Reference no: EM13218223

Case Study: BOOST Juice

While a prime reason for choosing any drink is to quench one's thirst, it is when consumers continually demand a particular brand that marketers know they have done their job well. There are many ways in which we san slake our thirst, and large amounts of money are spent on positioning branded drinks in various categories - such as those competing in carbonated beverages, water and milk drink sectors - not to mention the sums spent on convincing us that we need to drink more of that type of drink.

You might think there is very little room left to grow the market, or feel that the industry is overcrowded. After all, Australasia isn't North America, which has almost ten times the local population. California alone has the same population as Australasia. Nevertheless, while there have been failures, juice bars targeting the health-conscious have sprung up in many different locations, particularly in shopping malls. A big player in this market, Boost Juice, was founded by Melbourne-born Janine Allis in 2000. It experienced 257% growth in 2003/04 and by then had 100 stores and a turnover of nearly $20 million. By 2007 there were 180 stores throughout Australia, with three in Chile, two in Indonesia, and one each in Kuwait, Singapore and Dubai, and turnover had risen to over $90 million. All this in seven short years! More than 150 of the stores are franchise operations. When high-profile investors such as the co-founder of Flight Centre, Geoff Harris, testify that they also see a market gap by putting their money at risk in such a new venture, we have to conclude that success will continue.

Boost Juice has shown that brand equity can be built quickly if there is a gap in the market. Brand equity has allowed Boost Juice to be less resistant to price competition than it otherwise might be. After all, fruit juices have long been seen as a commodity market where margins are affected by the availability of raw materials. For example, Australia's biggest fruit juice company, Berri, found that drought-induced shortages have held back sales of its range of new products: SuperJuice, Harmonics, Daily Juice in Season and Daily Juice Garden Harvest. Berri also supplies juices to cafés, enabling them to compete with specialist juice bars.

Why has Boost Juice experienced such phenomenal success when others haven't? It isn't enough to have a great idea, financial backing and a solid board of directors with retail experience. Perhaps this comment by Janine Allis goes some way to explaining why Boost Juice's healthy smoothies and juices are in such demand.

‘Attitudes and awareness change,' Allis said. ‘Look at smoking - when I was growing up, cigarettes were all about a man on a horse riding up a mountain. Today, the packets are covered with shocking images showing the damage smoking can do. Now a similar thing is happening with food. We have more cancer than ever, more diabetes, more heart disease, and people are becoming more educated about the role food has to play in wellness. They want to eat more real food, and food producers have to follow.'

As we well know, people are fickle, and market volatility may mean that it isn't always possible to maintain profit margins without price movement. Should a negative scenario play out, where price discounting is necessary to maintain market growth, it would be a case of the company needing every last drop of Janine Allis's business acumen. This same business knowledge help Allis win the title of Victorian Business Woman of the Year at the 2004 Telstra Business Women's awards, and helped the company win the prestigious award of American Express Franchisor of the Year in 2005.