newsroom | Food and Beverage News | Wed, 08 Jun 2016 11:23:03 +0000
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 US, with an anticipated product launch in the first half of 2017.Â
Premium RTD tea is the fastest-growing segment in the RTD tea category, which grew at 16 percent CAGR over the past five years and generates $1.1 billion in sales. Together, Starbucks and Anheuser-Busch will bring their complementary strengths to bear to capitalize on the significant growth opportunity. Starbucks will contribute Teavanaâ€™s tea expertise, industry-leading retail activation, and consumer engagement capabilities, and Anheuser-Busch will lead production, bottling and distribution to retailers nationwide in partnership with its long-standing and well-established network of wholesalers.
Starbucks and Anheuser-Busch plan to introduce new Teavana RTD non-alcohol premium tea beverages across US channels. The new RTD product line will integrate the handcrafted nature and epicurean flavours drawn from Starbucks and Teavanaâ€™s retail favourites to offer consumers premium layered flavours. Starbucks retail stores nationwide serve premium, handcrafted Teavana brewed and iced teas, which is a high growth category at Starbucks. Within the past year, US Starbucks locations have sold more than $1 billion of handcrafted Teavana tea beverages, representing 11 percent growth in year-over-year sales.
â€œTea 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,â€ said Howard Schultz, chairman and chief executive officer, Starbucks. â€œWhen 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. We are excited to work with Anheuser-Busch to unlock the premium ready-to-drink market and further grow demand for the Teavana brand.â€
â€œThis arrangement will bring together the strengths of two great companies, each with a long history of successful brand-building,â€ said Carlos Brito, chief executive officer, Anheuser-Busch InBev. â€œStarbucksâ€™ expertise and leadership in premium tea, combined with our world-class production capabilities and strong US distribution footprint, will position this new product well in what is an exciting and growing category. We are delighted to be in a position to offer this great product to our wholesalers and believe, with their support, we are ideally structured to maximize the sales opportunity for Teavana RTD tea across the US.â€
Philip Mullin, chairman of the Anheuser-Busch Wholesaler Advisory Panel, added: â€œThroughout Anheuser-Buschâ€™s history, wholesalers have played a crucial role in the introduction of new products to the market. This arrangement with Starbucks comes at a very exciting time given the considerable growth in the premium RTD tea category, and I expect this news will energize wholesalers throughout our network.â€
According to the Tea Association of the US, 80 percent 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.Â This relationship positions Starbucks and Anheuser-Busch to claim market share in the more than $1 billion premium RTD tea category.
Anheuser-Busch and Starbucks expect to finalize definitive agreements by the second half of calendar year 2016.