The leading healthy active lifestyle brand Jamba Inc. (JMBA) continues to innovate its beverage line and is ready to hit the upcoming season with the launch of its juice blends platform from March 13.
The new natural juice blend beverage platform will be launched in three flavors — a blend of range juice, carrot juice, and bananas, a blend of fresh squeezed orange juice and mangos as well as a juice blend of fresh squeezed orange juice, strawberries, blueberries and raspberries — and will be available in over 700 stores.
This expansion of fresh juice offering is considered to be the ‘Phase One’ of fresh juice initiative by Jamba management. In addition to this beverage line, Jamba has a far reaching plan to launch a new juice bar concept in San Francisco, New York, Los Angeles, and Seattle. These innovations are part of the company’s initiative in 2012 namely ‘BLEND’ plan 2.0.
Non-alcoholic beverages remain a sweet spot in the U.S. eateries. According to Mintel Global Market Navigator, the US fruit juice drinks market grew by 1% in 2011, which is an improvement on the 1.7% decline witnessed in 2009 and no gain in 2010. The market also has the ability to grow further through innovation, especially in healthier solutions. We see Jamba all geared up to leverage the trend by adding all-fruits to its line-up.
Our Take
We believe Jamba is turning around at a slow but steady pace. While the company’s revenue is still lagging, indicating that it has a long way to go, Jamba is exploring every single opportunity to transform itself from a made-to-order smoothie retail chain to a healthy, active lifestyle brand by 2013. In fact, the company remains focused on various bolt-on acquisitions to expand the ‘squeezed-to-order’ fresh juice offerings.
Jamba’s competitors primarily include sector behemoth Starbucks Corp. (SBUX) and McDonald’s Inc. (MCD), both of which specialize in frozen as well as hot beverages. However, Jamba has 22 years of juicing experience. The company is also expanding into new markets in the US as well as stepping beyond the border. Management believes the brand has the potential to reach 2700 units in the US marketplace.
Jamba currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. We are also maintaining our long-term Outperform recommendation on the stock.
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