Smoothie Article: Smoothie Bars can go anywhere!
Resource: Pizza Today!
added - 2006-10-04     printable

Smooth Operator

Marc S. Botts

Frozen drinks can dramatically boost beverage sales with relatively small investment.

It wasn't too long ago that smoothies were little more than a niche product akin to bean sprouts and the juice extractors hawked on television by the likes of Ron Popiel. In recent years, however, the flavorful, refreshing iced drink has made its way on to menus across the country.

And for good reason. With a wide variety of flavors, they appeal to diners. With substantial profit margins and low investments, they certainly appeal to operators.

"We see smoothies as being the new frontier for frozen drinks in the fast-food market," says Lee Fayette, owner of Tropics Frozen Beverages.

Tibor Zsuppon of Sanfratello's in Tinley Park, Illinois, says they are the perfect answer to customers who want frozen drinks but don't want the alcohol associated with Margarita's and daiquiri's.

"That's the great thing about it. They can order those because they like the smoothie part of it, without the alcohol."

Uptown Appeal
Zsuppon says he thinks the upscale pizza at his restaurant draws the type of crowd most likely to buy smoothies.

"I don't think you are going to sell them in a Chuck E. Cheese," he says.

Rory Wade, owner of five Pintaili's Pizza stores in New York, agrees.

"They're upscale drinks. Then again, our pizza is a high-end pizza," Wade says.

Before adding smoothies to the menu, Wade says, the owner or bar manager should first determine whether his clientele would be willing to pay top dollar for a beverage.

If they are willing to buy high-end sodas, such as the $1.50-a-bottle Boylan's sodas he sells in his restaurants, they likely would purchase a $3-$4 smoothie.

"If they are going to pay that, then they are going to buy smoothies," he says. "But, if they are only pumping out 16-ounce sodas for $1.25, they're not going to (appeal) to that customer. That's my opinion. I know we can sell it because of the clientele that comes in here."

He says Pintaile's serves Coca-Cola, but that is not a prime item for them.

While acknowledging they would do better in upscale restaurants, Fayette says it is more the mindset of the operator, not the customer, that determines whether smoothies will work.

"That's a misconception, that they won't sell in the poor neighborhoods," Fayette says. "People in these neighborhoods will scrape up the money for something they want."

Incremental Sales a Key
"The key to the smoothie business, in our opinion, is to have a good product, equipment that makes it well and enough traffic that is going to come back in the incremental times during the day to make it successful," Fayette says.

"You're not going to drive a frozen drink program with your lunch or dinner trade to the degree you will in the off hours. You'll sell smoothies or frozen cocktails in the meal periods, but it's much, much less than what you will sell in the snack periods."

Foot traffic, says Pinaili's Wade, is essential to successful smoothie sales.

He says they sell smoothies all year, though demand does slow in winter because there are fewer people out walking about.

"It tends to slow down a little," he says. "In the spring and fall, there's a lot of walking around traffic at that time, then we can sell a lot more."

Still, he says, smoothies are in high demand, generating about $25,000 in sales at his restaurants.

"Every three weeks we sell 24 cases," Wade says. "That's 12 pieces to a case, at $3. And I'm a slow store for lunch. There are other stores that do a lot more."

Fayette says it is the off-peak increments that drive sales like that.

"That's where they are going to get the most revenue," he says.

Restaurants in areas with large concentrations of office buildings and workers will realize substantial sales.

"If (office workers can) go back there during those off-meal periods -- 2 to 5 o'clock -- they're going to do a lot of business," he says. "If it is mostly vehicular traffic and they don't have a drive-through, they're not going to see the people stopping back in. There's a lot of factors that seem to enter into it."

Low Investment, High Profits
With a multitude of flavors to choose from, such as strawberry, strawberry-banana, mango, passion fruit, mixed-berry, peach and Italian lemonade, operators can offer customers more variety and cash in at the same time.

"Typically, a soda is going to sell for about a buck and a quarter. They are going to run a cost of 20 cents, let's say, for a fountain, maybe 25 cents, counting your cup, lid and straw," Fayette says. "So, they are making about a buck a drink. A smoothie is generally going to sell for about $2.50 to $2.75. Their cost is going to run between 60 and 75 cents, so they're basically making two bucks a drink."

Investing in equipment to make smoothies is relatively low when considering the profits involved.

A commercial blender can cost between $400 to $1,200, depending on the quality. The ice machine is the biggest investment, and most restaurants already have one.

"Most operations are going to have a machine that puts out enough ice for them to use for soft drinks and frozen drinks," says D. Scott Hinckley, director of sales and marketing at Vita-Mix Corporation, a manufacturer of commercial blenders.

"So it is a pretty low investment for them if they already have that piece of equipment," he says. "There are enough (mix) suppliers out there that it is pretty easy for them to get into the business."

If an operator is able to build volume into such sales, the profits can be staggering.

"It depends on the amount of traffic, but we've got some of the high-volume ones that do 500-plus smoothies a week," says Fayette.

Surprisingly, he says there is no trade-off on soft drink sales involved, for the most part. People who want soft drinks are still going to buy them, he insists. But, those same people will purchase smoothies from time to time when they are in the mood for them.

"Most of it isn't a trade-off. That's the interesting part of it," Fayette says. "Most of it comes from people who come in for a snack. It's an alternative to ice cream; it's an alternative to a bottled juice drink, particularly when you are in warm and/or humid conditions."

back to articles main page     get started