From The September 2002 Issue of Natural Foods Merchandiser

Squeezing Profits From the Juice Bar

Thomas Garvey May

To define the scope of a store's foodservice operation, a retailer must consider various factors, including store size and corresponding traffic flow and nearby competing businesses. Fresh juice and smoothie setups can be integral, but the first step is a market analysis. And once you've made a commitment, there are fundamental operating strategies that will help keep the department from being the store's loss leader.

The consumer profile for fresh-squeezed juice and smoothies varies, says Dan Titus of the Juice & Smoothie Bar Association based in Chico Hills, Calif., but the purchase is primarily an impulse buy, so careful attention to the menu and the department's appearance are paramount.

"Nobody sits at home, looks through the paper and decides to go out and get a smoothie," says Kathy O'Malley, who owns and runs Ed's Juice Joint on the Pearl Street Mall in Boulder, Colo.

Determining the viability of a beverage operation in a particular store is obviously the first step. Allen Seidner of Thought For Food Consulting in Fairfax, Calif., suggests first evaluating current store traffic and foodservice business, as well as competing operations close to the store.

It's also important to objectively judge a store's location. "Your opportunity in the market is different if you're in the downtown section of a college town than it is if you're at the corner of a busy intersection that has no sidewalk," Seidner says. "It really, really depends on your market environment, your customers and what you think is missing in the community."

Robert Pack, owner of the Greensboro, N.C., three-store chain House of Health, is putting an organic juice and smoothie operation in one of his stores because there's no place in town to get anything like it. "It's always frustrated me that there's no place in town to get a glass of fresh-squeezed organic carrot juice," Pack says. "We thought it would help build some foot traffic in the new store, solidify some of our relationships and maybe gain some new ones with a younger crowd."

Getting inside the head of the smoothie consumer is the next task. The juice and smoothie business was born at the end of the 1980s yogurt craze, says Chris Cuvelier, president of Juice and Smoothie Bar Consulting in San Francisco, so meal replacement will always be a part of the business.

Fitness and health continue to motivate smoothie buyers as well. The juice, smoothie and coffee bar at Ozark Natural Foods in Little Rock, Ark., has an established niche as one of few locations in the area that squeezes fresh wheatgrass shots. It gets business throughout the day, and Bradford Keys, manager of the department, says a majority of regulars see the products as part of their health maintenance program. "We get more folks interested in the health reasons than we do folks buying for flavor," he says.

But consumer segmentation isn't as relevant when it comes to a beverage program, according to Cuvelier. "The biggest thing driving consumer buying behavior, which transcends both the juice and coffee business, is the R.E.M philosophy—rewarding everyday moments," he says. "People are willing to spend the three, four or even five bucks for that one little indulgence they have every day, whether it's a double mocha or a strawberry-banana-guava smoothie."

The juice or smoothie purchase is primarily an impulse buy.

Because a cup of fresh-squeezed juice or a smoothie is an impulse buy, successful programs must catch the attention of customers. Most sales at Ed's Juice Joint come on the spur of the moment, O'Malley admits, so she directs marketing dollars toward the look of the store. O'Malley says she and her husband Ed have put all their resources into making sure the store is appealing to people strolling by on the pedestrian mall. From brightly painted, elaborate menu boards to umbrellas over tables with wheatgrass-planter centerpieces, the store is eye-catching. "We've never advertised. We just try to make the place look as fun as possible," O'Malley says.

Creativity must underlie menu making, and keeping an eye on the horizon for new concepts or side-sale products will help keep the business fresh. Seidner warns retailers not to offer boring recipes or a confusing selection of pick-your-own ingredients. "You have to do something innovative and interesting because people can make their own smoothies at home," he says.

O'Malley reworked the menu when she and her husband bought out the previous owners of their juice store. They made many of the drinks "healthier," renamed some that didn't sound enticing, and played up the fresh, organic and local angle wherever they could. "For an impulse buy," she says, "you have to touch on as many consumer drivers as possible."

Cuvelier has worked with a client in Arizona who is adding some zip to a menu by combining coffee and juice offerings. Xoom Juice in Tucson works an espresso shot into several of its smoothie recipes, in part to drive its morning business.

And further out on the horizon, Cuvelier sees new fruits helping the smoothie business. Acai, a fruit from Brazil profiled in the July 2002 issue of Gourmet magazine, holds promise for beverage operations. It's a purple palm berry with a phytochemical content greater than red grapes and a cultish following among professional beach-volleyball players and surfers. "That's something I expect to see in juice bars all over really soon," he says.

Poorly conceived foodservice operations can shipwreck a retail store, and a juice and smoothie bar is no different. But with some attention to detail and a little creativity, this prepared foods department does afford business opportunities. Seidner says that unlike the produce department and most other foodservice offerings, frozen fruit and juice for smoothies have long storage lives. "Nobody can make themselves an organic smoothie at home for any less money than it costs to get one from you," he says.