Thanks to consumers' interest in healthier and portable foods that can be eaten on the go, the juice-bar segment of the foodservice industry continues to prosper.
As of July 2008, there were 6,405 juice and smoothie bar operations in the United States, an increase of 2,462 from 2001, according to a report published by Juice Gallery Multimedia, a Chino Hills, Calif., consulting group. U.S. sales for this segment were estimated at $3.4 billion in 2008, compared with $2.1 billion in 2005.
The number of QSRs offering juice-bar or smoothie-like menu items is expected to double in the next five years, increasing market penetration of juice blends and smoothies(?)to more than 29 percent of the foodservice industry by 2013, according to Juice Gallery. This is expected to give foodservice operators from other segments the incentive to add smoothies to their menus, which would further increase consumers' exposure to these products.
Although market reports combine the juice- and smoothie-bar segments, these two foodservice operators feature some specific distinctions. For example, juice bars sell smoothies as well as fresh-squeezed juice and may offer meals or snacks,. By contrast, smoothie stores specialize in smoothies and typically don't sell fresh-squeezed juice.
Offering a healthful smoothie option at a price point that consumers are willing to pay continues to be a challenge for many quick-serve restaurants because of the time, specialized equipment and fresh ingredients required to prepare smoothies, according to Juice Gallery.
The group's report also predicts that? co-branding among operators will continue, as partnerships and joint ventures further bolster brand name recognition. Equipment manufacturers are expected to improve designs and develop innovations geared for the juice and smoothie segment. Improved distribution also is expected to help meet increased operator? demand, Juice Gallery reports.
Case Study: Island Grill & Juice Bar, Houston, Texas
When Faysal Haddad purchased one of Houston's five Smoothie Island operations back in 2000, his goal was to add food to the menu while keeping the emphasis on the restaurant's juice-bar roots. He started by changing the operation's name to Smoothie Island Juice Bar & Grill.
"The biggest challenge in the beginning was our name," Haddad says. "Still, even after the name change, people didn't realize we had food. They thought we were just a juice bar."
During Smoothie Island's transformation, many of the changes occurred behind the counter. Haddad admits it was not easy to convert the 500-sq.-ft. smoothie bar into a full-service kitchen that would accommodate an upscale menu. The smoothie bar's kitchen contained only a juicer and a walk-in cooler and freezer. The installation of 24-inch and 36-inch grills, in addition to a flat-top, an electric fryer, a steam table and two prep tables, provided the means to expand the operation's menu.
Logistics were an important part of the kitchen redesign. The juicer is situated by the prep table, which holds trays of fresh produce. The cooler and freezer are near the smoothie blender. Separate from the rest of the kitchen, the juice and smoothie area requires a dedicated staff member.
But Haddad did more than tinker with the equipment package: He also adjusted the juice bar's recipes and ingredients, drawing on his Middle Eastern heritage. "I was determined to cook the way my mother taught me and the way I cook at home," he says.
The 1,400-sq.-ft. Island Grill is positioned as offering a casual fine-dining experience at reasonable prices. Haddad sought to create a neighborhood gathering spot where residents of the upscale Houston suburb of Tanglewood could grab a bite or a beverage after their tennis game at the country club. "As the only fresh juice bar in the area, our customers are looking to us for freshness and quality to maintain a healthier lifestyle," Haddad says. "These are people who want to counterbalance their indulgences with healthier food. It took a full year to implement the food menu."
Haddad's refined concept resulted in a lucrative marriage of healthful food and beverages, which prompted him to add two more Houston locations. The second Island Grill opened almost two years ago near Houston University, and the third location will open this month inside one of the city's YMCA facilities.The 2,000-sq.-ft. YMCA location features an expanded kitchen that measures 900 sq. ft. Unlike the flagship Island Grill, newer sites include gas equipment and a convection oven. "Our goal is to provide faster, more-efficient service," Haddad says.
In all locations, the visibility of the fresh vegetables used for juicing helps sell the beverages. Island Grill's best-selling juices include The Green Wave, a mix of carrots, celery, cucumber, spinach and parsley, and the Emerald Isle Cooler, which includes carrots, celery, beets, spinach, parsley and an energy supplement. Top-selling smoothie varieties are strawberry-banana and banana-blueberry.
The restaurant also is known for its Island Salad, which combines romaine lettuce, onion, tomato, cucumber, broccoli, zucchini, bell peppers, mushroom and feta cheese. The chicken tortilla soup, Angus burgers and chicken pita (containing grilled onion, mushroom, lettuce and tomato topped with signature garlic sauce) are popular, too.
Along with produce price fluctuations, menu substitutions pose a unique challenge when running a juice bar. "If a customer requests a Veggie Splash juice with no carrots and extra spinach, it changes the price of the juice," Haddad says. "We need to communicate to our customers that there are some vegetables, like spinach, that don't produce as much juice as others, such as carrots. Consequently, more spinach is needed to create the juice. This results in a price difference."
Yet because of its location and its health-conscious customer base, Island Grill has thrived in a segment where others have struggled. "In this business, it is important to be in areas where customers appreciate the health advantages of fresh juice and have the disposable income to purchase these beverages," Haddad says. "Fortunately, our customers are educated about food and the nutritional benefits of juice."
