Case Study 13
Booster Juice: Business in a Blender
Communication in Process
A new kind of bar is squeezing substantial profits out of the food and beverage industry in Canada—the juice and smoothie bar.Booster Juice is just one of many companies vying for this part of the beverage market, but it boasts that it’s the fastest-growing bar of its kind in Canada.
Booster Juice opened its first store in Edmonton in 1999, and now there are 135 locations across Canada, from Victoria, British Columbia, to St. John’s, Newfoundland. Of these, five are corporately owned and the other 130 are franchises. There are also four stores in the United States in Idaho, Arizona, California, and Utah.
The Booster Juice expansion that’s got the company fizzing with excitement, however, is a huge, 50-store master franchise agreement signed in 2006 with Saudi Arabia. Discussions are taking place with a number of master franchisee candidates throughout Europe as well as in South and Central America and the Far East.
All this began when two university students, Canadian Dale Wishewan and American Jon Amack, met at a school in Oregon. Wishewan, who calls himself “a plain old jock,” was attending school on an athletic scholarship, and he and Amack began discussing trends in the business world. Neither Wishewan nor Amack knew much about the restaurant or franchise business, but they saw this naïveté as an asset since they wouldn’t be restrained by past history. Both engineers, they had enough business expertise to recognize that if the juice/smoothie bar market was growing in the United States, it was only a matter of time until it popped open its lid in Canada. They wanted to be the first involved. That way, they felt they could grow the business according to the values they believed in. One of their most important beliefs was that quality was more important than profit, which they felt wasn’t always the case with U.S. stores.
Wishewan believes that the best way to grow a business for the long run is to focus on quality, something the store feels proud of achieving. But bringing a concept that was succeeding in the United States to Canada had its challenges. This wasn’t California! How would juices fit into a colder climate? Were Canadians going to be interested in quaffing down such a concept? Wishewan and Amack studied the American model and researched the Canadian market and tested hundreds of recipes. They knew what worked in the United States wouldn’t necessarily work in Canada, and they were determined to create a product suited to the Canadian climate and irresistible to northern taste buds. They were sustained by their vision that Canadians are health-conscious people who wanted alternatives to the high-sugar, high-fat beverages offered by most fast-food chains.
Since they began, juice/smoothie bars have quickly become an important segment in Canada’s competitive beverage sector. While the fast-food segment is growing at barely 5 percent each year, juice/smoothie bars are showing an effervescent annual growth that tops 25 percent, according to Entrepreneur magazine. South of the border, American juice bar giant Jamba Juice has over 500 stores nationwide and is a healthy contributor to an industry that has already topped $1 billion in that country.
In Canada, other juice/smoothie competitors are bubbling up everywhere. Jugo Juice, a Calgary-based company, opened its first store in 1998 and had opened 50 more by 2005. Although originally against offering franchises, Jugo Juice joined the franchise fray in 2002 and has grown by more than double, with stores spread from Victoria to Halifax.
Another Canadian juice bar company, Euphoria Smoothies, based in North Bay, Ontario, was started in 2004. According to Euphoria, more smoothies are consumed per capita in North Bay than anywhere else in Canada. Euphoria Smoothies has five licensees in Canada, 12 in the United States, and some in the United Kingdom, the United Arab Emirates, and India.
Booster Juice offers more than just a blend of various fruits and vegetables. Each drink is juiced up with some nutritional supplements to give an extra “boost.” For example, in the “Cold Warrior Booster,” there’s echinacea and goldenseal, two herbs reputed to build one’s immune system. The “Energy Booster” has a blend of Korean ginseng and bee pollen. There are over three dozen varieties of beverages on the menu, or customers can design their own drinks to please their individual tastes and/or energy needs. There are “Booster” drinks called “Fusion” and “Wilderness,” juice selections with names like “Ginger Hammer” and “Green Hornet,” and smoothies called “Terminator” and “Marathon.” Although Booster Juice outlets focus on liquid offerings, they also feature quesadillas, panini, and wraps to challenge the fast-food market.
As healthy as these drinks may be, Booster Juice says they are living proof that “great tasting” can be “great for you” as well. And the company wants people to know that drinks are not only healthy thirst quenchers but can be used as power breakfasts, workout snacks, and meal replacements.
Euphoria Smoothies says that in the next ten years, frozen drinks will experience rapid growth and become a $40 billion market—as large as the beer business and as popular as fountain and bottled drinks. No wonder juice/smoothie bar companies are bubbling up all over the place. Euphoria Smoothies says that sales being generated by juice bars and other retail venues are estimated to top $2 billion per year—a phenomenal number. The smoothie market has grown by more than 30 percent each year since the late 1990s and is not showing signs of slowing down.
Critical Thinking
•What kind of information should a company like Booster Juice gather to help maintain its market-leading position?
•List a variety of ways that information can be transmitted to franchisees. Which methods would be most likely to be effective and why?
•What are some ways that information can be presented to increase the possibility it will be read?
