Starbucks just partnered with an unlikely company to sell ready-to-drink tea called Teavana.
The coffee giant is working with beer provider Anheuser-Busch InBev to distribute the tea in the first half of 2017.
The Teavana product will debut in 300,000 stores that are part of the Ab InBev’s distribution network.
“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,” Starbucks CEO Howard Schultz said in a statement.
“We are excited to work with Anheuser-Busch to unlock the premium ready-to-drink market and further grow demand for the Teavana brand,” Shultz added.
Starbucks recently reported $1 billion of Teavana beverage sales at locations across the US, an 11% growth in year-over-year sales.
“We know… that there is a great demand for this product,” Schultz said on Thursday on a call with reporters.
According to Schultz, the popularity of tea, especially premium and iced tea, among young consumers indicates an opportunity to grow the category at a faster rate than coffee.
“We see an amazing opportunity in tea, when you look at tea on a global basis, but especially in the US,” said AB InBev CEO Carlos Brito.
Schultz indicated that the line of tea would be similar to Starbucks’ ready-to-drink bottled Frappuccino line, which the company launched in partnership with PepsiCo in 1996. Frappuccino and energy drinks sold through that partnership generate $1.5 billion each year in sales.
“Just think of it this way — throughout our stores, millions of customers every day have a chance to see our Teavana brand every day, [and to] taste it,” said Schultz.
Pepsi already owns the Lipton tea brand which likely explains why the soda giant isn’t distributing Teavana for Starbucks.