Smoothies - US - March 2008

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• Data sources
• Sales data
• Consumer survey data
• Abbreviations and terms
• Abbreviations
• Terms
• Executive Summary
• In a nutshell
• Competitive context
• Other beverages offer appealing alternatives to smoothies; consumer awareness is key
• Foodservice providers add smoothies to their menus
• MTO smoothies venture "beyond the four walls"
• Market driver: healthier lives on the horizon
• Market driver: higher-than-average consumption rates among Hispanics
• Market driver: youth
• Segment performance
• Proliferation benefits MTO market
• MTO companies should view unit growth and food rollouts with caution
• Value pricing may separate MTO winners from also-rans
• Functional ingredients are innovation benchmark
• Co-branding: It' s who you know
• New products drive RTD sales
• Naked, Bolthouse, and Odwalla win with functional emphasis
• Retailers hitch their smoothie wagons to the MTO star
• Consumer summary
• Market Size and Forecast
• Key points
• MTO competition will demand honing brand identities
• Innovation key to growth
• Hispanics and healthfulness to drive sales
  • Figure 1: Total U.S. sales and forecast of smoothies at current prices, 2002-12
  • Figure 2: Total U.S. sales and forecast of smoothies at inflation adjusted prices, 2002-12
• Competitive Context
• Key points
• Other beverages offer appealing alternatives to smoothies; consumer awareness is key
• Rival: Functional beverages
• Rival: Sugar-free beverages
• Rival: Yogurt drinks
• Foodservice providers add smoothies to their menus
• Caveats to growth
  • Figure 3: Top ten restaurants, by number of smoothie menu items, Q1 2006, Q3 2006, and Q3 2007
• MTO smoothies venture "beyond the four walls"
• Commodity price increases pressure industry
• Segment Performance
• Key points
• Proliferation benefits MTO market
• New products drive RTD sales, but MTO more innovative
• Crossover will transform the competitive environment
  • Figure 4: U.S. sales and forecast of smoothies at current prices, by segment, 2002-12
  • Figure 5: U.S. sales of smoothies, by segment, 2005 and 2007
• Segment Performance--Made-to-Order Smoothies
• Key points
• Growth with caveats
• Food can help--but tread with care
  • Figure 6: U.S. current sales and forecast of made-to-order smoothies, 2002-12
• Segment Performance--Packaged Smoothies
• Key points
• A marked preference for refrigerated over shelf stable
• New and functional products grow the segment
  • Figure 7: U.S. current sales and forecast of packaged smoothies, 2002-12
  • Figure 8: U.S. sales of packaged smoothies, refrigerated vs. shelf stable, 2002-07
• Market Drivers
• Setting the stage: healthier lives on the horizon
• Broad-based government action may spur healthier eating habits
• Adult obesity rates plateau
• Enter smoothies: healthy appeal
  • Figure 9: Main reason for drinking smoothies, December 2007
• Hispanics exhibit higher-than-average consumption rates
  • Figure 10: Incidence of smoothie consumption, by race/ethnicity, December 2007
• Young adults are avid users
  • Figure 11: Incidence of smoothie consumption, by age, December 2007
• Target smoothie consumers likely courted by other beverage purveyors
• Leading Made-to-Order Smoothie Companies
• Key points
• Smoothies called upon to perform
• Co-branding: It' s who you know
• Value pricing may separate winners from also-rans
  • Figure 12: Smoothie prices, Q3 2006 versus Q3 2007*
• Food, glorious food
  • Figure 13: U.S. sales of made-to-order smoothies 2005 and 2007
• Made-to-Order Smoothie Company Analysis--Jamba Juice
• Key points
• From MTO to RTD
• The most important smoothie of the day
• Frequency follows function
  • Figure 14: Jamba Juice sales, units, and sales per unit, 2005-07*
  • Figure 15: Jamba Juice top 10 menu items, by ingredient and beverage flavor, Q3 2007
  • Figure 16: Smoothie prices, Jamba Juice, Q3 2006 versus Q3 2007*
• Made-to-Order Company Analysis--Freshëns
• Key point
• Rebranding incorporates more concepts
• Re-imaging keeps Freshën fresh
  • Figure 17: Freshën U.S. unit growth, 2005, 2006, and 2007
• Made-to-Order Company Analysis--Smoothie King
• Key points
• Chain to re-establish focus on functional roots
• Smoothie King no sandwich shop
  • Figure 18: Smoothie King sales, units, and sales per unit, 2005-07
  • Figure 19: Smoothie King top 10 menu items, by ingredient and beverage flavor, Q3 2007
  • Figure 20: Smoothie prices, Smoothie King, Q3 2006 versus Q3 2007*
• Made-to-Order Company Analysis--Planet Smoothie
• Key points
• Raving Brands reveals aggressive expansion plan
• Planet Smoothie ramps up with SoBe Adrenaline Rush
• Eco-strategy distinguishes the brand
  • Figure 21: Planet Smoothie sales, units, and sales per unit, 2005-07*
  • Figure 22: Planet Smoothie top 10 menu items, by ingredient and flavor, Q3 2007*
  • Figure 23: Smoothie prices, Planet Smoothie, Q3 2006 versus Q3 2007*
• Packaged Smoothies--Brand Share Analysis
• Key points
• Naked' s functional emphasis pays off
• Bolthouse, Odwalla, too, benefit through benefits
• V8 Splash all but abandoned
• Coca-Cola acquires fast growing smoothie brand
  • Figure 24: FDM brand sales of ready-to-drink smoothies in the U.S., 2006 and 2007
• Brand Qualities
• Jamba takes it to the next level
• Innovation and Innovators
• Functional ingredients propel packaged segment
  • Figure 25: Number of menu items, by functional ingredient, Q1 2006, Q4 2006, and Q3 2007
  • Figure 26: FDM brand sales of select ready-to-drink smoothies in the U.S., 2005-06
• In search of satiety
• Combating seasonality
  • Figure 27: Main reason for drinking smoothies, 2007
• Packaged Smoothie Retail Channels
• Key points
• Retailers hitch their smoothie wagons to the MTO star
• Store-within-a-store concept could cannibalize packaged--or excite interest in RTD
  • Figure 28: U.S. sales of packaged smoothies, by retail channel, 2005 and 2007
• Advertising and Promotion
• Overview
• Healthy/natural
• Jamba: "Put the good in your morning"
• Smoothie King' s joint partnership to combat childhood obesity
• Naked Juice blends activism with wholesome goodness
• Robeks wages America' s Wellness Challenge
• Hip/fun
• Reminder: It' s summer
• Juice It Up!
