Starbucks moves Tazo tea out of its shops

Fri Jan 9, 2015 6:25pm EST
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By Lisa Baertlein

LOS ANGELES (Reuters) - Starbucks Corp (SBUX.O: Quote) this week began selling its Tazo tea products exclusively in non-Starbucks retailers, a company spokeswoman said on Friday.

The world's biggest coffee chain on Tuesday replaced Tazo tea in its outlets with products from Teavana, the U.S. retail tea chain it bought for $620 million in 2012.

Starbucks will continue to sell Tazo products in grocery stores, big-box retailers such as Target and Wal-Mart, as well as natural foods market such as Whole Foods (WFM.O: Quote), Starbucks spokeswoman Alisa Martinez said.

Starbucks bought Tazo for $8.1 million in 1999. Current sales were not immediately available, but Starbucks said in 2012 that the business brought in more than $1 billion in annual sales.

Starbucks has increased its focus on tea as the popularity of that drink increases in the United States. Starbucks is also rapidly building shops in tea-drinking countries such as China.

At its annual investor conference in December, Starbucks said that tea as a percentage of Starbucks U.S. retail sales had grown from less than 8 percent in fiscal 2009 to 10 percent in recent quarters.

(Additional reporting by Bill Rigby)

A Starbucks store is seen in New York January 24, 2014. REUTERS/Eric Thayer