Starbucks Corp. plans to roll out its new Fizzio handcrafted sodas to 3,000 units across the U.S. and in Asia this summer.
The new beverage line is the next weapon in Starbucks’ ongoing quest to build traffic during non-morning hours, Howard Schultz, the Seattle-based company’s chair, president and chief executive, said after announcing second-quarter results on Thursday.
Schultz described the drinks as “all natural, preservative-free alternatives to sugar-filled sodas with a theater of a custom handcrafted beverage that I am convinced will be a big hit with consumers and drive traffic and incrementally during the key afternoon daypart.”
After testing Fizzio in select markets last year, the company will launch the cold carbonated drinks in three flavors — ginger ale, spiced root beer and lemon ale — with more to come.
The new sodas, along with a more diverse Teavana tea platform, are expected to further enhance food attachments as Starbucks rolls out new lunch offerings this year — though specific items are still in test, and Alstead did not reveal what’s coming to the lunch
Reports have been circulating this week that Starbucks may be negotiating a deal to acquire a stake in Israel-based SodaStream, maker of home soda machines, but company officials did not address those reports.
Meanwhile, the chain is also rolling out its Evenings program, featuring beer and wine, along with more new food offerings. Alstead the program will likely be available at more than 1,000 units across the U.S. over the next few years.
The diversification of Starbucks menu has opened up new real estate opportunities, noted Schultz. As the chain meets the needs of customers during later dayparts, it will make more sense for the company to move into locations that are less morning-daypart focused.
Though Starbucks passed the 20,000th unit mark during the quarter and now operates in 64 countries, Schultz said some markets remain significantly “under stored,” including North America, China, Brazil and India.
This year the chain will focus on highly targeted retail store development, and drive thrus locations will add a new runway for growth, Schultz said. The company plans to open 1,500 locations in 2014, including 600 in the Americas.
In addition, the company’s new Teavana Tea Bar concepts, now open in New York and Seattle, will be expanded to Chicago, Los Angeles, and more New York locations in the months ahead.
Starbucks chief operating officer Troy Alstead noted the quarter’s “acute extreme weather,” which has dragged down results for many other public companies. At Starbucks, however, growth in food sales and increasing traffic offset the impact of weather disruptions, according to Alstead.
The 13,763 locations in the Americas region reported a same-store sales increase of 6 percent for the quarter, including 3-percent growth in average ticket and a 2-percent increase in traffic.
Alstead said about 2 percent of the same-store sales growth in the Americas was attributed to the chain’s new food offerings, including the La Boulange bakery items now in about 8,500 company-operated and licensed locations.
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