• Social consciousness
• Planet Smoothie promotes eco-friendly practices
• The Consumer: Smoothie Usage
• Smoothie consumption
  • Figure 29: Incidence of smoothie consumption, by type, December 2007
  • Figure 30: Incidence of smoothie consumption, by type, by age, December 2007
  • Figure 31: Incidence of smoothie consumption, by type, by race/ethnicity, December 2007
• The Consumer: Smoothie Frequency of Use
  • Figure 32: Smoothie consumption frequency, by gender, 2005, 2006, and 2007
  • Figure 33: Smoothie consumption frequency, by age, December 2007
• The Consumer: Reasons for Drinking Smoothies
  • Figure 34: Main reason for drinking smoothies, 2005, 2006, and 2007
  • Figure 35: Smoothies versus yogurt drinks, by gender, December 2007
• The Consumer: Smoothie Usage Barriers
• Made-to-order smoothies
  • Figure 36: Reasons for not drinking made-to-order smoothies, by gender, 2005, 2006, and 2007
• Bottled RTD smoothies
  • Figure 37: Reasons for not drinking RTD smoothies, by gender, 2005, 2006, and 2007
  • Figure 38: Reasons for not drinking RTD smoothies, by age, December 2007
• Race and Ethnicity
  • Figure 39: Incidence of smoothie consumption, by race/ethnicity, December 2007
  • Figure 40: Smoothie type consumed most often, by race/ethnicity, December 2007
  • Figure 41: Smoothie consumption frequency, by race/ethnicity, December 2007
  • Figure 42: Main reason for drinking smoothies, by race/ethnicity, December 2007
  • Figure 43: Smoothies versus yogurt drinks, by race/ethnicity, December 2007
  • Figure 44: Reasons for not drinking made-to-order smoothies, by race/ethnicity, December 2007
  • Figure 45: Reasons for not drinking RTD smoothies, by race/ethnicity, December 2007
  • Figure 46: Made-to-order smoothie brands drunk in the last three months, by race/ethnicity, December 2007
  • Figure 47: Bottled RTD smoothie brands drunk in the last three months, by race/ethnicity, 2007
• Appendix: Other Useful Consumer Tables
• Usage
  • Figure 63: Incidence of smoothie consumption, by type, 2005, 2006, and 2007
  • Figure 64: Incidence of smoothie consumption, by type, by region, December 2007
• Types of smoothies consumed most often
  • Figure 65: Smoothie type consumed most often, by gender, December 2007
  • Figure 66: Smoothie type consumed most often, by age, December 2007
  • Figure 67: Smoothie type consumed most often, by region, December 2007
• Frequency of use
  • Figure 68: Smoothie consumption frequency, by household income, December 2007
  • Figure 69: Smoothie consumption frequency, by race/ethnicity, December 2007
  • Figure 70: Smoothie consumption frequency, by presence of children in the household, December 2007
• Brands used
  • Figure 71: Made-to-order smoothie brands drunk in the last three months, 2005, 2006, and 2007
  • Figure 72: Made-to-order smoothie brands drunk in the last three months, by region, December 2007
• Bottled RTD smoothie brands used
  • Figure 73: Bottled RTD smoothie brands drunk in the last three months, 2005, 2006, and 2007
• Reasons for drinking smoothies
  • Figure 74: Main reason for drinking smoothies, by age, December 2007
  • Figure 75: Smoothies versus yogurt drinks, by age, December 2007
• Usage barriers
  • Figure 76: Reasons for not drinking made-to-order smoothies, by age, December 2007
  • Figure 77: Reasons for not drinking made-to-order smoothies, by HH income, December 2007
• Appendix: Trade Associations