Q: What do you get when you combine the nation’s biggest beer and coffee makers — Anheuser-Busch InBev NV and Starbucks Corp.?
A: Bottled tea, apparently.
Anheuser-Busch and Starbucks announced on June 2 that they are working together to produce bottled, ready-to-drink teas from the loose leaf tea brand and retail chain, Teavanna. The drinks are expected to hit grocery stores in the early half of 2017.
“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 chief executive officer of Starbucks, as reported on the press release.
"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," Schultz continued. "We are excited to work with Anheuser-Busch to unlock the premium ready-to-drink market and further grow demand for the Teavana brand."
Carlos Brito, chief executive officer of Anheuser-Busch InBev, explained that the collaboration will align the strengths of both companies, leveraging their capabilities and renowned brands.
"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," Brito said. "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 U.S."
Even though Starbucks is most well known for its coffee, Schultz notes that Starbucks had already sold more than $1 billion of Teavana brewed and ice teas over the past year — an 11% increase over the previous year.
Additionally, the Tea Association of the U.S. reports that 80% of tea consumed in America is iced tea, with Americans drinking 800 million cups of tea per week. This relationship positions Starbucks and Anheuser-Busch to claim market share in the more than $1 billion premium RTD tea category.
Agreements between Anheuser-Busch and Starbucks are expected to finalize by the second half of the 2016 calendar year.