What Is the Average Profit Margin for a Fruit Smoothie?
Juicing, which includes both fruit and vegetable beverages, has become a $5 billion business and it is projected to grow by about 4 percent to 8 percent per year, according to Barron's. A large portion of that business consists of fruit smoothies, which are especially popular in warmer climates. Fruit smoothies are a popular drink for college and high school students, often replacing meals for a quick pick-me-up in between classes. However profit margins vary widely in the smoothie business, dependent on business operations and management and ingredients used to concoct the smoothie recipes.
The ingredients for fruit smoothie run the gamut from a complete fresh-fruit medley to reconstituted powered beverage mixes. For that reason, the profit margin varies from shop to shop. Margins are dependent on which ingredients you use when making your smoothie. The healthiest, freshest ingredients are the most expensive. Therefore, stores that use fresh ingredients can expect to have food costs that are as much as 50 percent of their expenses, netting them approximately a 40 percent gross margin.
To increase your profit margin in the smoothie business, you can use cheaper ingredients. Some smoothie mixes come in powered form that you mix with milk, ice and (sometimes) fruit. Others are made with a liquid concentrated fruit base that you blend with milk and ice to make the smoothie. These packaged dry or liquid ingredients have a longer shelf life than fresh fruit and therefore create less food waste. However, by using these mixes you are creating smoothies that are less healthy and often filled with sugar. If you want to sell a smoothie because it is a healthy food, these mixes defeat the purpose.
Equipment used to mix the smoothies, and commercial refrigeration units for storing the ingredients are also quite expensive. Busy smoothie shops run high-efficiency blenders four or five at a time to keep up with orders. These blenders do wear out with heavy usage and need to be repaired or replaced often. Many businesses choose blender brands such as Blendtec which are lower in cost and come with a noise muffling cover. Another piece of equipment that is needed for smoothie shops is a commercial dishwasher. These are run consistently throughout the day to keep blenders clean and sterile. As a business owner, it is important to weigh the overall cost of use for these pieces of equipment per smoothie to determine the best purchase.
Training staff correctly to make the perfect smoothie is one of the most important ingredients in a smoothie shop. Staffers need to interact with customers in order to process orders and transactions, then build the smoothie to order. Well-trained staff can help customers discover their favorite flavors to build customer loyalty. Training new staff well is worth the time and attention it takes, although this is another cost to doing business. Combining simple recipes with well-trained staff will give you the best result, allowing you to have short training cycles and allowances for staff turnover.