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Starbucks Concocts Plans for Fizzy Drinks; Is Sodastream in Its Sights?

Coffee Giant Begins Agency Outreach on Fizzio; Trademark Filing Indicates It Could Apply to In-store Beverages or At-home Carbonation Machines

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Don't be surprised if one of these days you're standing in Starbucks and you hear someone bypass a soy latte for a freshly fizzed lemon ale.

A trademark filing by Starbucks for the term "Fizzio" -- which came as the chain has been testing a line of carbonated drinks in Atlanta and Austin -- has fueled speculation the company is about to make a big play beyond brewing into bubbles.

The Seattle-based coffee giant in its filing noted that the name could apply to a variety of drinks as well as beverage-making machines, raising the possibility it could become a direct competitor to Sodastream, which produces machines for carbonating water at home. A Starbucks spokeswoman said that it has "not announced any plans about expanded availability" and said it does "not have plans for an at-home machine at this time."

Still, Starbucks seems very serious about making the Fizzio name known.

Multiple ad executives report the company is in the early stages of planning a marketing push to consumers around Fizzio and has already started reaching out to shops on Madison Avenue. "We do not comment on rumors about agencies we might hire," the spokeswoman said.

But there's a wrinkle: Starbucks will have to look beyond its lead agency, BBDO, as well as any agency under the Omnicom umbrella, given the ad-holding firm's longstanding relationship with PepsiCo. BBDO handles Mountain Dew, while sibling DDB, Chicago, manages Sierra Mist and TBWA handles Pepsi and Diet Pepsi.

This push marks the latest in a string of moves Starbucks has made in recent years to aggressively expand beyond coffee and buy new companies to reduce its reliance on third parties for products sold in-store. Its acquisition list includes juice company Evolution Fresh, San Francisco bakery chain La Boulange and tea brand Teavana. At-home machines have been a focus for the chain before; last year, just in time for the holidays, it rolled out the single-serve Verismo machine to compete against single-serve coffeemakers like Keurig.

The Verismo launch marked one of its biggest ad pushes. Starbucks began getting the word out in October 2012 and spent $14.7 million on advertising the machine, according to Kantar Media. Its total measured-media outlay in 2012 was close to $86 million; marketing for Verismo was about 17% of that.

Some analysts see the availability of Fizzio at-home as a few years off, given carbonated drinks are only being tested in select markets. The Fizzio trademark may be an early move "to cover their bases," said Hedgeye Managing Director Howard Penney, adding that Starbucks typically tests concepts at its stores, then rolls them out nationally before considering sales in external retail outlets or as machines.

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