty

Q13 & Q14

I would like to repurchase the

Brand if it were still available.

(Kellerz, 2001)

and

(Zhang, 2022)

Q15 & Q16

I would like to recommend the

Brand to others.

Q17 & Q18 I support the Brand

Rebranding process and

result Question

Q20 & Q21

What changes makes you feel

dissatisfied and satisfied during

Rebranding?

(McMullan &

Gilmore, 2008)

and

(Leninkumar,

2017)

and

(Gee, Coates, &

Nicholson, 2008)

Q22

Has your purchase frequency of

this drink changed after Rebranding?

Q23

Do you feel satisfied with this

Rebranding?

Q24

What is the frequency you

receive the new Brand’s

advertisement?

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4 ANALYSIS AND DISCUSSION

Based on the previous results, several conclusions can

be drawn. Although "Fuze Iced Tea" was launched

and officially replaced the original "Nestea" on

December 31, 2024 (Coca-Cola Canada, 2025), many

former "Nestea" customers remain unaware of the

new brand. While 97.9% of respondents had

previously purchased "Nestea", only 56.8% reported

purchasing "Fuze Iced Tea". This gap may be

attributed to an ineffective advertising strategy for

"Fuze Iced Tea", although they have launched sales

plans such as free sample tryout (Coca-Cola Canada,

2025), however, 26.1% of respondents stated they

had never seen any advertisements for the brand, and

46.7% reported they only see it once or twice per

week. This phenomenon suggests that special

attention should be given to marketing and

promotional strategies before and after rebranding to

prevent potential customer loss.

In general, "Nestea" indicate high attitudinal

brand loyalty, with long-term purchase intention of

49.5%, perceived lack of satisfactory replacement of

41.1%, and resistance to brand transition of 37.9, as a

substantial portion of consumers are emotionally

committed, view it as irreplaceable, and show

reluctance to switch brands. In contrast, Fuze Iced

Tea exhibits significantly lower brand loyalty, with

the same three parameters dropping to 10.5%, 14.7%,

and 16.8%, respectively. This decline suggests that

the rebranding failed to cultivate strong emotional

attachment among consumers, leading to weaker

brand retention and lower consumer commitment.

Similar shifts resulted in behavioral brand loyalty.

For "Nestea", 92.5% of respondents expressed a

willingness to repurchase the brand if it remained

available; additionally, 84% of respondents indicated

they would recommend "Nestea" to others;

furthermore, 84.9% of respondents stated they would

actively support "Nestea" as customers. These results

suggest that "Nestea" enjoys customer groups with

strong behavioral loyalty, strong repeat purchase

willingness, strong recommendation willingness, and

continued brand advocacy.

In contrast, "Fuze Iced Tea" experienced a

significant decline in behavioral loyalty. Only 44.2%

of respondents expressed a willingness to repurchase,

only 24.7% of respondents indicated they would

recommend "Fuze Iced Tea" to others. Additionally,

28.3% of respondents stated they would support the

brand as customers, while 71.7% would not. These

results indicate that "Fuze Iced Tea" has failed to

retain a high level of customer loyalty performance in

"Nestea", as most respondents lack strong purchase

alternatives and are unwilling to support the brand.

The declined customer loyalty might cause the

decreasing amount of purchasement. Although Coca-

Cola has not yet published the sales amount of "Fuze

Iced Tea" across Canada in the first season of 2025,

however, this study’s result has indicated 52.6% of

survey respondents report they decline their purchase

frequency of this beverage, suggesting a possible

correlation between declining customer loyalty and

future sales performance.

Based on the previous results, it is evident that

majority dissatisfaction comes from the

"Taste/flavour" issue after the rebranding. However,

Coca-Cola has assured consumers that the recipe

remains unchanged (Coca-Cola Canada, 2025). One

possible explanation for this discrepancy is that

customers were not adequately informed about the

recipe continuity. Many consumers may perceive the

taste differently due to a strong psychological bias,

associating that "Fuze Iced Tea" is an entirely new

brand on the market rather than a continuation of

"Nestea". This assumption is further supported by the

lack of effective advertising for "Fuze Iced Tea". As

highlighted in previous discussion, consumers have a

relatively low level of exposure to advertisements

related to rebranding is a significant proof reflected in

this situation.

Lastly, the differing attitudes toward the new

brand’s pricing strategy, as discussed in the previous

results section, may indicate that "Fuze Iced Tea"

lacks strong market pricing control over its retailers.

This inconsistency has led to floating costs for

consumers, which might cause market confusion.

Overall, these findings highlight the challenges of

rebranding a well-established product.

5 CONCLUSIONS

This study examined the impact of rebranding

"Nestea" to "Fuze Iced Tea" on customer brand

loyalty in Canada. The findings indicate that the

rebranding effort faced significant challenges in

retaining brand loyalty.

The analysis revealed that "Nestea"maintained

strong brand loyalty, with a high percentage of

consumers expressing long-term purchase intentions,

emotional attachment, and resistance to switching

brands. In contrast, "Fuze Iced Tea" struggled to

generate the same level of consumer commitment, as

reflected in its significantly lower repurchase

intention, brand advocacy, and customer support.

The Impact of Rebranding on Customer Brand Loyalty: A Case Study of Nestea to Fuse Iced Tea in Canada

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Furthermore, despite Coca-Cola Canada's efforts

to maintain the original recipe and introduce new

flavors, dissatisfaction with marketing strategy, lack

of retail pricing control and lack of advertising

exposure build up to the decline in consumer

acceptance.

Overall, this article examines the real-world case

of Nestea's rebranding to Fuze Iced Tea in Canada

and explores the complex challenges associated with

rebranding a well-established product. This article

states consumer perception of brand identity,

advertising effectiveness, emotional attachment and

efficient advertisement play a crucial role in

maintaining brand loyalty. Future rebranding

strategies should prioritize strong communication

efforts and enhanced promotional engagement to

mitigate the risks associated with brand transitions.

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