Starbucks Targets Lunch Sales With Handmade Fizzio Sodas

Starbucks Corp. (SBUX), pursuing its expansion beyond coffee to attract customers at different times of the day, will sell handmade sodas in some U.S. stores to boost afternoon sales.

Sodas under the name Fizzio, in flavors including spiced root beer, will be made behind the counter with syrup and a carbonation machine. They will go on sale starting tomorrow in about 3,500 Starbucks cafes in the southern U.S., Cliff Burrows, president of the Americas region, said in a phone interview.

Starbucks is also revamping its lunch sandwiches and testing new grilled cheese and beef brisket baguettes. The Seattle-based coffee chain is targeting the lunch crowd as more competitors encroach on the breakfast business -- Taco Bell sells waffle tacos and sausage burritos nationwide, and Dunkin’ Donuts has a chicken-apple sandwich.

Fizzio sodas take about 90 seconds to make -- the same as a frappuccino or smoothie, according to Burrows.

“This is the perfect complement to what we’ve done with our lunch program with foods,” Burrows said. While Starbucks already sells bottled sodas, customers wanted more refreshing drinks, he said.

The Fizzio machines were designed to be used in stores and there’s no plan to sell them to customers, Burrows said.

Photographer: Sanjit Das/Bloomberg

Starbucks Corp. is targeting the lunch crowd as more competitors encroach on the breakfast business -- Taco Bell sells waffle tacos and sausage burritos nationwide, and Dunkin’ Donuts has a chicken-apple sandwich. Close

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Photographer: Sanjit Das/Bloomberg

Starbucks Corp. is targeting the lunch crowd as more competitors encroach on the breakfast business -- Taco Bell sells waffle tacos and sausage burritos nationwide, and Dunkin’ Donuts has a chicken-apple sandwich.

Prices will vary by market. A medium-sized Fizzio soda will cost $2.95 in Los Angeles and by this time next year the sodas will be in all U.S. stores, Burrows said. The chain has about 11,600 locations nationwide.

Starbucks, which also sells Evolution Fresh juice, La Boulange pastries and Teavana tea, said last week it would raise the prices in its cafes and for Starbucks-branded coffees sold in grocery stores after a drought in Brazil pushed up the cost of the commodity.

The shares rose 0.2 percent to $76.73 at the close in New York. They have lost 2.1 percent this year, while the Standard & Poor’s 500 Index has gained 6.2 percent.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net Kevin Orland, John Lear

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