Summer is prime smoothie-selling season for Jamba's (Nasdaq: JMBA ) Jamba Juice chain. On a hot day, a healthy blend of fresh fruit, natural juices, sherbet, protein-packed boosts, and a handful of ice makes for a refreshing treat.
If this were any other summer, Jamba would be charging full speed ahead with its marked-up beverages. But after Starbucks (Nasdaq: SBUX ) introduced its Vivanno line of smoothies, and with Caribou Coffee (Nasdaq: CBOU ) also getting into the chilled spirit with its blueberry and acai smoothies, Jamba decided to offer an aggressive discount during peak season.
The smoothie-whirring chain has rolled out a new line of all-fruit smoothies, which made their debut last week and sport a tempting $2.95 price tag. And now the company is offering an online coupon through its Jamba.com website, with which you can get two of the 210-calorie refreshers for the price of one through July 30.
Jamba and competitors such as Smoothie King haven't flinched as fast-food joints upgrade their beverage offerings. The smoothie specialists know that their quality will win out in those cases. After all, Jamba doesn't just serve up the sugary, processed fare you'll find at ice cream parlors or doughnut shops.
Smoothies from McDonald's (NYSE: MCD ) or Sonic (Nasdaq: SONC ) would just be taste-bud disappointments to those bred on the real deal. And don't even get me started on the Frutista Freeze drinks that Yum! Brands (NYSE: YUM ) began selling a couple of months ago at Taco Bell outlets. Despite the mango and strawberry flavors, these are really just glorified, tropical twists on the 7-Eleven Slurpee.
Starbucks, however, is going right for the jugular. The Vivanno drinks include organic fruit juice, protein supplements, and an entire banana in every blended drink.
Jamba is no slouch. It watches over 726 Jamba Juice outlets. Unfortunately, there are more than 20 Starbucks locations on the planet for every one Jamba Juice. If Jamba has struggled to turn a profit under a kinder climate, it will be all the harder to make things work when a juggernaut has a feasible "me too" product.
The smoothie chains can always cling to the survivalist upsides. Starbucks will educate the market. With just four flavors, the coffee giant can help create a new generation of smoothie-slurping aficionados who will then seek out the wider variety of standalone fruit-drink shops. Things could very well play out that way in the long run, but this summer appears shot for the near term. Jamba's hot summer has gone cold.
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