States with distinct summer seasons are super easy to sell summer treats and products to. But what about a place that specializes in summer treats trying to make a living somewhere like New York or Chicago. Sure summer season will still be huge and successful but what about Christmas time or Halloween?
Check out some stats in the smoothie industry along with some innovative ideas to remain successful during the colder seasons:
The smoothie chains experienced strong growth the first few years, whetting analysts’ and marketers’ appetites for what looked like a sweet and juicy business concept. Category leader Jamba Juice Co.’s systemwide sales doubled in 1999, accounting for its acquisition of rival Zuka Juice Inc., and it grew more than 65% in 2000, according to the company. Jamba Juice, which owns most of its locations, had sales of more than $200 million in the fiscal year ended June 24. And, more than a decade after the first smoothie franchise appeared, overall sales in the industry are still growing and chains are opening more stores every year, with U.S. sales topping $880 million in the fiscal year ended June 30, according to the Juice & Smoothie Association, a unit of Juice Gallery Multimedia, of Chino Hills, Calif.
When David Van Meter opened a franchise of what’s now known as Juice Stop Branding Corp. in Boulder, Colo., in March 1998, customers flocked to his store, with lines extending out the door and onto the sidewalk. But sales would drop even on overcast, windy days, says the 57-year-old writer and former television producer, and in December and January sales fell to about half his business in the peak spring and summer months. Mr. Van Meter says he “anticipated that sales would decline during the cold weather months, maybe 25% tops, not 60%, which is what we actually experienced.” “I’d grossly underestimated” the effect of weather on sales, Mr. Van Meter says, adding: “Whoops.”
To win customers in more temperate areas — and keep them coming back during the winter months — franchisers are seeking to build brands that customers can identify with something other than just a cooling treat on a warm day, such as health, nutrition or fun. They are also choosing locations more carefully — indoors to avoid the cold and in food courts to offer a “healthy” choice among fast-food restaurants — and adding food items to their menus.
Sustenance to Go
Companies have also been expanding their menus, adding snacks or “grab and go” food items to attract customers to the store for items other than smoothies. Juice Stop locations sell soups, wraps and pretzels, and Mr. Clayton says Jamba Juice plans to add food to help counter the seasonality problem, but he doesn’t yet know what menu offering would best suit the brand. Michael Haith, owner and chief executive of Maui Wowi Inc., a Littleton, Colo., smoothie franchiser, takes another approach. He sees his brand as a fun, impulse buy rather than a health product, mixing smoothies with alcohol at some locations, and adding gourmet coffees to the menu. He puts smoothie kiosks and carts in impulse-buy locations like convention centers and stadiums.
Indeed, the market for prepared smoothie mixes, bought by restaurants to serve their customers, jumped 78% in fiscal 2003 to about $600 million, according to the Juice & Smoothie Association, while sales from smoothie stores grew about 17%.
Just remember that you need to make sure that the area you decide on is not already over saturated with your same type of business. This will keep you from struggling right off the bat and leave more room for other innovative ideas with less direct competition to deal with.
If you jumped into the smoothie industry, what creations would you come up with the stand apart?
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