Starbucks and beer maker Anheuser-Busch are teaming up to produce a bottled version of the coffee company's Teavana tea.
But don't get too buzzed yet. The tea will be non-alcoholic.
The partnership represents a significant move as Starbucks aims to position itself as more than just a coffee company and expand its presence in grocery aisles. It will be the Seattle-based chain's first ready-to-drink tea product, and will start selling next year.
Anheuser-Busch will bottle, distribute and market the drinks. No word yet on flavors or whether the product will be in glass bottles like Starbucks' grocery aisle frappuccinos or in cans, like Budweiser. Starbucks partners with PepsiCo to distribute those bottled frappuccinos. CEO Howard Schultz said the company went to Anheuser-Busch for the Teavana launch because Pepsi already bottles and markets products for tea brand Lipton. Another factor is Anheuser's distribution network, which reaches more than 300,000 stores on a weekly basis. Bottled frappuccinos are distributed to more than 200,000 stores in the U.S.
"The values of the company coupled with the power of their distribution capability and the recognition that we're sitting on a category that globally is larger than coffee...there is a huge opportunity here," Schultz said on a call with media Thursday.
Starbucks acquired Teavana in 2012 and has since made it a bigger part of the menu. It sold more than $1 billion worth of Teavana tea as of the year ended March 27, an 11% increase over the same period last year.
Particularly as soda consumption has fallen, non-carbonated cold beverages like coffee, water and tea are picking up more fans. From 2014 to 2015, ready-to-drink tea volume grew 6.1%, according to Beverage Marketing Corp. Ready-to-drink coffee is still well ahead of that, with volume growing 16.5% in the same period.
Starbucks is determined to make tea drinkers out of its fans though, and said in January that it expects to grow Teavana into a $3 billion business over the next five years.
Though not all of Starbucks' efforts to steep customers in tea have been a success. In January, it announced plans to convert three Teavana tea bar locations it had started opening in 2013 into Starbucks stores instead, and close a fourth, choosing to focus on selling the tea through its own cafes.
