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One Company Is Capitalizing on the Two Biggest Food Service Trends

Source: Jamba

There are two big trends impacting the restaurant industry today: healthy living and improving customer satisfaction through the use of technology. The health and wellness trend has hurt sales at quick service restaurants, or QSRs, and soda companies, prompting them to introduce healthier alternatives. Meanwhile, restaurants that have been early adopters of technology have gained an edge over competitors by virtue of an improved customer experience.

Jamba (NASDAQ: JMBA  ) , a restaurant retailer focused on smoothies and juices, has used these two trends to increase its competitiveness. The results speak for themselves: Jamba registered three consecutive years of comparable-store sales growth from 2011 to 2013, which represents a good set of results in this difficult environment of weak consumer sentiment.

Healthy lifestyle
As more QSRs include healthier choices as part of their revamped menus, Jamba has the advantage of already being a recognized healthy lifestyle brand. In a October 2013 StudyLogic survey, Jamba was ranked fourth among top-of-mind healthy food and beverage brands, tied with organic and natural foods giant Whole Foods Market.

However, Jamba isn't resting on its laurels. Instead, it plans to further its brand building efforts. First, it is broadening the fruit and vegetable options for its smoothies and blends. One of the new products launched in March was Kale Orange Power, a blend of fresh orange juice with chopped whole leaf kale and bananas. Kale Orange Power is the latest addition to Jamba's line of Whole Food Nutrition smoothies, focused on ingredients including Greek yogurt, carrots, kale, and chia seeds. Kale has been called the "queen of greens," and is a rich source of calcium, iron, and vitamins.

Second, Jamba is reaching out to more consumers regarding its offerings of healthy beverages. Jamba started the Healthy Living Council in 2011 to educate consumers on health and wellness issues through both traditional and new media. In 2013, Jamba expanded on this concept with the Healthy Living Fitness Council. The Healthy Living Council includes contributors such as diet and nutrition expert Tara Gidus, the author of the popular Diet Diva blog; while Healthy Living Fitness has sportspeople such as tennis star Venus Williams as its advocates.

Another restaurant operator that has won the hearts of its customers with healthier food options is Noodles & Company (NASDAQ: NDLS  ) , a chain of fast-casual restaurants serving noodles and pasta. All of Noodles & Company's food offerings are free of MSG and artificially added trans fats. For diet-watchers, the chain has different food items low in sodium, fat, and calories. Customers suffering from gluten intolerance can specifically ask Noodles & Company to prepare their food with gluten-free ingredients.

Noodles & Company's efforts to go the extra mile were recognized with top 10 placings in Parents Magazine's lists of best family restaurants in 2009 and 2011.

The initiatives by other food service operators such as Noodles & Company to include healthier offerings lend support to the fact that Jamba is capitalizing on the right trend.

Source: Jamba

Technology saves time
One of the key pain points for diners is the waiting time associated with ordering and paying for their food. Technological advances have allowed restaurants to address this issue more effectively.

Tabletop screens have already been installed at approximately 400 of Chili's restaurants either owned or franchised by Brinker International (NYSE: EAT  ) . The tablets allow diners to order dessert and coffee, and also pay the bills via credit card. The response has been good thus far, with Brinker claiming that customer acceptance rates are as high as 80%.

Jamba has gone one step further in its use of mobile apps such as Google Wallet, PayPal, or Isis, which allow customers to submit their orders and make payments prior to leaving home or entering the stores.  Users of a mobile app can then just collect their drinks at the Jamba store without queuing and waiting.

In November 2013, Jamba also launched the Isis Mobile Wallet, which leverages the hottest trend in cashless payment-near field communication technology used in smartphones.

Foolish final thoughts
Consumers want to be as healthy as possible and avoid wasting precious time. Jamba and other companies that help them meet these goals will thrive.  

Good companies understand their customer needs and adapt accordingly. Jamba has adapted accordingly to suit the needs of its health-conscious and time-constrained customers. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

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Mark Lin

Mark is a private value investor and is the author of website which uses a systematic quantitative screening approach to filter the global stock markets for cheap cigar-butts and wide-moat compounders.

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