Starbucks Fizzio Golden Ginger Ale [Via MerlinFTP Drop] (Photo: Kathryn Barnard Photography) 
 
 Starbucks is about to make a cold — and carbonated — calculation. 
 
 On Tuesday, the designer coffee kingpin will try to become a designer soft drink titan, too, with the launch of three flavors of Fizzio Handcrafted Sodas made by baristas at more than 3,000 locations across the U.S Sunbelt. It's a carefully calculated bid to drum-up afternoon business and evolve yet another beverage specialty. 
 
 If it works, Starbucks will have given folks yet another reason to willingly pay a premium for beverages that are part show and part show-off. 
 
 "We are changing the game in terms of how to get a carbonated drink," says Josh Fine, brand manager for Fizzio."Like what Starbucks did to coffee 40 years ago, we think we can do in the carbonation space." 
 
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 The sodas have Starbucks pricing: about $2.45 for a "tall." (A "tall" coffee goes for about $1.80.) 
 
 The same baristas who put on a show making lattes and espressos now will go through lots of fizzing and popping to make you a root beer, ginger ale or lemon ale. And get this: They are caffeine-free. 
 
 It only takes about 85 seconds for a barista to make a Fizzio drink, so they won't result in long lines, says Fine. And while the machines are noisy, he says they will add — not subtract — to store ambiance. Starbucks won't say when the sodas will be in all stores. 
 
 For Starbucks, it's about getting a toehold in the $400 billion global carbonated beverage market. While carbonated beverage sales have declined in the U.S. for years, Starbucks figures it can lure nutrition-conscious Millennials with sodas that have the fizz but no artificial preservatives or additives, and no high-fructose corn syrup. 
 
 "Adding new drinking occasions is the key to (Starbucks) growth," says Michael Silverstein, senior partner at the Boston Consulting Group. The company also is branching into tea with its purchase and expansion of the Teavana brand. 
 
 What's more, homemade soft drinks are hot. They were named the top beverage trend last year in the National Restaurant Association's annual survey of top chefs. 
 
 About a year ago, Starbucks began testing the sodas in Austin and Atlanta. In those markets, plus Houston, it's also now testing a caffeinated cola with a hint of citrus and honey, says Fine. 
 
 The sodas are made with a machine developed by Starbucks and partner Cornelius. It does not combine carbonated water with syrup as in most commercial machines. Instead, the flavors and spices are combined in a large cheesecloth — like a big tea bag — and steeped in hot water. Buyers can request light, standard or extra carbonation. 
 
 As an alternative to soda, you can get that carbonation in an ice tea or Starbucks Refresher for an extra 50 cents. 
 
 And while you can't order a real root beer float — Starbucks doesn't sell ice cream — some folks in testing have asked for a root beer mixed with a Vanilla Bean Frappuccino. "It's not on the menu," says Fine, "but our customers can be pretty creative." 
 
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 Starbucks’s (SBUX) test last year of made-to-order Fizzio sodas in Atlanta, Austin, and Japan is being expanded to the southern half of the U.S and Hawaii. Root beer, ginger ale, and lemon ale sodas will be available starting this week in the Los Angeles, San Diego, Stockton, and Modesto areas of California, and in Arizona, New Mexico, Nevada, Utah, Texas, Oklahoma, Louisiana, Mississippi, Alabama, Georgia, Florida, South Carolina, North Carolina, Virginia, and Hawaii. 
 
 Spokeswoman Linda Mills said the company hopes to expand the sodas nationally in the coming year. The Fizzio rollout this summer extends to stores in Singapore, South Korea, and China. The chain will add location-specific flavors over time, and customers can add fizz to other beverages for 50¢. 
 
 The drinks are expected to drive only modest sales growth. Starbucks’s broader goal is to use the sodas and other cold beverages to amp up lunch. The company has focused on wooing customers beyond the morning rush. This summer it’s introducing new Teavana iced teas and two sandwiches (turkey pesto and grilled cheese). 
 
 Interestingly, in a press release, Starbucks promoted the benefits of the Fizzio machine, which can add carbonation to finished beverages and adjust the amount of fizz. SodaStream (SODA), by comparison, cannot carbonate anything other than water; flavorings have to be added post-fizz. Starbucks isn’t planning an at-home machine now, Mills said. Yet as Keurig Green Mountain (GMCR) and Bevyz team up with Coca-Cola (KO) and Pepsi (PEP), respectively, to take on SodaStream with their own at-home soda machines, the idea that Starbucks might eventually sell a Fizzio soda maker doesn’t seem far-fetched. ||||| Stock Chart for McDonald's Corp (MCD) 
 
 McDonald’s Corp. (MCD) is adding pumpkin-spice lattes to lure the Starbucks crowd and boost traffic. 
 
