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Business Services Industry

Big And Juicy

Entrepreneur, June, 2000 by Nichole L. Torres

In just a matter of years, the smoothie and juice industry has gone from nonexistent to ubiquitous. Now it's offering opportunities with a vengeance.

IT'S ALL about those super-smooth, super-healthy and super-profitable smoothies. Whether they're made of bananas, guavas or strawberries, their influence is being felt all over the franchise world. As juice and smoothie franchises open in food courts, shopping centers, malls and universities, the profits are soaring. People are rushing out in droves to gulp flavors like Caribbean Way and MangoFest. But what's making the fruit-blending business buzz?

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According to Chris Cuvelier, president of Juice & Smoothie Bar Consulting in San Francisco, the popularity of the frothy fruit can be easily explained: "Taste. Convenience. The way they make people feel. They're healthy. People are becoming more health-conscious all the time. More important, people are busier. A smoothie positioned as a grab-and-go snack or meal attracts those people."

A handful of big names are selling convenience to consumers all over the country, as franchisors like Planet Smoothie, Juice It Up! and Smoothie King add to their number of franchisees every day. Estimates of juice- and smoothie-bar sales are expected to surpass the $1 billion mark this year. The trend should continue, considering the industry has grown 30 percent over the past year.

HIS ROYAL HEALTHINESS

One person who's witnessed the industry grow from its infancy is Steve Kanau, the founder of the Smoothie King franchise. Kunau, 53, started making his own smoothies back in the late 1960s while working at a drive-in. He was allergic to dairy, chocolate and various other foods, so he couldn't sample the malts and banana splits that he sold. Instead, he started blending all the fruit he could find--pineapples, bananas, strawberries, oranges--into beverages for himself. Because of his low blood sugar, he also added protein supplements to the fruity concoctions.

In 1973, his focus on overall health led Kunau to open his own health-food store in New Orleans. "I offered a nutritious energy smoothie to my customers." he says. "Here in New Orleans, it's [hard] to find something that's really healthy and nutritious. Everything here is fatty and fried." Smoothie King was born out of a desire to provide an alternative to the typical fare.

Getting the word out seemed to be the big challenge. According to Kunau, very few people understood what a nutritious smoothie was. When Smoothie King first started franchising in 1988, the company had to educate its consumers. "Basically in every city we'd go into, people had never heard of a smoothie. They'd never heard of anybody concocting a fruit-based, blended product." But with 230 units nationwide, it seems the word is out.

BLENDING IN THE PROFITS

Kathy Webb of Louisville, Kentucky, is one of those Smoothie King success stories. In May 1999, she opened her franchise in a renovated movie theater. The unique space allow for tables and chairs to create the atmosphere necessary for a bona fide hangout.

The franchise was a perfect match for this dedicated 32-year-old health devotee. Originally from Houston, where Smoothie King has established a strong presence, Webb was a paralegal before opening up her shop for about $175,000 in start-up costs. And on her first day of operation, she had a bit of a scare. Webb was open for two hours without a single customer. "My [employee] looked over at me and asked, 'Are we even open yet?' I was distraught." In spite of Webb's initial fears, her first day of business ended up being a significant big money-maker.

Now the line sometimes stretches straight out the door. And though Webb doesn't do formal advertising, she goes to schools and hands out samples of her product. The consumers are listening. On a good day, Webb and her crew can easily sell 500 smoothies.

MIXING TRENDS

According to Cuvelier, a big smoothie trend is mobile smoothie stations. "People are putting together carts and kiosks that allow [them] to get into the juice and smoothie business without spending the typical $100,000 to $200,000 [in start-up costs]." Maui Wowi offers mobile franchises that can be trekked to high-traffic areas. Startup costs for a kiosk, inventory and franchise fee can range anywhere from $24,400 to $54,600.

Growing product lines is another trend, according to Brooksy Smith, a Planet Smoothie franchise developer in the Houston area. He says juice bars now offer "low-fat soups; proprietary snacks, wrap sandwiches, breads, muffins and baked goods."

Smith sees California as the the juice and smoothie industry mecca, but notes, "there's still some huge growth potential in [other] states that have nice weather"

Cuvelier believes the massive smoothie wave will next be moving toward the center of the country next, as states like Michigan and Kansas reap smoothie revenue over the next decade.

Business Services Industry

Big And Juicy

Entrepreneur, June, 2000 by Nichole L. Torres

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