Having watched rival McDonald’s U.S. sales heat up this summer thanks in part to smoothies and frappés while its own sales struggled to escape red ink, Burger King is looking to join the fast-beverage trend by testing a Strawberry Banana Smoothie of its own.
In one mid-Atlantic test market, Burger King operators confirm that the chain is testing a Strawberry Banana Smoothie priced at $1.89 for a small; $2.79 for medium (no large). This starts below the $2.29/$2.79/$3.29 pricing for Real Fruit Smoothies introduced by McDonald’s in July. With soft drinks discounted to $1 for any size, smoothies and frappés offer significant profit potential. And because the smoothies contain fruit, they can help blunt criticisms that quick-service fare is too focused on high-fat items.
Additionally, Burger King in most markets has added Seattle’s Best iced coffees in flavors that include vanilla, mocha, caramel and fudge.
McDonald’s credited its McCafé beverages with contributing to a 5.7% increase in U.S. same-store sales for July, its strongest monthly growth since January 2009. In August, its comp sales were up 4.6%. By comparison, Burger King reported a 1.5% decline for U.S./Canada comp sales for the quarter ended June 30 and a 3.9% decline for its fiscal year, which ended then. According to Dow Jones, the success of McDonald’s smoothies also has helped others in the category, including Panera Bread, which reported a 21% increase in sale of frozen drinks during its latest quarter.
In a turnabout, Emeryville, Calif.-based Jamba Juice, one of the largest smoothie chains, this month launched an expanded breakfast platform in its stores. Jamba’s menu includes hot oatmeal, which McDonald’s already has said it will roll out early next year. Jamba this year poked fun at burger chains’ move into the smoothie category with a mock commercial (watch it here) claiming that Jamba is adding a “Cheeseburger Chill Smoothie.”
Jamba and others have a growing market niche to defend. According to data from Mintel, U.S. smoothie-shop sales rose from $875 million in 2005 to an estimated $1.136 billion last year. These figures include only smoothie-specialty chains such as Jamba Juice, Orange Julius and Smoothie King, so the total market is larger. But the demographics are interesting. More than half (53%) of adult respondents for Mintel’s December 2009 study say they purchased a smoothie in the past three months. Those between the ages of 18 and 24 traditionally have been the heaviest users but the 18-34-year-old market has been growing rapidly. This is prime QSR territory. Smoothie drinkers are more likely to say they drink them because the beverages are refreshing (30%) than because they’re “good for me” (27%).
McDonald’s wasn’t the QSR smoothie pioneer. Jack in the Box added Strawberry Banana, Mango and Orange Sunrise Real Fruit Smoothies to its menu in April 2008. Sonic has had its Tropical, Strawberry and Strawberry Banana smoothies on its menu for some time. Dunkin’ Donuts has has smoothies since 2006. Burger King, Wendy’s, Hardee’s and Carl’s Jr. have been among the smoothie holdouts.
© BurgerBusiness.com, 2010