Take a look at any refrigerated case in the produce department, and you'll understand just how supermarkets feel about fresh juices and smoothies. It's not uncommon these days for stores to merchandise up to 8, multi-tiered feet of these fruit and vegetable concoctions.
Labor-sensitive retailers like juice smoothies because they require no special knowledge to pack out and don't require trimming and rotation like fresh produce. Smoothies have a longer shelf life, too.
So, it's no surprise to see fresh smoothie kiosks whipping up competition in the $2 billion category. Supermarkets like Safeway and Whole Foods Market have installed juice and smoothie stations in select stores over the past few years. Many are outlets of national chains like Jamba Juice and Smoothie King. Some are franchised, but the vast majority of these in-store units are leased to, and staffed by, the retailer.
Paul Clayton, CEO of Jamba Juice, told us a while back that a 250-square-foot kiosk produces about two-thirds the revenue of one of the company's freestanding stores — not a bad return on a small footprint. They're also much more efficient to run.
Smoothies offer a fantastic health and wellness profile, and are ideally suited for supermarkets. That's why competition among makers of both bottled and fresh smoothies is growing intense. McDonald's is making them, and Starbucks is planning to. This week, Jamba Juice partnered with Dole Food Company, to launch Jambafruit.com, an online portal where consumers can submit and share smoothie recipes. Dole has slapped millions of customized stickers on bunches of fresh bananas that read, “I Want to Jamba!” at thousands of grocery stores nationwide.
The co-branding effort gets Jamba's name deeper into supermarket territory, and Dole gains brand-name access into foodservice. This is the kind of arrangement we'll likely see more of in the category as consumer demand for healthful, indulgent beverages grows.