Tasty or Absurdi-Tea? Molson Coors to Brew Tea-Flavored Beer

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Coors light"Bartender, there's tea in my beer."

Molson Coors Brewing (TAP) is introducing Coors Light Iced T next month. The beverage will be sold in aluminum cans similar to its existing beer offerings, and rightfully so. Despite the "iced tea" implied by its moniker, this citrus-like brew will pack a roughly 4% alcohol punch.

It's an intriguing move by Molson Coors, but specialty flavored brews are booming in popularity. Tea is also as hot as ever, going by the success that Starbucks (SBUX) has had with Tazo and the fast-growing retail success of Teavana (TEA), an upscale mall concept that specializes in loose teas.

Even smoothie giant Jamba (JMBA) is getting into the mix with last month's acquisition of Talbott Teas.

Tea for Two-Drink Minimum

This obviously isn't the first time that tea -- in name, at least -- has been spiked for consumption. Ask a bartender for a Long Island iced tea, and you will get an alcoholic drink that tastes something like tea, even if it's typically not made with tea at all.

Order a John Daly, and you'll get a mixed drink consisting of lemonade, sweet tea, and vodka. Samuel Adams parent Boston Beer (SAM) recently introduced Twisted Tea, a hard iced tea beverage.

Coors Light Iced T is being described as "iced tea-flavored beer" with no caffeine. In other words, it won't be real tea. However, fans of both beer and iced tea -- and they're out there, somewhere -- are bound to crack open a can to see if the brewer behind Molson Canadian, Blue Moon, Keystone, and Coors can pull this one off.

You'll Have to Cross the Border for a Can

Molson Coors isn't ready to roll out Coors Light Iced T in this country just yet. The initial rollout next month will be in Canada. If things go well there, a stateside introduction will follow.

The company could use the spark. Net sales may have risen 8% last year, but that was entirely the handiwork of higher beer prices. Worldwide beer sales by volume actually declined by 0.7% in 2011.

"Someone else is eating our lunch in the alcohol space," the company's CEO told analysts earlier this week, as retold by The Wall Street Journal.

Well, if lunch is the problem, then tea -- one way or another -- may at least be the beginning of the solution.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article, except for Jamba. The Motley Fool owns shares of Starbucks and Boston Beer. Motley Fool newsletter services have recommended buying shares of Boston Beer, Starbucks, and Molson Coors Brewing. Motley Fool newsletter services have recommended writing covered calls on Starbucks.



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