The two companies are joining forces to brew bottled Teavana tea
Anheuser-Busch and Starbucks announced that they are working together to produce, bottle, distribute and market the first Teavana Ready-to-Drink (RTD) tea in the United States, with an anticipated product launch in the first half of 2017.
According to a Beverage Marketing Corporation report, premium RTD tea is the fastest-growing segment in the RTD tea category, which grew at 16% CAGR over the past five years and generates $1.1 billion in sales. Starbucks will contribute Teavana’s tea expertise, retail activation and consumer engagement capabilities, and Anheuser-Busch will lead production, bottling and distribution to retailers nationwide.
Starbucks and Anheuser-Busch plan to introduce new Teavana RTD non-alcohol premium tea beverages across U.S. channels. Within the past year, U.S. Starbucks locations have sold more than $1 billion of handcrafted Teavana tea beverages, representing 11% growth in year-over-year sales.
“Tea has been an important part of Starbucks heritage since we opened our doors as Starbucks Coffee, Tea and Spices in the Pike Place Market in 1971,” said Howard Schultz, chairman and CEO of Starbucks. “When we acquired Teavana in 2012, we saw a unique opportunity to do for tea what Starbucks has done for coffee and expand the Teavana brand across many customer experiences and products.
“This arrangement will bring together the strengths of two great companies, each with a long history of successful brand-building,” said Carlos Brito, CEO of Anheuser-Busch InBev. “Starbucks’ expertise and leadership in premium tea, combined with our world-class production capabilities and strong U.S. distribution footprint, will position this new product well in what is an exciting and growing category.”
According to the Tea Association of the U.S., 80% of tea consumed in America is iced tea and tea overall has a global category size of $125 billion, with Americans drinking 800 million cups of tea per week.
For more on tea’s performance in the convenience channel and other category data, check out the NACS State of the Industry Report, released in late June.