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Swot Analysis- Smoothies

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Mannat Brar

on 12 March 2014

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Transcript of Swot Analysis- Smoothies

The US smoothie market has grown rapidly over the last five years, driven mostly by the consumption habits of Americans who skip meals and often depend on snack foods as a substitute. Since smoothies offer healthier treat than other snack options, tastes good and also offer convenience and portability, the market is expected to grow at a rate of 10-13% in the next five years. The market is growing on a rapid pace. The five leading players in the US and Canada smoothie market – Jamba Juice, TCBY Systems, Smoothie King, Orange Julius and Surf City Squeeze.
The Market
Strength
The strength of the restaurant is that most people are getting aware day by day about eating healthy due to the in ever increasing diseases, so in this more aware population, an organic real fruit smoothie place will do really good as i feel that all the other smoothie stores have been over commercialized and have lost the sense of being healthy and are depending more on the taste now. Also, the smoothie market has lower barriers to entry because of lower capital investment. But in order to grow, what is required is the quality of the product and brand awareness. "Smoothie Panda" from Europe is known for its high quality product so I think it will do really well to please the new market.
Smoothie Panda
My smoothie restaurant is called the "Smoothie Panda" and it's logo is a panda drinking a smoothie. This chain is from Europe and is extremely successful there but it is now planning to come to North America.
Why this market?
The smoothie market has lower barriers to entry because of lower capital investment. But in order to grow, what is required is the quality of the product and brand awareness. Jamba Juice, the leader in the US smoothie market has clearly taken a lead over its competitors in terms of market share and most important, brand awareness. As a result of tremendous growth, many food chains, quick service restaurants and beverage companies are entering the smoothie segment by opening new stores. The growing interest of large beverage companies in this segment is mostly driven by the declining sales of soft drinks in the United States. There is a possibility of consolidation of the smoothie market, particularly resulting from the inevitable fallout of smoothie brands which will happen as the market starts to settle.
Swot Analysis- Smoothies
Fresh & Healthy
Weaknesses
There is a possibility of consolidation of the smoothie market, particularly resulting from the inevitable fallout of smoothie brands which will happen as the market starts to settle. Also the customers are getting more aware of the market around them, so they might think of this company as just another marketing gimmick that promotes healthy but has the same old chemicals and preservatives. Even though the smoothie market is growing, there will still be a portion of people who will not buy from this store because they think it is too expensive. Whereas the truth is that it is very expensive to get fresh and good quality fruits and veggies. There are also financial problems that the company might encounter. Costs usually total in the hundreds of thousands of dollars and are not considered prohibitive in terms of business capital. The barriers to entry increase exponentially for firms that wish to start their own franchising chain, since the number of company-owned locations among larger companies has been steadily declining. Also, new entrants into the franchising game will have to compete with the established brands and name recognition enjoyed by industry leaders like Jamba Juice and Smoothie King.
Opportunities
The economy right now is coming out of the recession that started in 2008, so people have more disposable income to spend on things like eating out. Having seen exponential growth of 159% in volume sales between 2005 and 2007, the smoothies market then saw a dramatic reversal in fortunes with a 36% decline between 2007 and 2009 as consumer spend became increasingly squeezed,but now that we are out of the recession, things will definitely be better. Fruit juices and smoothies often count toward people's target of consuming five portions of fruit and vegetables a day, creating a marketable health benefit. Also people are getting more aware day by day about their health which provides our company an opportunity to cash in on that. Recently, a comprehensive global report on Smoothies markets said that the world market for smoothies is projected to touch $9 billion by the year 2015. This is primarily driven by rising health consciousness among the people, on-the-go consumption convenience, and taste and naturalness offered by smoothies. Further, aggressive marketing campaigns and new product developments are also driving smoothies market growth.

