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PepsiCo and Starbucks partner to launch energy drink

Starbucks is launching a branded energy drink called Baya through its partnership with PepsiCo, according to a press release from the coffee chain. The 12-ounce ready-to-drink cans of liquid energy will come in three fruity flavors: Mango Guava, Raspberry Lime and Pineapple Passionfruit.

Each 90-calorie can will have 160 mg of caffeine and will retail for $2.89. Currently, these energy beverages are available in U.S. grocery stores, national retailers, convenience stores and gas stations as well as online grocery marketplaces. Beginning March 1, customers can also purchase Starbucks Baya Energy at Starbucks stores in the U.S.

Starbucks and PepsiCo have long been partners in developing ready-to-drink beverages. Since 1994, the two corporations have worked under the umbrella of the North American Coffee Partnership (NACP) to develop and distribute beverages like the bottled Starbucks Frappuccino. Their success has been staggering, and the partnership is now responsible for 80% of sales in the RTD coffee category, according to IRI data cited by Starbucks. Baya is the first time that the duo has stepped into energy drinks.

However, while Starbucks is new to the segment, PepsiCo is familiar with dreaming up energy beverages. The soda conglomerate has previously teamed up with Bang energy to be the brand's exclusive distributor until October 2023, purchased Rockstar in 2020 for $3.85 billion and, most recently, it launched its own re-branded line of energy drinks called Mtn Dew Energy. Looking at the popularity of these beverages, it is no surprise that the beverage giant wants to move deeper into the energy drink space.

In the nonalcoholic beverage space, energy drinks are performing strongly. In 2020, sales rose 9.2%, an increase of 37.4% from 2015, according to Mintel data cited by Starbucks. Not only are people looking for energy widely purchasing these beverages, but often these RTD options come with additional functional benefits to appeal to consumers who are progressively searching for their drinks to do more than just hydrate.

Baya is playing to consumers who are interested in functional beverages. The new energy beverage is loaded with caffeine that is naturally found in coffee fruit as well as antioxidant vitamin C for immune support.

This entrance into a new category is complemented by Starbucks’ launch of a slew of new products this year containing oat milk. Thanks to the popularity of this plant-based milk and Starbucks’ commitment to reducing its carbon emissions by 50% by 2030 — in part through expanding plant-based menu choices around the world — the coffee chain is launching versions of its cold brew and Frappuccinos with oat milk.