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Despite a $500 million net worth, Shaq just finished his fourth degree. He warns graduates: 'Your character will take you further than your resume'

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Jamba Juice tries something new: Serious juicing

By
Brett Krasnove
Brett Krasnove
and
Beth Kowitt
Beth Kowitt
Down Arrow Button Icon
By
Brett Krasnove
Brett Krasnove
and
Beth Kowitt
Beth Kowitt
Down Arrow Button Icon
January 29, 2014, 4:38 PM ET

FORTUNE — There’s one major juice-related trend that Jamba Juice (JMBA) has missed over the past half-decade or so — and that’s serious juicing. Now, the $230 million-a-year purveyor of fruit smoothies says it’s pushing hard into the pulverization business.

The Emeryville, Calif. company, which has long sold the staples of the fresh-squeezed realm — orange and carrot juices — is rolling out a new whole-food blending and juicing platform that will let customers sip custom-order concoctions of things like ginger, kale, chia seeds, beets, and wheat grass to their hearts’ content. The new offerings should be available in more than 300 of Jamba’s 800 locations within the next year, the company says.

That, according to Jamba CEO James White, would make it the largest enterprise to date to fully incorporate the juicing of whole food produce onto its menu. Starbucks (SBUX) got into the market in a big way when it acquired juice company Evolution Fresh in 2011, but its cold-pressed juices are sold bottled in its coffeehouses rather than made to order.

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“It gives us the opportunity to democratize this really healthy trend that is largely unattainable for most consumers because of either availability or cost,” says White. By pricing its new juiced drinks at $5 to $6 for 12 ounces and $6 to $7 for a 16-ounce cup, the company is hoping to position itself a few dollars bellow most of its juicing competitors, who are primarily independent chains with only a handful of locations.

White says the move is a return to Jamba’s roots. The company did more juicing in the 1990s when it started as Juice Club, but it eventually turned more toward smoothies. “If you think some of the juicing is niche today, you can imagine what it would look like in 1990,” White says.

The reason for Jamba’s current shift is clear in the industrywide numbers. U.S. Juice sales in 2013 totaled $15.5 billion, according to market research firm Mintel, a 4% drop from their level in 2008. Mintel food and drink analyst Beth Bloom says the decline in part stemmed from health concerns over the often-high sugar content in juice.

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Bloom, however, thinks that an expansion into the health food store-type juicing could reinvigorate the category. So does Harry Balzer of consumer market research firm NPD Group, who draws parallels to the coffee category — which reached its peak in terms of U.S. consumption way back in 1946, when Americans on average drank a stunning 48 gallons of joe a year. (We now drink less than half that amount, per capita — about 23 gallons a year — according to the U.S. Department of Agriculture.)

Balzer says consumers have stayed interested in coffee because of innovation in the category — pumpkin spice latte, anyone? The same could happen with juice. “We all demand novelty in our diet,” he says, “but new things will be variations of things you already know.”

In Jamba’s case, so far, such variation has met with at least modest success. In the 50 Jamba stores that have rolled out the expanded whole food blending and juicing menu, sales have increased 3% to 4%.

MORE:  Managing for feast, not famine

Whether consumers beyond affluent coastal pockets want to drink kale on any real scale, of course, is still a very big unknown.

Though the juicing move hits the right marks for a company that aims to appeal to younger, health-minded consumers, the big issue will be price: Will enough consumers choose to spend $5 to $7 for a feel-good jolt? Darren Tristano of food industry consultancy Technomic believes the answers are likely to be “yes” for the top layer of the economy, but not the bottom. “The real question of success,” he says, “will come in the middle income group.”

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