When Haddad opened the Island Grill, he planned to turn the business around and sell it for a profit. Now he finds it difficult to walk away from a unique foodservice concept so close to his heart. "Due to our success, I'm definitely keeping the business and plan to open more locations in the years ahead," he says.
Q&A with Ari Shapiro, owner, Xoom, Tucson, Ariz.
When avid cyclist Ari Shapiro moved from San Francisco to Tucson, Ariz., in 2000, his path was not immediately defined. It was only following Shapiro's quest to improve his race performance that he began experimenting with smoothies at home.
"It then occurred to me that the juice- and smoothie-bar chains were adding artificial sugars and sherbets to their beverages—there were no other options," Shapiro says.
Seeking to offer more-nutritious beverages, Shapiro opened Xoom (pronounced 'Zoom') in 2001. Because of the restaurant's success, two additional sites opened during the next year. And last November, former Tucson resident and avid Xoom fan Jennifer London opened a fourth location, this one in New York City.
FE&S spoke with Shapiro about his operation, the juice- and smoothie-bar segment and how he has grown his business in today's economy.
FE&S: What are the biggest issues faced by juice bars today?
AS: Our primary challenge is competition from coffee-houses that offer blended coffee drinks. Although priced similarly to our beverages, they don't offer the same nutritional value. We also are finding that, due to the emphasis on eating healthier, there are a lot of mixed messages and information being disseminated.
FE&S: How have you adjusted your operations to remain profitable in this economy?
AS: Our sales only dropped about 7 percent in 2009 compared with 2008. Even though the cost of supplies increased, we decided not to change our prices. We did cut back on our marketing and have focused more on e-mail campaigns. This was a huge initiative for us over the last year. It provides a great cost benefit and is very targeted.
FE&S: What makes your operation unique from other juice bars?
AS: Although the focus is on our juice beverages, espresso is not an afterthought. Our [smoothie] recipe model does not include fillers, like sherbet, so our food cost is higher other juice bar chains. Also, rather than the tropical décor used by traditional juice and smoothie bars, our operations have an urban contemporary look, similar to a cozy coffee bar.
FE&S: What are your top selling items?
AS: We are known for our açaí smoothie and the Xoom Spoon, which includes granola layered with açaí. Xoom's signature beverages include Max Daddy, made with soymilk, honey, raspberries, bananas, black cherries, yogurt and oat bran. We also created a new Infusional category, where we incorporate our espresso into the smoothies. The Grand Royal includes milk, espresso, yogurt, bananas, strawberries, blueberries and a dash of chocolate syrup. Although smoothies make up 90 percent of our business, I like to think of the operation as a smoothie espresso bar.
FE&S: How would you describe your menu?
AS: We consider our beverages nutritional meals, so we don't have any other food on our menu. These are positioned as a healthy breakfast, light lunch or nutritional snack. As a result, we've kept our recipe model and ingredient profile straightforward, balanced and simple. We've also coined the term "xeedlings," a play on the word "seedlings." This describes Xoom's healthful ingredients, such as granola, raw coconut and raisins, which help boost the beverages' nutritional value. In addition to our smoothies, we sell healthy, prepackaged snacks, such as organic energy bars.
FE&S: How does your equipment support the menu?
AS: Due to our frequent fruit deliveries, we don't use walk-ins. Instead, we have three-door freezers for individual quick-frozen fruit and one- or two-door coolers for soymilk and fresh yogurt. We have four high-end blenders, which we've used for the last eight years. In addition, a bag-in-box system is used with some of our juice products. An Italian espresso machine is used for our coffee drinks.
FE&S: What attributes are key in juice- and smoothie-bar equipment?
AS: First and foremost, we look at equipment quality. This is even more important than price because any money you save initially can quickly be lost if a repair is needed. Xoom's blenders are durable, only needing motor, dry-socket and blade replacements every year or two. Also, I personally train all new staff members on how to use our equipment. We put a great emphasis on how to operate and treat all equipment to minimize breakdowns along with wear and tear. For example, our staff knows how to properly open the freezer door so the seal is not compromised.
FE&S: What are the equipment innovations that have had the biggest impact on the juice-bar segment?
AS: In our operation, having a powerful blender in a small footprint is key. My operation would not be what it is without commercial blenders. I have mixed well over 100,000 smoothies and can remember only three instances where a chunk of fruit was left in the jar. Our ingredients are important, but it is the equipment that creates consistent, quality beverages.
FE&S: Are there any aspects of your business that you would change?
AS: We are looking at changing how we market to potential customers. We want people to know that, in addition to our fruit beverages, we also have an espresso program featuring beans from a local roaster. We are fortunate to have a very loyal clientele, with some customers coming in three to four times a week for the last eight years.
FE&S: What are your plans for this year?
AS: We plan on opening more locations outside of Tucson. For years, we've had requests to franchise from all over the country. We've declined to go this route because we are concerned it may compromise our brand. Our New York City site is similar to a franchise but without the restrictions. We will look for cities that are a good fit for our operation with potential customers that understand what we do. We are focused on slow, quality growth.
FE&S: What do you predict for the future of this segment?
AS: There continues to be a great emphasis on healthy eating right now. Americans realize that fast food and soda addictions are at the root of obesity and diabetes. Consequently, I predict the juice and smoothie bar segment will do well, particularly those operations that keep the focus on healthier ingredients.