Smoothies - US - March 2008

Published by: Mintel International Group Ltd.

Published: Mar. 1, 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 Freshëns fresh

Figure 17: Freshëns 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 48: Incidence of smoothie consumption, by type, 2005, 2006, and 2007

Figure 49: Incidence of smoothie consumption, by type, by region, December 2007

Types of smoothies consumed most often

Figure 50: Smoothie type consumed most often, by gender, December 2007

Figure 51: Smoothie type consumed most often, by age, December 2007

Figure 52: Smoothie type consumed most often, by region, December 2007

Frequency of use

Figure 53: Smoothie consumption frequency, by household income, December 2007

Figure 54: Smoothie consumption frequency, by race/ethnicity, December 2007

Figure 55: Smoothie consumption frequency, by presence of children in the household, December 2007

Brands used

Figure 56: Made-to-order smoothie brands drunk in the last three months, 2005, 2006, and 2007

Figure 57: Made-to-order smoothie brands drunk in the last three months, by region, December 2007

Bottled RTD smoothie brands used

Figure 58: Bottled RTD smoothie brands drunk in the last three months, 2005, 2006, and 2007

Reasons for drinking smoothies

Figure 59: Main reason for drinking smoothies, by age, December 2007

Figure 60: Smoothies versus yogurt drinks, by age, December 2007

Usage barriers

Figure 61: Reasons for not drinking made-to-order smoothies, by age, December 2007

Figure 62: Reasons for not drinking made-to-order smoothies, by HH income, December 2007

APPENDIX: TRADE ASSOCIATIONS

Abstract

• The core customer that marketers are neglecting, and how to reach this group
• What chains should be doing to differentiate their brands
• How expansion into healthy snacks and light meals has impacted the market, and why some chains won’t do it
• The two distinct sets of growth drivers, one influencing the made-to-order segment and one fueling the ready-to-drink segment
• How the industry is poised for transformation as boundaries between segments begin to blur
• Who is circumventing the problem of seasonality in the smoothies market
• Upcoming changes in product development, and why it’s necessary to advance the category
• Consumers’ disinclination to drink smoothies

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