 McDonald’s, the world’s largest restaurant chain, has been introducing pricier items such as chicken wings, McWraps and steak breakfast sandwiches to maintain profitability in the face of higher labor, occupancy and operating costs. At the same time, the company is expanding its value menu to draw bargain-seeking diners. 
 
 “They’re trying to further refine the so-called barbell” strategy of selling low-priced, value items along with more expensive fare, John Gordon, principal at San Diego-based Pacific Management Consulting Group and adviser to restaurant franchisees, said in an interview. They are trying to sell the higher-price food because “they need the margin.” 
 
 The McCafe pumpkin latte -- a mix of espresso, milk and flavored syrup -- come in three sizes and are available with whole or non-fat milk, the Oak Brook, Illinois-based company said. A 16-ounce latte with whole milk has 340 calories and costs $2.89. A regular coffee is $1. The lattes are being introduced this month and will sell through mid-November. 
 
 The shares rose 0.5 percent to $97.78 at the close in New York. McDonald’s has advanced 11 percent this year, while the Standard & Poor’s 500 Restaurants Index has gained 19 percent. Starbucks has added 43 percent. 
 
 Starbucks Lattes 
 
 Starbucks Corp. (SBUX) has sold 200 million pumpkin spice lattes in the nine years since it introduced them, said Alisa Martinez, a company spokeswoman. The drink has the same number of calories as McDonald’s offering and a 16-ounce one sells for $4.55, on average. The Seattle-based company, which has about 11,200 U.S. cafes, also sells salted-caramel mochas, hazelnut lattes and is introducing new bakery items nationwide. 
 
 McDonald’s may be able to steal some Starbucks customers because Americans are focused on finding deals now and pumpkin has become such a popular flavor during the fall season in the U.S., Gordon said. 
 
 “Everybody is doing pumpkin this fall,” Gordon said. 
 
 In addition to Starbucks’s lattes and pumpkin bread, Dunkin’ Brands Group Inc. (DNKN)’s Dunkin’ Donuts chain has a pumpkin mocha, Orograin Bakeries Products Inc.’s Thomas’ sells pumpkin-spice bagels and Pinnacle, owned by Beam Inc. (BEAM), has introduced pumpkin-pie flavored vodka. 
 
 Paper Cups 
 
 McDonald’s also will begin serving hot beverages in paper cups, instead of polystyrene foam containers, bowing to customers’ preference for a recyclable option, Ofelia Casillas, a spokeswoman, said in an e-mail. Changing all 14,100 U.S. locations to paper will be a “multi-year” process, she said. 
 
 The new paper cups put McDonald’s ahead of Dunkin’ Donuts, which sells its drinks in foam cups. The Canton, Massachusetts-based chain is testing a cup recycling program and looking for alternatives to foam as customers become more concerned that the containers are bad for the environment, according to Dunkin’s latest corporate responsibility report. Dunkin’ also sells a pumpkin latte. 
 
 McDonald’s has recently struggled in the U.S., where it is facing a tough consumer environment. In August, sales at stores open at least 13 months rose 0.2 percent domestically, falling short of the 0.8 percent gain projected by analysts. Earnings have trailed estimates for the past two quarters. 
 
 The operating margin at McDonald’s U.S. company-owned restaurants narrowed to 18.7 percent in the quarter ended June 30 from 19.8 percent a year earlier. 
 
 The fast-food company’s new Dollar Menu, which it’s testing in five markets in the U.S., includes items that sell for as much as $5. McDonald’s Dollar Menu was introduced in 2002 and it rolled out the McCafe lineup of lattes, cappuccinos and mochas to the U.S. in 2009. 
 
 McDonald’s is scheduled to report third-quarter results Oct. 21. 
 
 To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net 
 
 To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net
– Starting tomorrow, Starbucks across the sunbelt states will offer a new drink that's—get this—carbonated, USA Today reports. Baristas will be making Fizzio Handcrafted Sodas at rather noisy machines (that add ambiance, not annoyance, apparently) in ginger ale, lemon ale, and root beer flavors. They'll be caffeine-free, without additives or preservatives or high-fructose corn syrup, and cost about $2.45 for a "tall." So what's up? "We are changing the game in terms of how to get a carbonated drink," says Fizzio's brand manager. "Like what Starbucks did to coffee 40 years ago, we think we can do in the carbonation space." Starbucks is expecting only so-so growth from Fizzio sales, but hopes to lure health-conscious Millenials and other customers beyond the morning rush into lunchtime, reports BusinessWeek. Why now? Well, homemade softdrinks are popular these days, named the No. 1 beverage trend in a national survey of top chefs last year (although actual carbonated-drink sales have fallen in the US). The move also comes as Starbucks hikes prices on some drinks by up to 20 cents, reports USA Today.