Buoyed by its success with coffee and intent on adding $125k per store in annual drink sales, McDonalds has pushed into the fruit smoothie market with two new offerings.  Current smoothie purveyors Jamba Juice, Panera, and Starbucks have publicly offered a sanguine view of the entry with hopes that it will grow the $2.5 billion market.  But P.R. statements aside, McDonalds’ history of success is clearly rattling some nerves:  Jamba Juice recently released an advertisement parodying burger chain smoothies by facetiously offering a “Cheeseburger Chill Smoothie”.  Early returns suggest these companies have reason to worry as McDonalds has canceled their nationwide free smoothie trial due to “unprecedented demand”. Panera’s strategy of positioning itself as a premium brand is likely to be mirrored by the other established smoothie players, but more innovative thinking may be required to keep McDonalds from taking a big sip from this market.

Veterans of the industry (or those with a taste for smoothies) may remember the disaster that was WhipperSnapple – customers struggled with the concept of prepared beverages in a can and a few smaller chains suffered through the first attempt at smoothie introduction in the late 1990s. While the growth of Jamba Juice and McDonald’s early successes seem to bode well, smart chains are looking to run intelligent testing of the smoothie concept first. This testing will drive valuable insight into which flavors and smoothie styles customers will positively respond to as well as understand the logistical and operational impacts of introducing new food prep fixtures required to provide smoothies.