The smoothie industry Essays

The smoothie industry Essays The smoothie industry Paper The smoothie industry Paper The smoothie industry has and is still experiencing exponential growth. This case analysis will delve into the industry by observing its external and internal environment. Utilizing Griffins Model as a guideline; eco-environment, economic, technological, political/legal, social/cultural, international dimensions and its task environment will be closely analyzed. A. External Environment: I. Eco-Environment: Since the smoothie industry relies heavily on fresh fruit and juices for its ingredients, the eco-environment definitely has an important role. The climate can either limit or help the industry thrive depending on the fruit(s). Fruits such as oranges thrive during summer season and strawberries flourish in the winter season. The seasons not only affect the ingredients that go into the smoothies but also affect the amount of people drinking the smoothies. According to Bill Winter, One of the risks in juice bars is seasonalityjuice bar sales plateau when the weather cools (Business Review Weekly, Australia 2001). II. General Environment: A. Economic Dimension: The market for smoothies has grown by more than 30 per cent each year since the mid-1990s (Ehlrich). Juice Smoothie Association (JASA) predicted back in 2001 juice bar sales would surpass $1 billion. Dan Titus, director of Juice Gallery Multimedia and JASA, also adds, We have been following the juice/smoothie segment for several years now and predict that 2002 will continue to exhibit positive growth and revenue picture (Business Wire, 2001). B. Technological Dimension: Astute Solutions , a leading provider of eCRM solutions, created the software program Power Center(tm) for management use in multi-channel customer contacts. PowerCenter is a powerful consumer response and tracking system that integrates multiple channels of communication and multiple customer databases (Business Wire, 2002). Incentive Systems is another technology that provides spreadsheet system. Nina McIntyre, vice president of worldwide marketing at Incentive Systems, says Potentially its data stream from point-of-sales systems, from cash registers systems, wherever [users] capture the transactions that are being measured. We can integrate with those software packages, the data flow into our incentive management system, and then we calculate the incentive payments (Managing Customer Service, 2001). Technological research studies have indicated that isoflavones (found in soy) may actually prevent the growth of estrogen-dependent breast cancer cells as r eported in March 2000 issue of the Journal Cancer Research (The Desert News). C. Political/Legal Dimension: Smoothie industry must follow regulations. Food and Drug Administrations (FDA) regulation is that foods must have to have at least 6.25 grams of soy protein per serving and must also meet other criteria in being low in fat, cholesterol, and sodium (The Desert News). Regulations enforced by OSHA also have salient stimuli to the industry. Federal and State regulations are also salient, regulations such as Equal Employment Opportunity Commission, Time Off to Vote, Federal Family and Medical Leave Act and California Labor Code. D. Social/Cultural Dimension: Smoothies have become an alternative in Americans health conscience. In recent past years, they have been conscientious about their fat-in-take. Smoothies provide a healthy indulgence packed with fruity flavors and nutrients that comply with societys taste and health conscience. Good health is the principle factor behind smoothie producers growing interest in soy bases for their products (Dairy Field). According to Liz Zamites, marketing manager of brand development for cold beverages, Baskin-Robbins USA, Glendale, Calif., The experience of watching a smoothie being made reinforces the perception that you are using quality ingredients, that its not full of preservatives and that there are actually fresh fruit in there. E. International Dimension: In Great Britain, diluted products masquerading as smoothies are capitalizing on the lack of product definition (PR Newswire, 2001). This is because British Soft Drinks Association does not recognize smoothies as its own category. Manufacturers are labeling drinking products smoothie just because they have fruit in them. III. Task Environment: A. Competitors: The smoothie industrys main competitors are; Fantasia Fruit Juice Company- its juices have herbal and vitamin supplements such as vitamin C and St. Johns wort (thought to have calming effect), reported to have been said by Barnhorn, their mission is to nourish the Midwest community we grew up in. Planet Smoothie-127 locations in 21 states and plans to open 30 more locations in the New Orleans area, Smoothie King- operates in vitamins and nutritional supplements retail, has 276 locations and was founded more than 30 years ago, annual sales of $60 million (Ronette King). ZiA Juice Co.- lower-cost alternative to Jamba Juice(Nations Restaurant News), ZiA has taken pride in providing Customerization and LifeSTYLING for its customers, ZiAs menu consist of signature fruit smoothies with supplements such as Siberian ginseng and soy protein, along with frozen coffee-blended beverages and freshly made fruit and vegetable juices (Nations Restaurant News). VIP Smoothies- although a newly developed company, has already developed a plan of attack on selected markets with product national initial distribution with FSI coupons and billboard and radio advertising (Frozen Food Age). Other notable competitors are Juice it Up and Juice Stop, they too have a share in dominating the market (Business Review Weekly- Australia). Freshens Smoothie Company- it is an Atlanta based company and has 500 stores in operation, which is becoming the nations fastest growing smoothie chain. Freshens has