Starbucks bets bubbles can revive afternoon sales slump

Starbucks CEO Brian Niccol is testing carbonated Refreshers to boost afternoon traffic and attract younger drinkers.

The company is rolling out a sparkling version of its Refreshers line – iced tea and juice drinks that have become one of Starbucks' biggest beverage categories since 2012. Niccol told investors on the company's fiscal third-quarter earnings call that the new product, called Spritzers, will launch as a test in about 100 stores across Austin, San Antonio, and St. Louis starting this week.

"I'm really excited that we're getting ready to go test sparkling. We're calling it Spritzers," Niccol said.

The test follows earlier additions to the Refreshers lineup this summer, including Energy Refreshers and Blended Refreshers. The push comes as Niccol nears two years leading the company, during which he has focused on craft coffee and faster service.

One goal of the sparkling expansion is to increase sales during the afternoon, after the morning coffee rush fades. The non-coffee flavors also help Starbucks court younger customers who may not drink coffee.

"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. "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."

Starbucks delivered net sales of $9.3 billion for the quarter, with global comparable sales growth of 7.9%.

The sparkling flavor lineup includes a coffee and citrus combo, a peach and passion fruit tea, and a strawberry matcha mashup. Niccol said the company's team has focused on "getting to the delicious flavors that are relevant for the customer."

The company's Alpha Score sits at 47 out of 100, a Mixed rating in the Consumer Discretionary sector.