Up Front: Something Special is Brewing

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By Dan Bolton

Now that it has guzzled SABMiller, Anheuser-Busch InBev (ABI) is the world’s largest and the first truly global beer company.

In the coming weeks regulators will force ABI to sell some of its US stake in Miller, Molson, or Coors but the Belgian conglomerate will still have a dominate 45% share of the US market.

Now it’s time for tea.

There are thousands of beverage brands but only three or four trucks a day to deliver to stores all that soda, juice, beer, bottled water, tea, and coffee.

Coca-Cola (Honest Tea) owns one of those desirable delivery slots and PepsiCo (Lipton) owns another.

In a surprising and brilliant move for specialty tea, ABI announced that it will partner with Starbucks to brew and deliver bottled Teavana on trucks owned by its network of 500 distributors. The new teas will be available in early 2017.

InBev delivers to nearly 300,000 convenience stores and grocers from sea to shining sea. This partnership will introduce specialty tea to millions of consumers in highly visible retail establishments that people visit two and three times a week.

As an alternate to Lipton, Snapple, and Arizona’s sugary-sweet flavored, preserved and artificially colored offerings — sales of specialty will soar.

Starting in 1992 Arizona Beverages’ canned teas became the highest volume tea in convenience largely because the company founders were distributors. The significance to the tea industry is the immense power of convenience. Teas that are hard to brew such as oolong, which currently represents only 2% of global tea sales, make up an important number of Teavana’s selections.

Teas such as bottled puerh, offered by Numi Teas for the past five years, are delicious, healthful, and practically impossible to find in grocery stores due to limited distribution. The same can be said of highly regarded bottled tea lines from The Republic of Tea and a new line of bottled teas from Harney & Sons.

Critical to a distributor’s success is the ability to fill each delivery truck as soda and beer sales decline.

To insure that smaller and independent distributors thrive special conditions were imposed that limit ABI from distributing more than 10% of its own products.

Since few independent beers are distributed nationally this could lead to unused space on ABI’s delivery trucks. By brewing and bottling Teavana at Budweiser’s 11 regional breweries its delivery trucks will arrive with full loads.

“Just think of it this way – throughout our stores, millions of customers will have a chance to see our Teavana brand every day, [and to] taste it,” said Starbucks c.e.o. Howard Schultz.

“We see an amazing opportunity for tea,” added ABI c.e.o. Carlos Brito.