Starbucks is betting bubbles will give sales some sparkle

• Starbuck is testing new carbonated versions of its popular refresher drinks in select markets.
• Non-coffee drinks are playing a key role in Starbucks growth, especially among younger customers.
• The company said its refreshers line is delivering double-digit year-over-year growth.

Starbucks CEO Brian Niccol is ready for some fizz.

The company is testing a carbonated version of its Refreshers, which are iced juice and tea drinks often mixed with fruit pieces, that have become one of Starbucks’ biggest beverage businesses since launching in 2012.

“I’m really excited that we’re getting ready to go test sparkling. We’re calling it Spritzers,” he told investors on the company’s third quarter earnings call Wednesday. The company delivered net sales of $9.3 billion for the period, with global comparable sales growth of 7.9%.

Of course, sparkling drinks have been a fast food chain staple since the beginning of the industry. After all, what’s a Big Mac without a Coke?

But lest you think the Seattle coffee giant is apparently just now getting the memo on soda, Niccol says his baristas are taking a distinctive approach to bubbles.

“Our team does a great job on getting to the delicious flavors that are relevant for the customer. So it’s been a really strong platform for us, and over the last quarter, really continued to perform,” he said.

Starting this week, the company said it was testing out the spritz concept at about 100 stores in Austin, San Antonio, and St. Louis.

The category expansion for Starbucks follows new Energy refreshers and Blended refreshers options rolled out earlier this summer. It also comes after nearly two years of a Niccol-led focus on fundamentals, like craft coffee and quicker, friendlier service.

One goal of the change is to increase business during the afternoon, once the morning coffee rush has subsided. The non-coffee flavors also help attract younger customers to the brand.

The sparkling flavor lineup includes a coffee and citrus combo, a peach and passion fruit tea, and a strawberry matcha mashup.

“It’s been a platform, frankly, that we kind of got a little complacent on in the past, and now we are reinvigorating,” Niccol said on the earnings call. “Whether it’s fully decaffeinated or whether it’s fully boosted, those are the different occasions that people want Refreshers, whether it’s in the morning or the afternoon, and whether you’re young or old, the platform is resonating.”

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