Planet Smoothie orbits new growth strategy

Nation's Restaurant News, Nov 22, 1999 by Karyn Strauss

Chain plans to open more units, launches new product line and in-store redesign

ATLANTA -- In an effort to catapult from a regional to a more national player in the smoothie segment, 5-year-old Planet Smoothie is taking off in full force with an aggressive expansion plan, new product lines and a revamped unit design.

While most smoothie-segment operators are regional players, Planet Smoothie is expanding beyond its Southeastern roots in an effort to create a larger profile for its smoothie concept.

The chain's growth plan is similar in scope to that of smoothie category leader San Francisco-based Jamba Juice. However, Planet Smoothie has opted for franchising as its strategy to increase market share.

The chain, which started franchising in mid-1998, has grown from 19 units at the beginning of 1999 to 90 stores in 19 states with at least 10 more to open by yearend. Development agreements have been signed for an additional 45 units. Same-store sales have grown "by about 20 percent every year," according to Martin Sprock, founder and chief executive of the company.

The Southeastern United States is still the dominant area of growth for the company, but new Planet Smoothie stores have opened this year in Portland, Ore.; Seattle; Vancouver; San Diego; Dallas; Houston; and Boston. The Washington, D.C., area is the next region the chain hopes to conquer.

On the international front, Planet Smoothie signed a five-unit development agreement this year in Singapore as a test market into the Pacific Rim. Significant expansion in other international venues is part of the company's overall growth plan, which ambitiously projects opening 250 new units in 2000 and an ultimate goal of 1,000 units by 2002.

"It's a very aggressive plan, but I think it's achievable," Sprock admitted. "We're selling close to 20 franchises a month and also are in negotiations with several different groups to acquire some smoothie groups that haven't been as successful. We also have lots of interest overseas, with deals [pending] of 20 to 50 units in three countries."

Planet Smoothie, with an average unit size of 1,200 square feet and total building costs of about $100,000, typically has targeted strip centers but now is placing an emphasis on malls and food courts, according to Chris Morocco, executive vice president in charge of franchising and new-business development.

The company would not disclose annual per-unit sales, but segment leader Jamba Juice generates roughly $650,000 per store.

The company also is interested in development in nontraditional sites, such as airports and office buildings, as well as co-branding opportunities, he said. The chain currently has three outposts in convenience stores at Exxon fuel center stations in Atlanta.

Touted as "fast fuel," Planet Smoothie positions itself as more than just a juice and smoothie company. According to Morocco, the concept is selling a healthy lifestyle with products geared toward today's active, health-conscious consumers.

"We're positioning ourselves as the healthy fast-food alternative," Morocco said. "We're selling a healthier lifestyle. Our stores are focused on that lifestyle through our products, our look, our merchandising."

Following a similar pattern to the specialty-coffee segment, customers in the smoothie segment tend to be habitual and loyal users who visit their local smoothie outpost five to six times a week, Morocco said, adding that many come in twice a day.

"For a lot of people it's almost an escape away from the hustle and bustle of their jobs," he said. "We attract a lot of young professionals who need a break in their day. We're the perfect setting for that."

Rather than listing smoothies by the vitamin or nutritional supplements that each contains, Planet Smoothie's "blasts," or smoothie categories, are simply named "booster blast," "fat burning blast," "workout blast" and "wellness blast." The proprietary "blast packs" are prepackaged to ensure consistency from store to store.

In order to compete for share of stomach in the healthful, quick-serve niche, Planet Smoothie has "evolved" its menu to include a new line of wrap sandwiches called Round-A-Bouts. Varieties include Veggie Cha Cha, an all-vegetarian wrap with spicy flavor; Chicken Cha Cha, a Southwestern-style chicken wrap; Turkey & Friends, a club-type offering; and Dagwood, which is a lean ham and cheese wrap.

A new, high-protein smoothie is currently in development. When rolled out this January, the product will contain 25 grams of soy protein. In January the company also will debut a line of soups, which will appeal to customers in its new, cold-climate markets. They will be packaged in cups, similar to the smoothies, in order to maintain portability and convenience.

"We knew that the concept would evolve, and that we'd sell other types of products other than smoothies, and we believe that will continue to evolve," Morocco said. "A lot of people in the beginning stages held it against us that we grew up on the East Coast, but we think that's actually helped us. We've become more of an innovator because we couldn't rely on such a warm climate or the awareness level that you have in California. It forced us to be more creative and not rely solely on smoothies.