Jamba CEO: “Fresh Juice Out Of A Tap Is A Disconnect For Most Consumers”
- Posted by ToddSullivan
- on November 20th, 2012
Jamba Juice CEO James White takes a direct shot at Starbucks new “Evolution Fresh” juice concept in which “fresh” juice is poured from a tap on the wall. $JMBA will beat $SBUX to the punch on this one. They will have a superior product that is fresh squeezed on the spot and will be up to 100 locations by the end of Q2 next year vs the inconsequential number of $SBUX locations. $SBUX attempted to take $JMBA on in the smoothie market at their coffee locations but that effort was a failure. This was in part because the smoothies were squeezed out of plastic bottles that make fart sounds with each squeeze of the “Barrista” and to consume the unpleasant chalky tasting result one is force to muscle it past their gag reflex. $SBUX does coffee better than anyone….Smoothies? Not so much
$MCD took $JMBA on but here again their smoothies are pour from a silver bag. While omitting the audible assault of “Old Milwaukee and burrito flatulence” of the $SBUX effort, “fresh” to me is not squeezed out of a bag like ketchup (they do taste decent though). It apparently is not to consumers either as $JMBA has seen SSS growth that corresponded to $MCD’s smoothie introduction
More after the news:
The parent of Jamba Juice is testing an expanded menu of fresh juice offerings that will be a key element in a new concept design scheduled to debut early next year.
Emeryville, Calif.- based Jamba Inc. has long been saying it is working on the development of a new “juice-forward” concept, with three locations scheduled to open in Northern and Southern California and New York next year. James White, the company’s chair, president and chief executive, revealed some details of the plan to Nation’s Restaurant News, saying the new concept stores will include variations in format — including the possibility of a juice-only concept — and a re-imaging that will eventually be applied to existing stores.
Earlier this year, Jamba expanded its juice offerings in what White described as “phase one.”
With the first scheduled to open in Emeryville early next year, the new-and-improved Jamba Juice will feature an expanded range of freshly squeezed juices and handcrafted juice blends, including ingredients such as beets, kale, carrots, apples and ginger, said White.
Jamba has been testing the expanded juice lineup over the past two months at a location in Emeryville, and White said sales of fresh juice at the location have doubled. “What we’re seeing early on is that the fresh-juice customer is a more habitual customer, less seasonal than our core (smoothie) customer,” he said. “We are excited about the long-term prospects.”
About 100 corporate-owned locations within the 788-unit chain are scheduled for a remodel in the first half of 2013. The company is planning to launch a capital expenditure program for the unit remodels and is aiming to refresh 100 units annually over the next three to four years.
The design of the new stores will be more contemporary and will emphasize freshness, with more fruits and vegetables prominently displayed. “People want to actually see physically the fruits and vegetables, and see you produce it in front of them,” White noted. “Juice out of a tap is a disconnect for most consumers. Our juices are freshly squeezed on the spot, handcrafted beverages.”
Juice has become a popular entry point for the estimated $50 billion health-and-wellness category. Last year, Starbucks bought the Evolution Fresh cold-pressed juice brand and has developed a chain of healthful juice bars by the same name with three locations on the West Coast. In addition, the smoothie chain Juice It Up! has added a fresh juice component to its menu. And small juice bars are popping up in cities across the country as the popularity of juice diets for meal replacement continues to grow.
Jamba Juice has been working to build its position as a health-and-wellness brand, and efforts are paying off, said White, who in 2012 is expecting the chain to see its first year of profitability in six years as a public company.
The company is projecting full-year same-store sales growth of 4 to 6 percent at company-owned locations. During the third quarter, traffic at company-owned locations grew by 5.1 percent — in part as a result of value price promotions — contributing to a 3.9-percent increase in same-store sales.
The company is also rapidly growing its self-service JambaGO automated drink stations in non-traditional locations, including schools. With 239 JambaGO units open in early November, the network is expected to grow to 1,500 by the end of 2013.
SBUX and juice will do for $JMBA ‘s juice effort what McDonalds smoothie did for Jamba’s, bring awareness to the category and consumers will go to the superior product…… Jamba’s
This also coincides with today announcement the chain is ramping up expansion plans in California and insiders have been buying shares. 2013 will be the year that several efforts for JMBA come together that alters the company from a “turnaround” to a growth company. CPG (consumer packaged goods) revenue will grow from ~$3M in ’12 to $4M-$5M in ’13, the juice effort based on early tests will add growth, the company has lowered its cost basis to a point where additional sales will leverage earnings, international growth continues, JambaGo will quintuple its location base (mainly in schools prompting more brand awareness) in ’13 and the non-traditional formats in colleges and airport continue to grow.
All of those efforts began rollout in early 2012 are have picked up momentum as the year has unfolded. ’13 looks to be a very good year for the company
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Todd's investing strategy is essentially long with the rare short. He seeks to buy undervalued issues with an upcoming catalyst that will help them realized.... More »
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