Where's My Cheeseburger Smoothie?

Smoothie chain Jamba (Nasdaq: JMBA  ) has a blended cheeseburger, and it's not afraid to use it.

Jamba is taking the threat behind McDonald's (NYSE: MCD  ) recent rollout of McCafe smoothies seriously. It has spent the past few weeks executing a viral assault.

Three weeks ago, Jamba uploaded a gutsy faux commercial to Google's YouTube, promoting its new Cheeseburger Chill smoothie. With an infectious ukulele-backed jingle in the background, a couple of joggers walk into a Jamba Juice to have a cheeseburger ground down with ice in a blender.

Viewers are then encouraged to learn more about the new chunky concoction at CheeseburgerChill.com, where Jamba thankfully concedes that it's more Swiftian satire than a swift backfire.

"We're not getting into the burger business, but some burger chains are getting into the smoothie business -- which seems about as weird as a Cheeseburger Chill," the website confesses. Jamba then offers to accept all McDonald's smoothie coupons through this upcoming weekend.

It's a brilliant campaign on Jamba's part. The video is a hit, closing in on 300,000 views through YouTube.

Jamba didn't have this kind of sneaky promotional attack when Starbucks (Nasdaq: SBUX  ) rolled out its Vivanno smoothie line two summers ago. It has also never mustered much of a counter as Burger King (NYSE: BKC  ) , Sonic (Nasdaq: SONC  ) , and Yum Brands' (NYSE: YUM  ) Taco Bell introduced fruity slushee beverages.

It's different this time -- and Jamba knows it.

As a Jamba Juice regular (and shareholder), I was relieved when Vivanno insulted my taste buds. However, I'll confess to having gone through a few McCafe smoothies over the past month. The two flavors are no match for Jamba's wide menu. Where are the antioxidant boosts? Where's the fruity in-store aroma? However, Mickey D's drive-thru convenience and reasonable prices make it more than an acceptable proxy.

Jamba is right to hit below the belt, and it's better to make its point now.

There's always the outlying hope that McDonald's will simply educate the market. It will whet the appetite of folks who will then seek out the whole fruit splendor and broader options available through Jamba, Smoothie King, and that neat fruit stand by the corner.

However, it's always smart to hedge your bets -- and that's just what Jamba's doing by kicking a juggernaut while it's still in the blender-whirring crib.

Have you tried the new McCafe smoothies? What did you think? Share your critique in the comment box below.

Google is a Motley Fool Rule Breakers recommendation. Starbucks is a Motley Fool Stock Advisor selection. The Fool owns shares of Google. Forget about functional smoothies for a moment. Feed your head with a free 30-day trial subscription offer to any of these newsletters.

Longtime Fool contributor Rick Munarriz is about a ten-minute walk to a Jamba Juice, making that trek often. He does own shares in Jamba. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy, and it comes with a free immunity boost.


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  • Report this Comment On August 10, 2010, at 3:16 PM, rd80 wrote:

    By pointing out that McDonald's now sells smoothies, Jamba's commercial may help MCD more than Jamba.

    I don't know of a Jamba Juice anywhere near me. If I want a smoothie, McDonald's now offers the quickest, easiest way for me to get one. Yeah, MCD doesn't have all the flavors and you can't get the health additives that Jamba offers - but both MCD flavors are pretty good.

    MCD has hit a home run. I don't think the intent is to go head to head with Jamba - MCD could buy Jamba and barely dent cash on hand if it wanted. The objective is to sell a pricier, higher margin drink to millions of MCD customers and the roll out appears to be succeeding extremely well.

    I think you're right that MCD may help Jamba more than hurt it with this roll out by increasing the popularity of fruit drinks.

    Long MCD

  • Report this Comment On August 10, 2010, at 3:40 PM, TMFTheDoctor wrote:

    Rick, as a JMBA shareholder and a reader who respects your work, it's encouraging to hear you're onboard with Jamba too. I recall you didn't always have such faith in them.

    More to the point, I've actually heard SBUX saw higher sales after MCD started doing McCafe -- presumably MCD was just broadening the market and generating new customers for SBUX. One could see the same thing happening here with JMBA.

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