Starbucks and AB-InBev to launch RTD tea in U.S. in 2017
Beer, tea or me? The old chat-up line comes to mind when commenting on AB-InBev’s latest venture: a tie-up with Starbucks, which will see the major brewer in the U.S. produce, bottle and distribute a ready-to-drink (RTD) line of Starbucks’ Teavana brand tea in the United States. This was announced on 2 June 2016.
The move will help Starbucks broaden its reach beyond coffee, while it will allow AB-InBev to fill capacity at breweries and give its network of more than 500 distributors a non-alcoholic beverage to sell.
RTD tea is one of the fastest-growing beverage categories in the U.S., with consumption rising by 6.1 percent in 2015, according to data service firm Beverage Marketing Corp.
AB-InBev’s CEO Carlos Brito said that Starbucks stores would develop new tea flavours, and AB-InBev would produce those flavours at one of its dozen U.S. breweries which would then be sold across some 300,000 convenience stores and supermarkets through its distributor network.
Starbucks had sought out AB-InBev because its partnership with PepsiCo, through which it sells RTD coffee, would not allow it to do tea as well. PepsiCo is bound to Unilever for the Lipton, Pure Leaf and Brisk brands.
Starbucks in 2012 bought Atlanta-based tea retailer Teavana for USD 620 million in cash, its biggest-ever acquisition. It said at the time that it would try to bring a Starbucks-like experience to Teavana, a mall retailer with 350 stores that sold most of its tea in loose-leaf form for home consumption.
In the past year Starbucks sold more than USD 1 billion worth of Teavana tea beverages at its 12,500 U.S. stores, representing 11 percent growth in year-over-year sales.
In recent years, Starbucks has increasingly been moving into supermarkets and convenience stores with packaged products in an effort to broaden its reach and reduce its reliance on its cafes, which also have begun selling more food and non-coffee beverages.
Starbucks had a 75 percent share of the USD 3.59 billion U.S. RTD coffee market last year, according to Euromonitor. Its partner, PepsiCo, had an industry-leading 29 percent share of the USD 7.57 billion U.S. RTD tea market in 2015, according to Euromonitor.