Threats
One major factor that might be a threat to the smoothie industry is the high price of the products which represents the major detrimental factor to the popular acceptance of smoothies. Other major factors that limit the adoption of smoothies include limited product choice, and high fat and sugar content of smoothies. Present age consumers live in a global regulated society that is information-rich, health-aware, and time-poor. As a result, consumers demand more and more from the product consumed by them. Therefore, one of the major challenges faced by the smoothie manufacturers is the changing consumer preference. Also, many major companies like Jamba Juice in the US and Booster Juice in Canada have been known to buy any small companies that start out their own smoothie business, in the fear of competition.
Product: "Smoothie" Panda will specialize in juices created from pure & organic fruits with a different variet of fruits and many blended mixtures. There will be a set menu for many blends that the customer can choose or the customer can creat their own blend from the variety of fruits. Theree will also be many healthy toppings like yogurt bits, almonds, pecans and shredded coconut that the customer can put on their smoothie. The size of the cups will go from extra small, small, medium, large and jumbo.

Price: The prices will be varied from 5 to 15 dollars depenind on the size of the cup and the toppings that the customer chooses but their will be a special of the month that will be at a lower price.
Place: "Smoothie Panda will be located mainly in malls but there will be some independent stores in big cities like New York and Toronto where there is a lot of foot traffic. At the malls, it should be at the entrance, so people can enjoy their smoothie while they are shopping and are not tempted to buy anything else later.

