In a report released Wednesday, Market research firm Technavio projects the worldwide smoothies market will grow $10.14 billion from 2020-2024. The company indicated the industry will see a compound annual growth rate of over 9% during the four-year period. The strong forecasts beg the question is now the time for a smoothie investment?
The smoothies market has seen significant growth in the U.S. over the past five years. According to market research firm IBISWorld, the U.S. Juice & Smoothie Bars segment of the market is currently worth $2.6 Billion alone. The segment saw a 1.5% annualized growth rate from 2015-2020. IBISWorld estimates the Juice & Smoothie Bars segment will grow 2.3% in the U.S. in 2020.
What’s Impacting the Market?
Market Drivers
Millennials are gaining more disposable income and making up a greater portion of food and beverage consumers. The generation has an affinity for healthy living, with 53% of millennials stating they are committed to organic foods and products. Accordingly, this implies a more health conscious millennial buyer across the functional food market. Notably, Millennials buying power is slated to reach $1 trillion this year.
The generational shift coupled with the adoption of health-conscious living across the globe is fueling the market’s rapid pace. Consumers are increasingly opting for healthy and functional food and beverage products. This is especially true of products rich in vitamins, proteins, and active digestive ingredients such as prebiotics and probiotics. Smoothies are made primarily from fruits and vegetables and provide essential nutrients, vitamins, and trace elements filling this need.
In addition, Consumers’ recent digestive health awareness has increased demand for smoothies. Smoothies made of yogurt and milk are also gaining popularity due to their probiotic properties, which help detox and cleanse the body.
Moreover, Consumers often view smoothies as a good substitutes for full meals given the assortment of vitamins and nutrients they contain. Doctors, trainers, and fitness professionals often recommend the drinks for those looking to lose weight.
Market Impediments
The market is not without its faults. Smoothie businesses tend to price their products higher than competitor beverages (soft drinks, juices, etc.) or substitute health food products. The higher price point decreases accessibility to some market demographics. Moreover, many smoothie outlets add more sugar to their products to enhance flavor, which decreases health benefits. In doing so, many smoothie businesses fail to capture health-conscious consumers. These factors hinder market growth.
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What Segments Exist in the Market?
While market data suggests a large global landscape, it is important to keep in mind the data is comprised of several segments. Most notably, it includes both packaged consumer product goods and goods sold from retail outlets. Although the market is sizable and growing, franchisors and franchisees will continue to compete with large conglomerates for marketshare.
Who are the Major Players?
The noteworthy players operating the global smoothie market include: PepsiCo Inc. (US), The Coca-Cola Co. (US), Tropical Smoothie Cafe LLC (US), Suja Life LLC (US), Innocent Drinks (UK), MTY Food Group Inc. (Canada), Bolthouse Farms Inc. (US), Jamba Juice Company (US), Boost Juice (Australia), Tropical Smoothie Cafe (US), Smoothie King (US), Barfresh Food Group (US), and Crussh (Australia).
The noteworthy players operating smoothie franchises in the U.S. include: Orange Julius, Smoothie King, Jamba, Tropical Smoothie Cafe, Booster Juice, Freshii, Maui Wowi, Planet Smoothie, Juice it Up!, and Surf City Squeeze.
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