Smoothies Are Top Banana in Any Weather

The crowded market remains lucrative for innovators.
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You hear blenders churning ice in every major shopping center. Your gym offers vitality in tropical slush form. Instead of bacon double cheeseburger wrappers on the dashboard, you're seeing superwide straws.

And all the while, franchisors are seeing dollar signs.

"You can't have too many smoothies," says franchise consultant Dick Rennick. Increasingly mobile and health-conscious consumers are the willing targets of icy beverages marketed as guilt-free alternatives to Wendy's or fiber-rich substitutes for soft drinks.

The number of franchised units offering smoothies as their main products nearly doubled from 2002 to 2006, according to FRANdata, a franchise research firm. An ongoing stream of new companies that entered the industry during that time, such as Chicago-based Froots, plus continued development of established franchising systems, including Maui Wowi and Jamba Juice (JMBA) - Get Report, are the main factors behind the rapid growth.

Yes you can make money in this crowded market, says Rennick, but the minute you blend in, you're slush. Constant innovation is a must, he cautions, and every franchise needs a shtick.

Frutation by

Edible Arrangements

, launched this year, uses only fresh -- not frozen -- fruits and juice. Canadian-based

BoosterJuice

, which launched its first U.S. franchises this year, bills its products as meal replacements that improve energy levels.

But a unique blend makes up only part of a successful smoothie.

Frutation Location

Frutation's start-up fees typically range between $130,000 and $270,000: That means franchisors must sell smoothies and other fruit offerings at a brisk pace.

A high-profile location amid heavy pedestrian traffic is critical to sales success, says Frutation franchisee, Richard Folkman.

Folkman's store is located along downtown Denver's busy 16th Street Mall, a 16-block shopping and office hub with free shuttle service. Folkman saved on overhead by locating below street level, but worked out a deal with the landlord to post heavy signage outside. "Now it looks like we own the corner of the building," he says.

Frutation opened 15 stores since launching in June 2007, and expects to sell nearly 100 franchises in 2008, according to Kamran Farid, chief operating officer of Edible Arrangments in Connecticut.

The company aims to build brand awareness by locating in high pedestrian traffic areas such as malls and airports, and in states with warmer year-round climates.

Year Round Luau

Smoothie franchisees must be just as innovative with winter as they are with recipes. While frozen drinks are a tougher sell in colder climates, says Farid, you can still keep up brisk sales.

Many smoothie-franchise companies introduce additional products to bridge the cold weather gap. Folkman opened a dual-concept franchise in Denver this year that offers both Frutation and designer fruit baskets by its parent company Edible Arrangments. "It works well when you can play one concept off the other," he says.

But die-hard smoothie fans will continue to buy the beverage in freezing weather, says Folkman. He sold the Fruithy -- the company's smoothie drink -- and other Frutation delicacies during a recent 15-degree cold snap.

Minnesota, known for its harsh winters, happens to be one of Maui Wowi's biggest markets, says COO Mike Edwards. "We're a tropical escape there," he says. The franchise has also added Hawaiian coffees and snack foods to its menu.

Maui Wowi, franchising since 1997, is selling about 100 franchises per year -- a figure that's likely to remain steady, says Edwards.

Weather is irrelevant to sales of BoosterJuice, because the product is intended as a meal replacement, says U.S. chief executive Jon Amack. With 25 grams of protein per smoothie, "It's not just a drink to enjoy when it's sunny out and you're rollerblading," he says.

Kahala-Cold Stone Corp.

, a holding company for 13 fast-food brands is avoiding the weather issue entirely by opening a new smoothie-franchise concept,

NRGize Lifestyle Café

, in health clubs, where it's likely to find a captive audience of sweaty, parched patrons. The company recently signed an agreement to become the exclusive food and beverage provider for health club giant

L.A. Fitness

.

Suzanne Barlyn is a writer in Washington Crossing, Pa.