July 14, 2008

Starbucks Brings New Fruit Smoothie to the Table

By Bruce Horovitz

It may be tough to sell a $4 cup o' joe in a sour economy, but Starbucks (and other fast-food kingpins) are betting big this summer that folks will willingly fork out nearly that much for healthy-sounding fruit smoothies.

On Tuesday, Starbucks will roll out Vivanno, a $3.75 better-for-you fruit smoothie made with one whole banana, juice, ice, and protein and fiber powder. It has no artificial colors or flavors, and no added sweeteners, and it's 250 to 270 calories, depending on the flavor you pick.

"This quality and transparency is not something you'll get at a fast-food joint," says Rob Grady, Starbucks' beverage vice president. "It's a new platform for us."

Smoothies are not new to consumers. What's new is fast food's sudden interest in them. A big chunk of the industry is just now jumping onto the $2.4 billion smoothie train.

McDonald's is testing them in several markets. Taco Bell and Jack in the Box began rolling out smoothies in recent months. And Dunkin' Donuts has a new, lower-calorie smoothie.

Ready-to-eat smoothie sales are up 139% since 2002 and could pass $4 billion by 2012, according to a new study from Mintel, a research specialist. Made-to-order smoothie sales -- sold at fast-food and juice chains -- will jump to more than $2.5 billion this year compared with $989 million in 2002, Mintel projects.

Fast-food chains hope to not only profit from smoothies, but also get an image lift from them, says David Morris, research chief at Mintel.

"Smoothies have a health halo attached," Morris says. "That could help combat criticism for Frappuccinos that are almost 1,000 calories."

(For the record, Starbucks' large Double Chocolaty Chip Frappuccino Blended Creme actually weighs in at 670 calories.)

Even then, most smoothies are loaded with more than fruit, warns Marion Nestle, professor of nutrition at New York University.

"They've got calories, and lots of them," Nestle says. "Smoothies give the illusion of health. You don't think there are many calories in something that calls itself a blueberry pomegranate smoothie, but you can bet there are."

Fast-food chains are following the lead of the beverage giants, who for years have been replacing slower-selling carbonated soft drinks with healthier-sounding drinks, says Jeff DeGraff, associate professor of business at University of Michigan.

"Whether something is truly nutritional or simply marketed as such is the real challenge to determine as a consumer," he says.

But fast-food chains need to be cautious. Jamba Juice has recently struggled with decreasing same-store sales. Mintel's latest report warns, in the midst of the housing crisis and softening economy, "The industry should take a long look at the possibility of overbuilding."

And there's new competition:

*Starbucks. Beyond its Vivanno smoothie -- which has been test-marketed only in Seattle -- Starbucks also will roll out another summer-like beverage Tuesday in 315 Los Angeles-area stores: Sorbetto.

Grady calls Sorbetto a "drinkable sorbet." Similar drinks are common in Italian cafes, he says. A 10-ounce cup of Sorbetto is $2.75.

*McDonald's. McDonald's has big plans to pump up its beverage sales not only with specialty coffees, but with smoothies.

McDonald's wants to be a "destination" for beverages, says Lee Renz, vice president of beverages. He won't say when smoothies will go national.

It's testing McCafe Real Fruit Smoothies in parts of Michigan, in Louisville, and in Bakersfield, Calif. Flavors are strawberry banana and wild berry banana.

Nutritional information is not yet available. Smoothies are currently made with fresh bananas mixed with a fruit syrup.

National pricing has yet to be determined, but at some Bakersfield locations, for example, small smoothies sell for $2.49, large for $2.99.

*Dunkin' Donuts. In May, Dunkin' rolled out Reduced Calorie Berry Smoothies at 250 calories. That's 30% fewer calories than in a regular Dunkin' smoothie, spokeswoman McCall Bodi says.

Suggested retail price for the 16-ounce drink is $3.39, though prices vary by location. Dunkin' smoothies are made from low-fat yogurt and real fruit and also are available in strawberry banana.

*Taco Bell. Fruitista Freeze is Taco Bell's most successful-ever signature beverage launch, spokesman Rob Poetsch says. Made with real fruit, the strawberry has 230 calories and mango strawberry has 250. Price: $1.89.

*Jack in the Box. The chain began selling Real Fruit Smoothies in April. All units will be serving them by July 21, spokeswoman Kathleen Anthony says.

Flavors include mango, strawberry mango and orange. A 16-ounce cup costs $2.99 and has about 280 calories. A 24-ounce glass goes for $3.99 and totes about 420 calories. (c) Copyright 2008 USA TODAY, a division of Gannett Co. Inc. <>