Promotion: This chain should promote itself as being "healthy fine dining" as that might appeal to many healthy yet food loving efficianados. Their also should be some kind of a slogan for ex. "Always fresh, Always organic!" that captures people's attention. In the start, the chain muthe st advertise at a full pace through tv commercials, print ads and radio stations so people get aware of the chain. After, it has made its mark in the industry and the people know about "Smoothie Panda", it can take a more laid back approach.
Recommendation & Rationale
The global juice and smoothie bars market is all set to make a splash, reviving from the recent economic slump that caused the market to dry out for two years. Juice and smoothie bars today is one of the rapidly growing business opportunities worldwide with fresh juice outlets coming up in every nook and corner amidst increasing consciousness among consumers about healthy snacking. In this case, a unique organic fine dining style smoothie bar will definitely capture the consumer's attention. The company might have to be careful by keeping their prices reasonable and not coming under pressure from the other major giants. Other than that, I absolutely recommend "Smoothie Panda" to come into the US & Canada market.
Jamba Juice
Jamba Juice Company is a restaurant retailer specializing in smoothies. They have over 800 locations operating in 26 states, the Bahamas, Canada, Philippines, Mexico and South Korea. There are approximately 287 company-owned locations and 517 franchise-operated stores in the United States of America, in addition to the 45 international stores.
Jamba juice is unique in its own way because along with the normal fruit smoothies they also sell with fresh vegetables. They have smoothies for discount depending on if fruit is in season or not. Jamba Juice is located in both malls and independent stores in an area with heavy foot traffic.
Their smoothies are usually from 5 to 15 dollars with some exceptions on seasonal smoothies with discounts. Their promotion methods are very laid. They usually use flyers and in store promotions like "back to school smoothies" to promote their store.
Booster Juice
Booster Juice Ltd is Canada's largest chain of fresh juice and smoothie bars.[1] The chain specializes in smoothies composed of a pure juice, fruit sorbet or vanilla frozen yogurt, frozen fruit, fresh yogurt and ice. the company has grown to have 249 traditional and 36 non-traditional locations in Canada, 18 in India, 6 in the United States, 5 in Mexico, and 2 in the Netherlands. The smoothies offered by Booster Juice come with a choice of "boosters", or nutritional additives such as protein, echinacea, fibre, and other products such as ginseng or rosehip. Some drinks offered by Booster Juice contain less common food products, including Matcha & Açaí fruit. Booster Juice classifies the smoothies into eight categories, including high protein smoothies, berry smoothies, and tropical smoothies among others. There products are slightly higher priced as they contain some rare ingredients. Booster Juices can be found mainly as independent stores but are also in a lot of malls.
Smoothie King is a smoothie food retailer that caters blended fruit-based drinks. First opening in 1973 as a stand-alone vitamin shop in Kenner, Louisiana, Smoothie King now encompasses over 600 locations.Since 1989, Smoothie King has been named #1 franchise in their category 17 times by Entrepreneur Magazine. They are mainly situated in malls and their menu contains over 92 selections in smoothies making them one of the biggest selections. Their price point is relatively cheaper going from 4 to 15 dollar. Their most selling flavour is the "Caribbean Way" which includes fresh tropical fruits from the Caribbean
Smoothie King
The target market is very varied. The 18-24 and 25-34 age brackets are the main age groups for traffic with 34% and 31% respectively. Gender breakdown tends to focus on Females with 65% of searches being female vs. 33% male. 2% remains as
‘unknown gender’. This is because females are generally more concerned about their health and want to focus on healthy eating when they go out. Therefore, they choose options like smoothies when they go out. The target market will most likely be health conscious, motivated individuals who are determined to keep their health in check. The target market has to be middle class because smoothies can get relatively expensive if bought everyday so the consumer needs to have enough disposable income to afford them. The target market can be anywhere from in the cities to relatively rural areas because the locale really doesn't matter in this case because people anywhere can be health conscious and motivated, but it is recommended to stay in the cities, as people are farther away from the natural world and need something pure and organic to remind them of the country. Whereas, in the rural area, people are more connected with the land, as they have their own farms and gardens and can make their own smoothies.
Community Findings
I went to a local Booster Juice to look at the atmosphere. First of all, the booster juice wasn't busy at all, that is because it was situated in a location where there is not a lot of foot traffic (near staples, on Scott rd.) When I went in, there was only one customer in front of me and the lady making the smoothie took forever which tells us that "Smoothie Panda" needs to have a faster service so the customers don't get fed up. One thing I was surprised about was that the couple in front of me actually stayed and had their smoothie in the restaurant, which tells us that if there is better seating and proper cutlery for snacks, people are willing to stay back and enjoy their smoothie in the restaurant other than taking it for go. Also one thing I really liked was that the worker there made the juice in front of the customer which creates a type of trust between the company and the customer now that the customer knows that there are no preservatives or anything in the juice as it is made in front of their eyes.
International Market
The best compliment ever given to smoothie bars is that "they are the next Starbucks in UK" which absolutely describes their popularity in UK. Popular smoothie bars like Crussh, Hula, Baobab bar and Luscious have captured people's attention. At least one of them could be found in every corner. They are even more expensive in UK than they are here as they focus more on the green veggies aspect of the smoothies and that can get a bit expensive. They are mostly not situated in malls but have their own independent stores in places that get a lot of foot traffic and that works very well in places like London because most of the population travels to work on foot due to high traffic on cars. According to a report in the BBC "n a country where for a decade or more the cappuccino has ruled supreme, many people are now seeking a healthier alternative. Thus the race to enter the smoothie business."
Interviews
The old man
The Young Couple
The College Student
When i asked him if he likes smoothies. He blatantly said no and told me that he doesn't like anything that is remotely healthy, but he said that his doctor told him to eat and drink healthy and he is too lazy to make them himselves so he probably would buy it and would sit and drink there as he finds it too hard to walk
This couple is in their mid 20s and just had a baby. They told me that the prices of the smoothies would be a little too much for them to afford on a daily basis as they also have t provide for the baby. They did say that they liked the idea and if they were at a different stage of their life, they would definitely go to our smoothie bar.
She told me that she is trying to keep off the pounds and not get into freshman 15, so she would go to the smoothie bar as a healthier alternative to eat out. Alsoo, she said that she likes going for runs, so it would be nice to go for a smoothie after a workout. She did say that the location has to be in a place with high foot traffic.
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