Process in Progress
Booster Juice Revisited
The founders of Booster Juice, Dale Wishewan and Jon Amack, believe it’s important to return profits to owners while making everyone in the business successful. Their dream is to bring as many people as possible along with them to financial independence. To that end, they are committed to offering their franchisees a great business experience. As Wishewan says, “We’ve always believed that providing customers with a healthy fresh alternative to fast food would draw the masses, but we had no idea it would attract so many franchise inquiries from across Canada! Our passion for the business and our absolute pleasure of bringing a great opportunity to people from diversified backgrounds is what drives us in making this one of Canada’s fastest-growing franchised businesses.”
Booster Juice prides itself on giving its customers and staff a “vibrant, energetic, upbeat, and fun new concept to make healthy selections in fuelling their bodies.” This approach, it believes, is what will make Booster Juice a substantial chain that will dominate the market. Currently, Wishewan and Amack own several stores themselves, so they are intimately involved with the day-to-day issues of running a juice/smoothie bar business. As they say, “We put our money where our mouth is.”
With its head office in Edmonton, Alberta, Booster Juice carefully examines site influences and data. Wishewan says site selection is often based on many factors, but sometimes comes down to gut instinct. Wishewan says a given location has “to fit in with the vision of what we do, it’s as simple as that.” Once a site has been selected, however, Wishewan and Amack do everything they can to make the store successful. They don’t rely on a formula alone, but try to make each store better than the last.
Once signed up, franchisees are provided with 12 days of training at the company’s head office. This includes some classroom time and hands-on experience at a real juice bar. Franchisees are taught product knowledge, business development, management strategies, and customer relations skills.
Amack and Wishewan worked hard to create an infrastructure that would promote quick expansion and came up with a strategic plan that could be readily adapted to a variety of situations. They moved quickly to secure prime locations and splashed vibrant, juicy colours on their storefronts. They wanted to create a juicy “feel” to their store environments and make them magnetic and energetic.
With so many juice bars flooding the market so quickly, the partners know they must stay at the forefront. As a result, they are always looking at new products. “We want to keep being ahead of the curve,” says Wishewan. “For example, we’ve just introduced a berry from Brazil that’s reported to be one of the Top Ten Super Foods in the world.” This berry, called the Zola açaí “provides the highest amount of antioxidants of any fruit on the planet and supports the environmental restoration of the rainforest as well,” says Wishewan. “This berry has been touted in People magazine and by Oprah. We like that. We see ourselves as visionaries and want to stay at the head of the pack.” In 2004 the anti-aging guru Dr. Nicholas Perricone proclaimed açaí to be the number one super fruit in the world.
Ideas like this are what makes Booster Juice so successful. And that success has been acclaimed. The company has received many awards, and Wishewan himself has received several, including the Ernst & Young Entrepreneur of the Year award in 2005 and three gold medals and one bronze medal at the prestigious Frankie Awards in 2004 for Franchise Marketing.
Critical Thinking
•How important to Booster Juice is the collection, organization, and distribution of up-to-date information regarding beverage trends, competition, and product development?
•Should Booster Juice monitor the Web sites of other juice/smoothie companies to find out what they are doing and how they are presenting themselves? Why?
•What kind of report would be required from Paul Beck, a Booster Juice employee assigned to organize a Walk-for-Health day? What organizational plan would the report follow?
Process to Product
Applying Your Skills at Booster Juice
Expansion is key to Booster Juice’s success. Within Canada, Booster Juice doesn’t limit its stores to just shopping malls—soon they will be in hospitals, universities, and airports. Products will also be available in supermarkets like Sobeys, which has just agreed to stock ready-made bottles of Booster Juice. Wishewan says he is negotiating with other major grocery chains as well.
Wishewan knows that at some point Booster Juice is going to saturate the Canadian market, so the company is planning a large expansion into the United States. “We only have three stores now, but when all is said and done, the U.S. will be our single biggest market in the world.” Wishewan says he can imagine having between 600 and 700 stores across the United States.
He knows there will be stiff competition south of the border. Jamba Juice, established in 1990, dominates the U.S. West Coast, with more than 525 outlets, while Smoothie King, headquartered near New Orleans, has more than 380 shops covering the East. Other popular U.S. chains include Freshens and Planet Smoothie.
Booster Juice, however, is negotiating with several countries overseas—Britain, China, and the United Arab Emiratesare all candidates. “We try to choose two to three new countries to go into per year,” Wishewan says. It costs as much as ten times more to set up in a foreign country—money needs to be spent on translations, product shipment, new menu development, and travel, to name just few expenditures, so it’s crucial that Booster Juice pick only the best options.
Nonetheless, Wishewan has a large vision: 2000 to 3000 stores across the planet. No one will ever go thirsty!
Your Task
You are Dale Wishewan’s assistant. He has asked you to help him evaluate which countries Booster Juice should consider expanding into. In order to do this, identify a dozen factors that he might consider when assessing a particular country. Then, pick a country and assess its viability by running it through the various factors on your list. Write a report about whether the company should proceed with expansion to this country. Make sure you list both the pros and cons of your decision.