collaborated with MET-Rx and developed a full line of nutritional boost-ers especially designed for Freshens (Dairy Field). B. Customers: Dairy Field reports, Bucking the trend toward fatty on-the-go refreshments, todays consumers are reportedly slurping down smoothies with increasing frequency. A typical smoothie drinker has been narrowed down to ages between 18 to 34 with a higher household income, and is more likely to be female (Zamites). A survey conducted by AC Nielsen showed that, The intent to purchase was over 70 percent Among households with children under 18, it was over 80 per cent. What they found astounding from this survey was that almost half of those surveyed were not regular smoothie drinkers. The other half of the percentage drinks at least one smoothie a week. C. Suppliers: Whole Foods- has been identified as being the worlds largest retailer of natural and organic foods. According to Angi McMurray they feature foods free of artificial flavors, colors, sweeteners, and synthetic preservatives, and unbleached grains and grain products. Southwest Traders- a firm based in Temecula provides and delivers fresh fruits and vegetables such as oranges, lemons, carrots, celery, etc. It also supplies napkins and cups. Southwest is one of the nations largest suppliers to ice cream and yogurt shops and juice bars as reported in The Business Press/California. D. Regulators: Food and Drug Administration (FDA)- regulates the labeling of foods. As reported in The Desert News, in year 2000, the FDA allowed the soybean industry to say that 25 grams of soy protein eaten daily, in conjunction with a diet low in saturated fat and cholesterol, may reduce the risk of heart disease. This salient because since then soy protein has been in high demand and the smoothie industry quickly capitalized on this. For the average diet of 2000 calories a day, the World Health Organization, USDA and other leading authorities recommend that 55-60% of calories come from carbs, 10-20% from proteins, and 20-30% from fats. Plus, studies show that diets low in sodium, containing a good source of potassium, may reduce the risk of stroke and high blood pressure!(www.jambajuice.com) Occupational Safety Health Administration- oversees the well-being of employees and customers. Strict regulations are enforced constantly by OSHA inspectors. They make often visits to store sites unexpectedly. E. Strategic Allies: One known strategic ally is Amazon Advertising. Jamba Juice has teamed up with Amazon Advertising to handle branding and some advertising (ADWEEK). Lynda Pearson, creative director at Amazon in San Francisco said that Jamba is an ideal client because it offers people on the go on an appealing alternative to burgers and french fries. F. Labor Market: In an interview with Rodney Moore, district manager of Orange/San Diego 1, the labor market consist of ages 16 to 22 year olds. Jamba Juice takes pride on hiring employees that exemplifies the companys core values and attitude. G. Labor Unions: This is not a factor in this case because Jamba Juice employees are not unionized. H. External Owners: After an interview with Rodney Moore, Jamba Juice does have external owners but their identities are classified since it is still a privately owned company. B. Internal Environment: I. Owners: Given that Jamba Juice is a privately owned company; its internal owners identities are unidentifiable. II. Board of Directors: Only two of the five members of the board were identified. They are Kirk Perron and Paul Clayton. Kirk J. Perron Founder A visionary from the start, Kirks passion for health and fitness led to the creation of Juice Club. At the age of 27, he opened the first Juice Club store in San Luis Obispo in the spring of 1990. Since then, Kirk has contributed greatly to the organization by fulfilling various roles from Store Operator to CEO to Chairman of the Board. As the Founder, he is actively involved in company affairs ranging from store design to brand development, and currently chairs the Jamba Wellness Advisory Board. His passion and commitment to providing the best possible experience for all customers remains the standard to which Jamba Juice aspires every day (www.jambajuice.com). Paul E. Clayton, Jr. President and Chief Executive Officer Paul joined Jamba in February 2000. Prior to joining Jamba, Paul spent 16 years with the Burger King Corporation where he held a variety of marketing and general management positions. In 1994, Paul was appointed Senior Vice President, Worldwide Marketing and in 1997 he was appointed President, Burger King North America. He was responsible for operations, new store development, marketing and franchise relations for more than 8,000 restaurants in North America. Paul started his career as a Restaurant Manager for McDonalds in Bonn, Germany. He received his B.S.B.A from Boston University in 1980 and his MBA from the University of North Carolina at Chapel Hill in 1984. III. Employees: Employees from day one, go through an orientation of the company and the store, trained to be highly skilled in preparing smoothies and to be knowledgeable of ingredients and products, procedures and policies. Current 25 employees range from ages 16 to 26. Majority of the employees live within proximity of 5 miles to the store. The workforce is well diversified, employees having Asian/Pacific Islander background, African-American descent, and European ancestry. Employees from day one, go through an orientation of the company and the store, trained to be highly skilled in preparing smoothies and to be knowledgeable of ingredients and products, procedures and policies. The stores general manager is Carrie Gentry age 21. She has been with the company for 2 years and was transferred from Thousand Oaks. She now resides in Santee. Our newly acquired assistant general manager is Gary Smith age 25. He is new to the company.