Stocking smoothies has been a no-brainer for the past few years. Led by the phenomenon that is Innocent, sales of the drinks grew 424% in value between 2003 and 2007, and 552% in volume, according to research firm Mintel.
As a drink that ticked the health, convenience and taste boxes, shoppers lapped it up - despite the hefty price tag. In fact, by 2007, there were more smoothies drinkers among the British population than non-smoothies drinkers.
But this year, all that has changed. The smoothies market has gone into freefall on the back of tighter consumer spending and, in the past few months, sales have been on the slide - even for Innocent. According to data from TNS, sales of smoothies in convenience stores and independents have more than halved year-on-year: sales value slumped to £250m and volume to 108m litres.
While accurate data on performance in the foodservice sector is more difficult to come by, anecdotal evidence points to a similar, dramatic turnaround, according to those in the industry. Smoothies are seen as a premium product, a treat. In the current climate, people will still treat themselves, say experts. So, why hasn’t this been the case for smoothies and what does it mean for the chiller cabinet?
Growth in the smoothies market has largely been driven by small to medium-sized enterprises, which have been more fleet of foot, adapting to trends and identifying niche selling points within the market. As Don Williams, CEO at brand consultancy, Pi Global, explains: "While money is cheap, the niche guys can afford to charge a premium." However, in the current climate, even the most die-hard fans of Innocent, for instance, may try cheaper own-label products.
"Innocent was built on a trend and, by their very nature, trends get replaced by another trend. When a trend becomes ’everyday’ the big-boys see dollar signs and start attacking the more niche brands with similar and often ’me-too’ offers at more real-world prices," says Williams. Given the economies of scale enjoyed by the likes of Tesco, this isn’t a surprising situation. But what can a small café or bakery do to sell products at more ’real world’ prices?
One option is to look at making smoothies to order, on the premises. These offer higher margins and provide the shopper with a more economical option - a win-win. The downside of this is that smoothies take time to make. Plus, there’s the waste to think of.
However, that’s if it’s fresh. What about using frozen fruit? In a product synonymous with health, the use of frozen ingredients may seem risky. A couple of years ago, perhaps it would have been. But consumer attitude towards frozen food is changing. A number of companies now provide pouches of frozen fruit for the smoothie trade and many are confident that their product can weather the economic storm that has hit their bottled cousins hard.
"The market for smoothies made from sachet solutions is growing," says Paul Ford, MD at ProJuice. "We’re not affected by the pre-bottled solution - we’re actually taking share from them, as more and more outlets are listing fresh smoothies on their menus."
Ford points to the fact that frozen sachets take "30 seconds" to prepare, require no front-of-outlet chiller space, have no waste and can be kept for two years. Investment in a smoothie machine is, of course, a prerequisite, but now is the "perfect time" to be thinking about it, argues Ford. "People often think that winter time is the worst time to be setting up a juice or smoothie bar, but the New Year is the perfect launch time," he adds.
The winter may traditionally be a tough time for smoothies, but January often bucks the trend, with people keen to get their five-a-day fix as conveniently as possible. How the smoothies are marketed, in shop, can be the difference between success and failure, however. "Do a special for the New Year and call it a Body Cleanser or Detox Special. Put it on a blackboard and make it seem quirky and people will be interested," says Ford.
Lucy Coleman, customer services manager at Love Smoothies, agrees. Love Smoothies sells 12 different smoothie ’sachets’, each offering around 2.7 of the recommended five-a-day; the range includes some products specially created for the winter months, including Beat the Bluesli and Winter Warrior. For Coleman, merchandising is key. "We spend a lot of time perfecting the products and always offer as much marketing material as possible," she explains.
Meal deals take the hassle out of lunch. The price point will, of course, depend on the customer base, but the ’buy a sandwich and get a smoothie for £X’ meal deals also work well. In January, the general trend will be for healthy sandwiches and salads, combined with smoothies and juices. But within that, men and women will want different things, explains ProJuice’s Ford. Women will be after light salads and smaller sandwiches, with smoothies based on fruits like mango. But there’s also an opportunity to target men, who have traditionally bought fewer smoothies than women. "For the men, keep it healthy, but make the sandwiches bigger and get fruits such as acai in the smoothies, which is good for energy levels."
The range of juices and smoothies now available is extraordinary. JP Juices was set up to totally focus on Fairtrade/ethical juices and smoothies. The main products relevant to bakers and sandwich shops are the JP Orange and Apple Juices, both of which are 100% Pure Juices in 500ml PET Bottles, with a retail price similar to a 500ml Coca-Cola bottle. JP Juices has found that, particularly for a lunchtime drink to go with a sandwich, it is a popular choice. The juices are ambient and do not need to be stored or transported chilled, but are best sold from a chiller. They are made from concentrate which means that the water is evaporated off in the country of origin and then water is added back at the time of production, resulting in a lower carbon footprint as ’water’ is not being transported across the Atlantic.
"We believe in simple terms. Customers appreciate good-tasting Fairtrade and ethical food products that are also competitively priced and this is what we try to achieve with our customers," says Tim Kearns, director, JP Juices. The firm, which also offers 200ml bottles, as well as one-litre Fairtrade orange and apple versions, supplies both direct to bakery chains and also through foodservice wholesalers in the UK.
JP Juices has also developed two chilled short shelf-life smoothies in 250ml PET bottles, expected to launch early in 2009. "The products not only offer bakers an ethical product but also a commercially sound proposition to help build their revenues," says Kearns.
With the broad choice available, there’s no reason for the smoo-thies and juices market to feel quite so blue about the future. Sales may be falling at retail level, but there’s plenty of opportunity, crea-tivity and sales left in foodservice for the right products.
=== Fresh squeezing more sales ===
While the success of the smoothies market lies in ever-wilder flavours and tastes, for juices it’s all about tradition. Step forward, orange and apple juice. Both are traditional favourites and, even at the premium, freshly squeezed end of the market, can cost 60% less than a smoothie. As such, freshly squeezed juices have enjoyed surging sales in the past year, albeit from a very small base. Andrew Ovens, group marketing manager at Johnsons Juice Co, gives his tops tips to ensure your juice sales keep up with that trend:
1) Timing: orange juice is a morning drink, whereas apple is drunk in the afternoons, or with lunch. So, don’t be afraid to change the balance of orange versus apple just before the lunchtime rush.
2) Colour: people shop with their eyes, so don’t have three juices of the same colour; create a rainbow effect.
3) Variety: you don’t want any more than three juices and three smoothies in the chiller because otherwise you could end up with out-of-date stock. Have two flavours you stick with and swap the other, depending on the time of year/customer base.
4) Size: don’t rule out 500ml; people see it as more economical and sharing is a big trend.
5) Deals: meal deals are an excellent way to drive sales and keep your customers happy in terms of price and convenience.