Jamba Juice On Growth, JambaGo

Jamba Inc. chief executive James White said he is ready to grow the Jamba Juice smoothie chain into a global brand — starting with local elementary and secondary schools.

By next week, the 752-unit chain will have opened about 30 pilot locations of a new platform called JambaGo, designed as a licensed outlet that could go into self-service venues. White spoke with Nation's Restaurant News on Wednesday at an investor conference in Santa Monica, Calif.

Though JambaGo has potential at other venues, the focus will be the move into elementary and secondary schools, where foodservice providers are looking for more healthful options as a growing number of states prohibit the sale of junk food on K-12 campuses.

"We're leveraging technology and a system that makes us more accessible in venues we don't have access to," White said. "We think it's a really incredible growth opportunity."

Taking roughly the space of a soda fountain beverage dispenser, the JambaGo format, which White calls a wellness center, includes the chain's branded packaged products, as well as the option of several pre-blended smoothies that White said would rival the blended-to-order quality of those made in traditional locations.

EARLIER: Jamba tests JambaGo, expands product line

And for parents who fear the smoothies would simply add another dose of sugar into their kids diets, Jamba Juice now offers more healthful options made from all fruit with fewer calories, designed to meet the nutritional standards many states and school districts mandate for campus meals and snacks, he said.

JambaGo is the latest in a series of innovations White has spearheaded at Emeryville, Calif.-based Jamba Juice since he became chief executive in 2008, attempting to recreate Jamba Juice from a made-to-order smoothie chain into a potentially $1 billion healthy lifestyle brand.

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Menu upgrades

Turnaround efforts have included an expansion of food offerings, from the addition of steel-cut oatmeal and breakfast wrap sandwiches to hot-baked flatbreads, new-and-improved pastries and frozen yogurt.

Coming soon are menu items that will leverage new TurboChef ovens now in about half of the chain's locations, White said, though he declined to offer details.

The new menu offerings overall have helped build the chain's attachment rate — the sale of food or snacks along with smoothies — to more than 20 percent this year, up from roughly 15 percent to 17 percent in 2009, White said, though there's still work to do to reach his goal of a 30-percent attachment rate.

Expansion of food has also helped build the chain's average check, contributing to four consecutive quarters of positive same-store sales among company-owned locations. For the Oct. 4-ended third quarter, same-store sales systemwide were up 3.7 percent.

Along with food, Jamba Juice has also been beefing up its smoothie menu.

In recent years, the chain has added more-healthful all-fruit options, lower-calorie and probiotic blends, a Fruit & Veggie line, and beverages made with trendy coconut water.

More menu innovation is coming, promised White.

"As we faced the competition a few years ago from the likes of McDonald's, we wanted to make sure, hands down, there was no one – not any of the big players, whether McDonald's or Starbucks, and we have lots of people in the smoothie business – that would have the opportunity to deliver the quality or the range of custom smoothies as Jamba," he said.

When Starbucks announced last month that it had acquired the Evolution Fresh juice brand and planned to launch a new juice bar chain with the goal of stealing its share of the $50 billion health-and-wellness category, some industry observers said Jamba Juice had plenty to fear.

White noted that McDonald's spent $45 million in the first quarter of its smoothie line launch last year. Since then, Jamba Juice has had its best run of performance.

"We kind of joke about Jamba versus Goliath," White said. "But rumors of our demise have been greatly exaggerated, I guess now for a second time."

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Going overseas

Jamba Juice also sees an open runway for franchise growth overseas.

This year the chain launched in South Korea, where about 14 locations are open and a total of 200 are planned over the next decade. The first Jamba Juice in the Philippines opened in November, with about 40 planned there over 10 years.

Another 80 are planned for Canada, where the franchise operator Canadian Juice Corp. is helmed by Yogen Früz frozen yogurt chain founder Aaron Serruya, a former Jamba board member whose family in 2009 made a $15.45 million investment in Jamba Juice.

White said the chain is looking for more international franchise partners in the Asia Pacific region as well as South and Central America.

"You'll see us only sign deals in the 50 to 100 unit range," White said. "You will never see us announce we have one store opening in Dubai. A lot of brands do that, but that's not Jamba."

White sees Jamba Juice as a brand that could reach 2,700 locations worldwide — not including the JambaGo outlets.

Analyst Conrad Lyon of B. Riley & Co. in Los Angeles, said the move into schools could be a real growth opportunity, citing the potential of being in front of a captive audience on a daily basis.

"It will be huge for them to have that and generations will grow up knowing the brand," he said.

Still, Lyon said one concern is whether the quality of the product will remain consistent. "That's always a challenge when you start to dabble with different formats," he said.

Jamba Juice has also been growing its licensed branded product line, from frozen make-at-home smoothies to energy drinks, juice blends and frozen novelties.

White noted that Jamba Juice has been serving juices and smoothies for 22 years, adding that McDonald's and Starbucks are about "22 years too late to the party.

"We're delivering the freshest juice option on the planet right now, whether it's our smoothies or our pure juices," he said. "We've got a big footprint, and our focus and innovation in this space will only accelerate."

Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout