When James D. White came on-board with Jamba Juice Co. in December 2008, same store sales dipped 8 percent and the company lost $149 million for the year. The recession had prompted consumers to cut discretionary spending, and smoothies just weren’t considered essential.
Management created a road map to get the business back on track.
“We made a commitment that we’d effectively turn the company around in a three-year-time horizon,” says White, chairman, president and CEO. “I’m happy to report that we completed the turnaround. In 2012, we registered our first year of profitability as a public company.”
That included a 5 percent increase in same store sales. Jamba Juice remained profitable in 2013, although same store sales were flat to slightly up.
Here’s how White and Jamba Juice developed a plan and expanded offerings to set the stage for the turnaround.
Strategies for growth
Management needed to develop a plan that would allow Jamba Juice to grow and return to profitability within three years.
Key to the turnaround was creating the blend plan, which drove strategic choices that were made. First up was facilitating fast growth through aggressive franchising and a move away from the core portfolio of company-owned stores.
“By 2011, we were in the middle of refranchising or selling company stores to become more of a franchise model. Today, roughly 35 percent of our locations are company owned,” White says. “That significant shift in the business model gave us the opportunity to accelerate growth, leveraging local partners in specific geographies.”
Jamba Juice added more than 30 locations in the United States in 2013 and expects to open 50 more this year. Currently, there are more than 800 Jamba Juice stores across the country.
A second component of the blend plan addressed the product portfolio and the creation of more “better for you” products.
“We added products like steel-cut oatmeal, which has been a hit with consumers,” White says. “We added more fruits and vegetables to our smoothie lineup. We also added more food items that pair well with the smoothies.”
Vegetables like kale, beets and cucumbers were added to the menu as items to be blended or juiced.
“Those have become increasingly popular as consumers look to cleanse or add healthier on-the-go solutions to their diet,” he says.
Another component of the blend plan involved expanding into international markets — Jamba Juice went from zero to 50 international locations in a 2½-year span, with the 50th store opening in early 2014.
Jamba Juice executives started the process by picking about a dozen potential markets to explore — including Canada, Mexico, South Korea and the Philippines — prioritizing them and then looking for partners.
“Partners typically have an existing restaurant or retail holding that Jamba Juice would complement,” White says. “In South Korea, our partner, SPC Group, is a multi-billion dollar company that runs 4,500 restaurants. We have a commitment with them to build 200 locations in South Korea over a decade.”
The company expects to hit the century mark in international locations before the end of 2014, with a major focus in Canada and the Philippines.
“Mexico is the fourth market where we have a commitment to build new stores. We expect our first stores to open in Mexico in early 2014,” White says.
He expects Jamba Juice to have about 1,500 locations internationally in the next decade.
“A significant portion of agreements are lined up already with the first four initial markets. We’ll announce other international markets this year, which we’re excited about,” he says.
A final piece of the blend plan was JambaGO, which was piloted in schools to deliver healthier solutions for students. Whether self-service or behind the counter, the dispensers feature high-quality smoothies, White says.
While JambaGO remains heavily focused on schools, the dispensers will also be located in Target stores as part of a recently announced deal.
“Target is a perfect fit for our brand. There’s a good complement between the Target brand and the Jamba brand, and an overlap of customers,” he says.
Keeping management focused
Having a focused agenda, and continually refining it, is a central part of the management philosophy at Jamba Juice.
Focusing on core stores and core operations, including the addition of new menu items, resulted in 2½ years of same store growth until a dip in the third quarter of 2013.
“But that was still at the top of our industry from a performance perspective,” White says, acknowledging that having a focused agenda was critical to the company’s growth.
Management also refined the agenda on a regular basis, although emphasis was placed on keeping it limited to only a handful of tasks.
“You tend to add more things to the agenda over time. If you can keep a tighter agenda of three to five items, that’s about all most management teams can focus on at one time,” he says.
It’s also important to ensure that the right team, with the necessary skills, is in place to execute the plan — and tying that team to the key set of metrics that drive the overall growth strategy.
“One of the ways we were able to pull off the great success we’ve had over the last several years is being very aligned and very focused as a management team around the growth priorities,” White says.
Jamba Juice is on what he calls version 3.0 of a three-year strategic plan that guides choices made around the business, which is broken down into annual operating plans that management reviews on a regular basis.
“We do that every week and it keeps us aligned both on the close, short-term, quarterly milestones that need to be accomplished to deliver the annual plan, but it also keeps us very tightly focused on the longer-term, multi-year game plan,” White says.
On a monthly or quarterly basis, the team takes a more lengthy look at longer-term, annual or multi-year strategies, to see if any adjustments are needed to make sure resources are lined up behind growth initiatives with the highest rates of return.
“One example would be how we’ve recently taken several of our growth initiatives that would have been incubated in various parts of the company and formalized some of those, and created standalone business units with their own sets of resources to maximize those opportunities,” he says.
Listening to customers
Jamba Juice develops its strategy based on input from a variety of sources, but always takes feedback from customers into account.
“We try to make sure to embed the voice of the customer in every choice, every decision we make, from the launch of our oatmeal platform to the work we’re doing around whole food blending and juicing,” White says.
JambaGO, for example, was developed after talking to school administrators and parents who wanted better nutritional options for students. But it’s not the only program that the company developed from listening to customers.
“Earlier this year, we launched the Jamba First for Kids platform, which moms had been asking us to do for some time,” White says.
Jamba Kids™ meals each contain 2½ servings of fruits and vegetables and a serving of whole grains. There are four smoothie options and two food choices — a Pizza Swirl and Cheesy Stuffed Pretzel.
The kids menu has great growth potential, according to White.
“The kids platform in our stores in growing, and we’re thrilled about the work we’re doing in schools,” he says.
White envisions Jamba Juice playing a leadership role in promoting nutrition for children and supporting parents with better choices for their youngsters.
“We just hosted a town hall related to healthy choices, better-for-you products, and physical fitness for kids in conjunction with the University of San Francisco and the GENYOUth Foundation,” White says.
Success of the kids platform, launched because of consumer demand, illustrates the importance of listening to customers.
“For most businesses, particularly consumer-oriented businesses, you can’t ever have too much input from the consumer,” White says.
That means mining various inputs available to marketers, including social media, to reach out and engage customers that can help shape how solutions and products are built.
“We talk a lot about big data and how to take all of the inputs, whether that’s social media from various channels or other ways we reach out to the customers from a loyalty perspective,” White says.
In addition to listening to customers, Jamba Juice looks at trends worldwide.
“We try to integrate the ideas that make the most sense for the role we see ourselves playing in the world, which is about making better-for-you, great-tasting products,” he says.
The company takes consumer feedback, global trends and other inputs and mixes them together in formulating strategy. White sees opportunity for far more growth on the horizon.
“There is a fair amount of data to suggest that the consumer trend for healthier products, investing more in the foods they put in their bodies from a healthy fuel perspective, is moving well beyond a niche to a big mega trend that will really drive the marketplace moving forward,” White says.
The premium juice category alone is a $5 billion business that has been growing annually at a rate of 4 to 8 percent, he says.
“Jamba Juice is on the forefront of that moving forward,” White says. “We love the early response to the premium juice offering that we’re starting to roll out and we will accelerate the rollout of our whole food juicing and blending platform in 2014.” ●
Takeaways:
- Keep management agendas focused.
- Find good partners in international markets.
- Listen to your customers.
The White File:
Name: James D. White
Title: Chairman, president and CEO
Company: Jamba Juice Co.
Born: St. Louis, Mo.
Education: He received a bachelor’s degree from the University of Missouri and a master’s degree in business administration from Fontbonne University.
What was your first job and what did you learn from it? I was a busboy at a burger joint called Jacks Are Better. I learned the value and importance of two things: hard work and showing up on time; and providing great guest service. Those things have helped shape my work over a 30-year career.
What is the best business advice you ever received? My parents taught me the value of hard work and effort. The other lesson was becoming a student of business and staying in a mode of constantly learning. That’s been an accelerator from a career perspective.
What are your favorite Jamba Juice products? My favorite smoothie is the Aloha Pineapple; my favorite food item is the steel-cut oatmeal; and the new lineup of premium juices — any of them with kale are my absolute favorites.
If you could speak with anyone from the present or past, with whom would you want to speak with? Warren Buffet is on my bucket list. His wealth of experience running great companies over time would be fascinating to break bread over.
