- Anheuser-Busch InBev and Starbucks Corp. announced on Thursday a partnership for a new RTD line of Starbucks' Teavana brand, which AB InBev will manufacture and distribute in the U.S.
- RTD tea production will enable AB InBev to better fill capacity at its breweries, as U.S. beer volumes decline. Also, it expands the nonalcoholic beverage portfolio offered by its network of more than 500 distributors.
- Starbucks will develop the new tea flavors in its stores, and AB InBev will produce the flavors at its U.S. breweries and sell them to approximately 300,000 convenience stores and supermarkets, AB InBev CEO Carlos Brito said on a media call.
PepsiCo has produced Starbucks' RTD coffee line as part of a joint venture since 1994. However, tea was not an option because PepsiCo has a joint venture with Unilever for Lipton, Pure Leaf, and Brisk.
Another appealing factor about AB InBev is that its distributors reach about 100,000 more stores than PepsiCo's RTD coffee Starbucks venture.
That kind of widespread reach will be key for AB InBev and Starbucks in capitalizing on the fast-growing RTD tea category, which saw U.S. consumption rise 6.1% last year, according to Beverage Marketing Corp. PepsiCo sits comfortably atop the industry with a 29% share of the $7.57 billion U.S. RTD tea market in 2015, according to Euromonitor.
As sales for beer or other products fall domestically, partnerships with food and beverage retailers could offer additional revenue potential.