There’s a lot to cover when it comes to making and selling fresh juice. A juice business is nothing new, but it’s something that you should consider if you haven’t yet. In the United States, juice businesses can be profitable because of the popularity among customers for the convenience of getting the required nutrients, making the juice business a natural pair. While it can be expensive to purchase fresh produce and ingredients for juicing, there are easy ways to manage your costs and increase the profitability of your juice business.
Why Start A Juice Business?There are several variations to the traditional juice bar. Some of these include smoothie bars, smoothie bowls, and bottled cold-press juice companies. All these varieties are unique but share the goal of delivering nutrients to customers as conveniently as possible. These niche businesses offer fresh fruit smoothies or juices to the health-conscious customer who is trying to get their daily nutrients in. Many people have trouble getting in their recommended servings of fruit and vegetables. In fact, according to the 2018 State Indicator Report on Fruits and Vegetables:
“Only 12.2% of adults meet the daily fruit intake recommendation and only 9.3% of adults meet the daily vegetable intake recommendation”.
With adults struggling to meet these recommendations, it’s no wonder that you can find a business selling smoothies or juices in any major city in the US. The Juice Sector of the Beverage Industry was a $16.6 Billion sector in 2018 and has continued to be big. These appealing sales numbers have brought new businesses into the industry. Businesses will likely continue to try and help adults meet their nutrition needs by serving convenient and delicious juices and smoothies.
Is a Juice Bar Profitable?Like any foodservice business, a juice bar can be challenging to turn into a profitable venture. Food costs can be higher than other businesses, making it even more crucial to effectively manage these costs. To make this work, start with understanding your costs and sales to ensure that you make a profit. Before you start a juice business, you should start with these steps:
1. Learn how to calculate Cost of Goods Sold and Profit Margin
- This sounds a lot harder than it is. Lay out the cost of everything that goes into one of your beverages. This includes things like cups, straws, packaging, etc. This is your Cost of Goods Sold (COGS).
- What price point do you want to be at for your juice or smoothies? Test the gross profit (Sell Price – Cost of Goods Sold) of different sell prices and find one that you’re comfortable with. To calculate profit margin, take your gross profit and divide by your sell price.
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|Profit Margin (%)||71.4%||66.6%|
2. Price out some base recipes
- Choose 3-4 recipes of ingredients that you want to sell in your business. It’s helpful to price out ingredients from different sources so that you have an idea of where you want to try and get your produce. These base recipes priced out will help determine some expected costs.
- Planned out costs will help layout some variants in your recipes and costs as the price of ingredients change and availability of product changes. It also will show you what you can always expect at least to spend on a recipe.
- Use the template below to price out some of your recipes
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3. Price out your packaging costs
- List everything that you’ll be using to put your fresh juice or smoothies in. Are you going to bottle your juice? What about plastic cups with straws? You’ll need to choose what works best for your costs as well as what you want your branding to be.
- Consider if you want to start out with branded or plain packaging. While you might be excited to get cups with your logo on them, they usually can be costly to start with.
- Below is an example of a template that you can use for pricing out packaging items for your juice.
- Pay attention to order minimums from different companies. While the cost per item might be lower, you may have to order more, costing you more upfront.
Boost Juice ProfitFresh produce and ingredients can get expensive, but there are ways to save money while selling your juice. Business owners are incorporating these helpful tactics, and as a result, are increasing the profit made from their juice. Shop Local Get with local farmers and gardeners that grow vegetables and fruits that you’re interested in. Build a relationship with them in which you can buy from them in large quantities and hopefully get a better price than average bulk buying. Getting produce locally is a benefit to both you and the grower and can often be less expensive than using wholesale stores. Start a Garden Whether you join a community garden or start one of your own, growing your own produce has long-term benefits to your bottom line. If you successfully grow the produce you want to use, it can save you a lot of money. Growing your own food requires a time commitment that some business owners don’t have the capacity for. However, if you do have the time, it can be an enjoyable part of the business! Gardening can also help to reduce food waste in the industry. Shop In-Season Anyone that eats, grows, or drinks fresh produce knows that there are growing seasons for all fruits and vegetables. Purchasing in-season produce is essential to saving money on juice and smoothie recipes. Out-of-season produce can be expensive and difficult to find, resulting in costly or unreliable recipes in your business.
Staff TrainingOnce you start hiring employees, they will need training in creating reliable results for customers. Ingredients used need to be the same every time a recipe is made to keep costs and finished product consistent. Keep your staff informed on the proper use of ingredients and how to prevent waste.
- Pre-proportion out ingredients for each recipe or provide a scale for employees to weigh recipes. This will help prevent waste or overuse of any ingredient.
- Ensure that your staff knows how to properly use and clean your juicers or blenders. Proper cleaning of your machines will keep them operating smoothly and avoid costly breakdowns.
- Inform staff on how to store produce to keep ingredients fresh and prevent waste.
- Teach employees how much to pour or package when creating the finished product. Overpouring can add up over the course of a shift!