What were you doing in 10th grade? Waiting to get your driver's license? Kirk Perron was thinking about his future and putting together a deal that would help launch the successful Juice Club chain. It sounds incredible, but Kirk Perron bought the real estate for the first Juice Club 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 Juice Club in 1990. 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. Today the Juice Club has more than 24 stores offering a wide variety of healthy drinks and snacks. Customers can choose from a variety of Juice Club specialties such as a Boysen¬berry Blitz or a Guava Gulp smoothie. 

THE IDEA

Walk into a Juice Club and you are confronted with almost two dozen choices for smoothies, additional natural juice blend options, and healthy snacks. Read about the benefits of raw fruit and vegetable juices from Juice Club's selection of affordable, interesting books by health industry authors. Check out the in-store Nutrient Analysis Book, showing a complete nutritional breakdown for all the Juice Club menu products. 

Smoothies are about 80 percent of the Juice Club's business. They are made with juice and fruit and often yogurt, sherbet, or ice milk. A typical smoothie gets most of its calories from carbohydrates and protein, providing a low- or no-fat, nutritious meal. Nutritional supplements from wheat germ to bee pollen are also available. The Juice Club offers customers up to two "Club Additions." Add more vitamins, calcium, or protein. How about adding some spirulina? A blue¬green micro-algae, spirulina provides a good source of B vitamins, iron, and protein.

As you sit at the counter in a Juice Club, you can watch friendly. well-schooled Juice Club employees whip. beat, and blend your smoothie right before your eyes. Prices range from $0.95 for an 8-ounce glass of a natural juice blend to $3.75 for the Ironman/Woman, the healthiest nondairy smoothie containing orange, straw-berry, and banana as well as about half of the Juice Club's "Club Additions." These Juice Club outlets are busy! The outlet near Stanford University typically has 50 customers waiting in line outside on Saturday mornings and reportedly takes in about $1.7 million per year, or more than $2,000 per square foot annually.

THE COMPETITION

Juice bars are one of the hottest new trends. Several California, Arizona, and Louisiana juice bar chains have ambitious plans for hundreds of new locations in the coming months. Barriers to entry are fairly low. Single store outlets or small chains within a city or region are common. 

THE MARKET

Juice bars have been around for decades, often in health food stores and gyms. Associated with what used to be a small group of intensely health-conscious customers, that small demographic group has boomed in recent years, fueling the market for fat-free foods, fitness equipment, and apparel. Many wonder. however, whether juice bars will go too far. There are doubts about whether a significant number of men will substi¬tute a healthful smoothie for a fat-laden fast-food lunch. 

However, the Juice Club is optimistic about the opportunities for expanding the market. About two¬thirds of Juice Club's customers are between the ages of 15 and 25 -not exactly the same demographic group as the traditional health-conscious baby boomer. Age and education level are important selection criteria for open¬ing new Juice Club 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. In fact, many current and planned Juice Club outlets are in college towns. 

THE ISSUES

Purists insist that the best drinks come from completely fresh products. 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. The Juice Club has developed its own frozen juice blends. 

As a response to this problem Michael Owings developed the California Juice Oasis concept, which utilizes bag-in-the-box "mother juices," such as apple, cranberry, and nonpulp orange, and frozen fruit to create bases for the various mixed drinks. Bar guns dispense the mother juices in four different ounce-based mea-sures for convenience and portion-size control. 

With fairly limited menus, juice bars are considered great as an add-on rather than a stand-alone retail establishment since they are usually not strong enough to draw huge volumes on their own. Personnel are important to the success of a juice bar-described as "bartenders" they have to be able to put on a good show for the customer. 

DISCUSSION QUESTIONS

1. Identify the external environmental factors that the marketing manager of the Juice Club should consider as he plans to a new juice bar near your university. Indicate whether these factors would tend to enhance opportunities or represent threats. 

2. Given your environmental analysis. Which environmental force is most critical for the Juice Club and why? 

3. Consider the likelihood of new entrants, barriers to entry, existing competitors, and substitutes. What recommendations would you make to the management of the Juice Club going forward?