New Teavana premium Ready-to-Drink line of teas will capitalize on fast-growing, multi billion-dollar ready-to-drink tea category*
ST. LOUIS and SEATTLE; June 2, 2016 – Anheuser-Busch and Starbucks (NASDAQ: SBUX) today announced that they are working together to produce, bottle, distribute and market the first Teavana Ready-to-Drink (RTD) tea in the U.S., with an anticipated product launch in the first half of 2017.
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 Teavana’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 U.S. channels. The new RTD product line will integrate the handcrafted nature and epicurean flavors drawn from Starbucks and Teavana’s retail favorites to offer consumers premium layered flavors. Starbucks retail stores nationwide serve premium, handcrafted Teavana brewed and iced teas, which is a high growth category at Starbucks. Within the past year, U.S. Starbucks locations have sold more than $1 billion of handcrafted Teavana tea beverages, representing 11 percent 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 chief executive officer, 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. We are excited to work with Anheuser-Busch to unlock the premium ready-to-drink market and further grow demand for the Teavana brand.”
“This arrangement will bring together the strengths of two great companies, each with a long history of successful brand-building,” said Carlos Brito, chief executive officer, 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. 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.”
Philip Mullin, chairman of the Anheuser-Busch Wholesaler Advisory Panel, added: “Throughout Anheuser-Busch’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.”
According to the Tea Association of the U.S., 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. This relationship positions Starbucks and Anheuser-Busch to claim market share in the more than $1 billion premium RTD tea category.*
Following today’s announcement, Anheuser-Busch and Starbucks expect to finalize definitive agreements by the second half of calendar year 2016.
*Euromonitor International Soft Drinks in the U.S. study published March 2015
**Beverage Marketing Corporation report September 2014
***Based on net sales of handcrafted Teavana tea beverages from Q2 FY15 to Q2 FY16 in Starbucks U.S. retail stores
For more than 160 years, Anheuser-Busch and its world-class brewmasters have carried on a legacy of brewing America’s most-popular beers. Starting with the finest ingredients sourced from Anheuser-Busch’s family of growers, every batch is crafted using the same exacting standards and time-honored traditions passed down through generations of proud Anheuser-Busch brewmasters and employees. Best known for its fine American-style lagers, Budweiser and Bud Light, the company’s beers lead numerous beer segments. Budweiser and Bud Light Lime Lime-A-Rita were named Brands of the Year for the Beer and the Spirits, Malt Beverages and Wine categories, respectively, by Ace Metrix® in 2014.
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with more than 23,000 stores around the globe, Starbucks is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit our stores or online at news.starbucks.com and Starbucks.com.
Teavana offers high-quality teas and a unique in-store experience to new tea drinkers and tea connoisseurs alike. Acquired by Starbucks (NASDAQ:SBUX) in 2012, Teavana immerses customers in a full tea experience where they can learn more about the ritual and enjoyment of tea with products available in more than 350 Teavana specialty store locations, www.Teavana.com, as well as in Starbucks stores across the U.S. and Canada.
Forward Looking Statement – Starbucks
Certain statements contained herein are not based on historical fact and are "forward-looking statements" within the meaning of the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as "anticipate," "believe," "could," "estimate," "expect," "feel," "forecast," "intend," "may," "plan," "potential," "project," "should," "will," "would," and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are based on information available to Starbucks as of the date hereof, and Starbucks actual results or performance could differ materially from those stated or implied, due to risks and uncertainties associated with its business. These risks and uncertainties include: fluctuations in U.S. and international economies and currencies, our ability to preserve, grow and leverage our brands, potential negative effects of material breaches of our information technology systems to the extent we experience a material breach, potential negative effects of incidents involving food-borne illnesses, food tampering, food contamination or mislabeling, material failures of our information technology systems, costs associated with, and the successful execution of, the company’s initiatives and plans, including the launch of TeavanaRTD tea, the acceptance of the company’s products by our customers, including Teavana RTD tea, the impact of competition, coffee, dairy and other raw material prices and availability, the effect of legal proceedings, and other risks detailed in the company filings with the Securities and Exchange Commission, including the “Risk Factors” section of Starbucks Annual Report on Form 10-K for the fiscal year ended September 27, 2015. The company assumes no obligation to update any of these forward-looking statements.
Forward-Looking Statement – Anheuser-Busch
This release contains certain forward-looking statements reflecting the current views of the management of Anheuser-Busch InBev with respect to, among other things, Anheuser-Busch InBev’s strategic objectives. These statements involve risks and uncertainties. The ability of Anheuser-Busch InBev to achieve these objectives is dependent on many factors some of which may be outside of management’s control. By their nature, forward-looking statements involve risk and uncertainty because they reflect Anheuser-Busch InBev’s current expectations and assumptions as to future events and circumstances that may not prove accurate. The actual results could differ materially from those anticipated in the forward-looking statements for many reasons including the risks described under Item 3.D of Anheuser-Busch InBev’s Annual Report on Form 20-F filed with the US Securities and Exchange Commission on 14 March 2016. Anheuser-Busch InBev cannot assure you that the future results, level of activity, performance or achievements of Anheuser-Busch InBev will meet the expectations reflected in the forward-looking statements. Anheuser-Busch InBev disclaims any obligation to update any of these statements after the date of this release.
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