EMERYVILLE Calif. The parent to the Jamba Juice smoothie chain has outlined its strategic priorities for 2009 that include plans to eliminate about $25 million in store-level costs, test self-serve terminals, expand food options on the menu and more aggressively franchise in non-traditional locations.
Dubbing it the 2009 “Blend” plan, Jamba said the goal is to revitalize the struggling chain for future growth and long-term shareholder value, officials from Jamba Inc. said Wednesday.
Dubbing it the 2009 “Blend” plan, Jamba said the goal is to revitalize the struggling chain for future growth and long-term shareholder value, officials from Jamba Inc. said Wednesday.
Over the past few quarters, Jamba has reported negative same-store sales as consumers keep a tighter grip on their wallets. In addition, most of the chain’s stores are in California, where the housing crisis has hit particularly hard and the unemployment rate reached 8.4 percent in November, a 15-year high.
James White, Jamba president and chief executive, said: “Our strategic priorities are focused on a disciplined expense reduction effort, building a customer-first and operationally focused service culture across the company, assembling a retail food capability across all dayparts, accelerating franchise and non-traditional store growth, and enhancing our licensing platform.”
Jamba’s planned cuts in store spending will come from reductions in costs of goods sold, better labor management, occupancy savings and watching other controllable expenditures, including marketing, officials said.
Over the past year, Jamba has reduced general and administrative costs, before stock compensation expenses, from 13.9 percent of total revenue in 2007 to less than 10 percent in 2008.
Operational changes to focus more on customers include relieving store managers of “unnecessary administrative reporting” so they can spend more time on customer service initiatives, Jamba said.
Some older company stores will go through a “refresh” program to revitalize the look and feel of interiors, according to the plan.
In addition, the company is testing some new technologies to promote efficiency, including a customer loyalty program and the possible use of self-serve terminals to improve speed of service and cut labor costs.
Over the past year, Jamba Juice stores have been adding more healthful menu items to broaden daypart sales. The chain rolled out hot oatmeal for breakfast in January, for example, and officials said they plan to expand previously announced tests of wraps, sandwiches and salads.
“We believe oatmeal and other food items will strengthen our relationship with existing customers and attract new customers as well,” White said. “Our research indicates a significant number of Jamba customers currently purchase a smoothie from us, but then purchase a food item elsewhere.”
The chain is also continuing its previously announced emphasis on franchising, looking for more non-traditional outlets, such as college campuses, airports and travel centers, officials said.
During 2008, 37 franchised Jamba Juice locations opened, and another 50 are scheduled to open in 2009, of which 30 to 35 will be non-traditional. Currently, 520 of the chain’s 749 units are company owned.
Jamba officials also plan to continue to look for opportunities to develop more products for the retail market. Possible candidates include fruit teas, fruit yogurt and parfaits, frozen smoothie bars and sorbets, breakfast and energy bars, and packaged nutritional boosts.
To aid in the effort, the company earlier this month brought on Susan Shields as vice president of consumer products/licensing and growth initiatives. Shields previously worked for Beautifull Inc., a company that sells fresh prepared foods, and like CEO White is a veteran of Safeway Inc..
Last year, Jamba attempted the sale of a ready-to-drink smoothie product in convenience and grocery stores, but in December the company pulled the product, citing manufacturing and production issues.
Earlier this month, private-equity group CIC Advantage Holdings LLC acquired a 5.6-percent stake in Jamba Inc. The group of foodservice veterans, including former Taco Bell chief John Antioco, also holds a controlling interest in the Los Angeles-based Red Mango frozen yogurt chain, and last year formed a foodservice-management venture with investment bank Goldman Sachs targeting sports stadiums.
Contact Lisa Jennings at [email protected].
