The Concept of a Smoothie
Dan Titus, Juice Gallery Multimedia
January 10, 2008

I've written about the ubiquitous smoothie for some time now. McDonalds and many other QSRs have joined in the foray. Now Starbucks is considering a bid for the beverage, one has to ask how this will impact the juice and smoothie industry. Is the juice bar concept, as it relates to smoothies, still viable?

It really comes down to positioning, whether the product is a concept, menu item and what the key market driver is.

Consumers like smoothies. They buy them, and now that the positioning is for the masses, the original intent as a made-to-order (MTO) functional beverage is blurred. The fact that a beverage could even drive an industry has been remarkable considering the barriers to entry and the cost to open a QSR.

As taste has become the primary driver, as in politics, the product benefits have been diluted. Consumers know that smoothies are good for them. They have heard about it. The masses may have even on occasion visited a juice bar. So, when they see a smoothie at another QSR, they make the general assumption that it is good for them. That's the thought that goes into it. They have no idea that the attempt is to emulate, or copy, smoothies sold in juice bars. And just like the products that come from China, quality suffers in these 'copies'. The mantra is less foodcost, less labor, but "hey it's still a smoothie even though it is made from a mix and less fresh ingredients." The consumers still like the product.

Armed with this information, QSRs like Cold Stone Creamery added smoothies to their menus, as well as a plethora of others. They added them to their menus, just like others add coffee or any other food item for the matter. They sell some as a percentage of their income, but nothing like juice and smoothie bars, which are destinations for the healthy fringe consumer; the consumer who has always frequented juice bars, and will continue to do so. They know the difference a healthy alternative and a product positioned as a healthy meal replacement: a store concept.

The problem that existing QSRs have when adding juice bar quality smoothies to a menu is the economies of scale. It takes time, specialized equipment and fresh ingredients; hence, it is more expensive to serve a smoothie positioned as a healthy meal alternative or a healthy snack. Serving a MTO smoothie with fresh ingredients and positioned as a fresh functional beverage commands a higher price. A price consumers are willing to pay. QSRs that try to position a menu smoothie as a healthy meal alternative must be very careful in how they present the product. Price to quality is important, and consumers are starting to know the difference. It all comes down to education.

Now that there is considerable competition, the major juice and smoothie bar chains are going to have to invest more in R & D, much more in consumer education and much more in advertising.

Starbucks has hinted at buying Jamba Juice. If this were to happen, cobranding would be the retail solution. This could work, as long as they could offer a quality product in a small footprint. But why go through so much trouble when a simple menu item, rather than a concept is all that is needed.

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