Jamba Juice is a chain of stores selling nutritious, healthy juices, smoothies, and snacks. The Jamba Juice case illustrates how environmental forces help to shape opportunities for organizations as well as identify potential threats and problems that must be faced. This case also raises some interesting issues with respect to how broad the appeal for Jamba Juices products may be.

Conduct an environmental scan for Jamba Juice as it considers a new juice bar to open near your university. Identify factors that you think have an impact on the juice bar market and indicate whether these factors would tend to enhance opportunities or represent threats.

• Given your environmental analysis, which environmental force do you believe is most critical for Jamba Juice and why.
• Examine the competitive environment for juice bars. Consider the likelihood of new entrants, barriers to entry, existing competitors, and substitutes. How would you summarize the current competitive environment?
• Do you think that the juice bar phenomenon is a fad or rooted in some fundamental environmental and market forces? Why?

**Case D-3 Jamba Juice: Scanning the Marketing Environment**

What were you doing in 10th grade? Waiting to get your drivers license? Kirk Perron was thinking about his fu- ture and putting together a deal that would help launch the successful Jamba Juice chain. It sounds incredible but Kirk Perron bought the real estate for his first juice bar when he was in 10th grade. He borrowed money from a high school counselor, the librarian, and his school bus driver to put together the $12,000 down payment.

THE COMPANY

Kirk Perron opened up his first operation as The Juice Club in 1990 in San Luis Obispo, California. He hit on the idea for a convenient, delicious, healthful food store on a long weekend bike ride. An avid cyclist with a life- long interest in health and nutrition, he wanted to offer an alternative to typical fast-food fare. The idea was a hit and quickly spread. In 1995, the company changed its name from The Juice Club to Jamba Juice. Today Jamba Juice has more than 700 stores nationwide offering a va- riety of healthy drinks and snacks. Jamba Juice is consid- ered the industry leader in the smoothie market, and Perron predicts that one day Jamba Juice will be as big a brand as Coca-Cola.

THE IDEA

Jamba Juice is all about healthy food and fun. Jamba is from an African word that means to celebrate. Walk into a Jamba Juice store and customers can choose from a wide variety of Jamba Juice specialties including smoothies, fresh-squeezed fruit and vegetable juices, breads, and pret- zels. Jambas commitment to healthy products is reflected in its mission statement, Enriching the daily experience of our customers, our community, and ourselves through the life-nourishing qualities of fruits and vegetables.

Smoothies are the bulk of Jamba Juices business. They are made with juice and fruit and often yogurt, sher- bet, or ice milk. A typical smoothie gets most of its calo- ries from carbohydrates and protein, providing a low- or no-fat, nutritious meal. Jamba smoothies are designed to meet heart healthy FDA requirements. Nutritional sup- plements called boosts, such as energy juice boost, containing ginseng and gingko biloba, and immunity juice boost, with echinacea and antioxidants, are avail- able and can be added to smoothies. Jamba Juice also re- cently added a new low-calorie drink, the Enlightened Smoothie, to its menu. Learn more about Jamba at www. jambajuice.com.

As you sit at the counter in a Jamba Juice, you can watch friendly, well-trained Jamba Juice employees whip, beat, and blend your smoothie right before your eyes. Stores also feature nutrition centers where custom- ers can get a complete nutritional breakdown for each product. Outlets also feature a merchandising area, which has Jamba Juice juicers, mugs, hats, and T-shirts.

THE COMPETITION

Juice bars have been part of a growing trend. Barriers to en- try are fairly low. Single-store outlets and small chains within a city or region are common, although Jamba has sev- eral large competitors. New Orleansbased Smoothie King, for example, has 580 locations in 32 states, and Atlanta- based Planet Smoothie has more than 125 stores in 20 states. Other competitors include Juice Stop, Juice It Up!, Surf City Squeeze, and Orange Julius. Jamba Juice has positioned it- self as a replacement for typical fast-food fare. This means it also considers fast-food restaurants indirect competitors.

Jamba has had to fight to maintain its trademark in a competitive market. Several years ago a San Francisco Juice bar called Jammn Juice was forced to change its name after Jamba complained that Jammn Juice and its animated fruit and vegetables were too close to the Jamba trademark and logo.

THE MARKET

Juice bars have existed for decades, often in health-food stores and gyms, and were associated with what was a small group of intensely health-conscious customers. That small demographic group boomed in recent years, fueling the market for fat-free foods, fitness equipment, and apparel. There has also been an increasing level of health consciousness among society generally. However, the consumer always talks thin and eats fat, according to Allan Hickock, an industry analyst with Piper Jaffray.

However, Jamba Juice is optimistic about the opportuni- ties for expanding the market by replacing fast food with good-for-you food. Retail sales of juice and smoothies ex- ceeded $1.2 billion in 2006, compared with $552 million in 2000. About two-thirds of Jambas customers are be- tween the ages of 15 and 25not exactly the same demo- graphic group as the traditional health-conscious baby boomer. Age and education level are important selection criteria for opening new Jamba Juice outlets. Kirk Perron believes that the more highly educated potential customers are, the more likely they will be to stop in for a nutritious smoothie

Alternate Case In fact, many of current and planned Jamba out- lets are in college towns, and partnerships have been formed to open outlets in universities and airports. You can find Jamba in both the Los Angeles and San Francisco airports and on campus at the University of North Carolina, George Washington University, and the University of NevadaLas Vegas, among others. Jamba also has a licens- ing agreement with Whole Foods Markets, a partner that shares Jambas values and commitment to healthy living.

THE ISSUES

Purists insist that the best drinks come from completely fresh produce. Fresh produce can be hard to work with to provide consistent-tasting drinks. Also, the price of fresh produce can change drastically throughout the year.

With fairly limited menus, juice bars are considered great as an add-on rather than a stand-alone retail establish- ment because they are usually not strong enough to draw customer traffic on their own. Personnel are important to the success of a juice bardescribed as bartenders, they have to be able to put on a good show for the customer.

There is a seasonality effect for smoothie and juice operators. For example, in northern climates, operators in enclosed downtown skyways or mall locations often see their business fall off in the summer when people are outdoors walking around. Business surges in the winter.