What an Eight-Dollar Juice Can Tell Us About Competitive Strategy

Posted by Ken Sawka on Aug 6, 2015 9:54:00 AM

BostonProjuice

I bought a smoothie from a food truck today and found it to be a unique and highly rewarding experience. Now, you may be saying to yourself, “did Ken just wake up from a 20-year nap? Smoothies and food trucks aren’t exactly the latest craze, especially in Boston, where food trucks and smoothies are about as ubiquitous as Dunkin Donuts.” (OK, maybe not quite)

Boston, like other cities, is part of the vast and growing food-truck-smoothie industrial complex. According to market research firm IBIS World:

  • As of January 2015, there are more than 4,000 food trucks in the United States operating in a market valued at nearly $900 million
  • Smoothies are a $2 billion market with average annual growth of nearly 3 percent over the past five years

I bought my drink – a blend of carrot, orange, melon and ginger – from Boston Projuice and I paid eight dollars for it. Boston Projuice calls these drinks “Juice”; they also sell “Blends” which are more akin to smoothies and contain no sweeteners or dairy. So what made Boston Projuice make me shell out eight bucks for a smoothie and enjoy the experience of doing so?

Wittingly or not, Boston Projuice made strategic choices about how to compete, and how to get guys that work in Boston’s financial district to line up four-deep to fork over eight bucks for a smoothie. It is pursuing a differentiated product strategy that consists of:

  • A fantastic product. It’s blended right before your eyes, consists of nothing but juice, and contains nothing artificial.
  • A great experience. The food truck is a converted mini-bus and is really cool, the two smoothie guys that run it are really nice, and the inside of the truck is  absolutely spotless. The guy that mixed my smoothie almost seemed to be going through a period of grief when he carefully handed me my drink, he had so much pride in it. And, they have a loyalty program.
  • Engineered product scarcity. You never know where they’ll be or when. So when they were sitting there at the corner of Milk and Kilby Street in Boston as I was walking to my office, I was ecstatic.  Good thing I got there when I did; by 10:00 this morning they had moved to the corner of Opera Place and Huntington Avenue, on the Northeastern University campus.
  • A premium price. Did I mention that the Juice cost me eight bucks? EIGHT BUCKS!  But, I forked it over and enjoyed doing so because the product and the experience were so wonderful.

But that’s not the only model of smoothie competition.

McDonalds sells smoothies and pretty good ones at that. I often down one as a quick snack when running to catch a connecting flight at DFW or O’Hare. McDonald’s chose to pursue a smoothie strategy is almost the exact opposite of Boston Projuice:

  • It delivers a good, but not great, product. According to McDonald’s, The blueberry pomegranate smoothie (my favorite) is mostly made of fruit puree, with water, sugar, and fruit concentrates, among other things thrown in as well. But it comes in at only 220 calories – not too bad.
  • A good customer experience is not part of the equation. Like any McDonald’s order, you order, pay, get a number, wait, and have the product unceremoniously handed to you.  Speed and efficiency takes precedence over customer experience.
  • It enjoys broad product availability through retail distribution. Any one of the US’s 14,000-plus McDonalds will sell you a smoothie, and they will all taste exactly the same.
  • It’s a good value. Average retail price for my blueberry pomegranate smoothie is $2.89. Though perhaps not an apples to apples (or melons to pomegranates) comparison, that’s 43% cheaper than Boston Projuice’s Blends. 

Which company has the better strategy? Neither one does. They both have the right strategy for each of them. Boston Projuice and McDonald's made choices about how they were going to compete in the quick-serve healthy drink market, and their strategy works for them. Imagine the disaster that would befall both companies if they tried to copy the other’s strategy.

Is your company making strategic choices or strategic copies?

Topics: Competitive Intelligence, Consumer Goods, Brand Insights, Market Analysis, Competitive Strategy

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