St. Louis-based Anheuser-Busch and Seattle-based Starbucks Corp. announced that they are working together to produce, bottle, distribute and market the first Teavana ready-to-drink (RTD) teas expected to launch in the United States in the first half of 2017.  

Premium RTD tea is the fastest-growing segment in the RTD tea category, which grew at a compound annual growth rate (CAGR) of 16 percent during the past five years and generates $1.1 billion in sales, according to New York-based Beverage Marketing Corporation.

Starbucks and Anheuser-Busch will bring together their strengths to capitalize on the growth opportunity, the companies say. Starbucks will contribute Teavana’s tea expertise, industry-leading retail activation and consumer-engagement capabilities, while Anheuser-Busch will lead production, bottling and distribution to retailers nationwide in partnership with its network of wholesalers, it adds.

The new RTD premium tea lineup will integrate the handcrafted nature and epicurean flavors drawn from Starbucks and Teavana’s retail favorites to offer consumers premium layered flavors, the company says.

“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, in a statement. “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.”

Anheuser-Busch InBev Chief Executive Officer Carlos Brito added: “This arrangement will bring together the strengths of two great companies, each with a long history of successful brand-building. 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, said: “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 each week.  The relationship will position 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, the companies say.