Smoothie King’s Arduous Move to ‘Cleaner Blending’ Nearly Complete
Few people get as fired up about health food as Wan Kim, the CEO of Smoothie King.
He’s been working on an initiative to rid the company’s smoothies of added sugar and other artificial ingredients for more than four years now. But the grand plan is finally nearing company-wide rollout, despite a few bumps along the way.
Along with ditching Styrofoam cups, the “cleaner blending” initiative is aimed at helping update the 45-year-old brand for today’s health- and environment-conscious consumer.
When he first started the project, it sounded simple. Just stop adding sugar, right? But it quickly became a foundational project because as any dieter knows, sugar is added to almost everything.
“We never actually realized what we used to have, frankly. When you buy protein powder, you assume it’s just protein powder. But once we went through, we found out that we had to clean more than we thought,” said Kim. “Literally we cleaned 85 to 90 percent of our ingredients, it was a massive job.”
And when the project first started, suppliers thought Kim was a little bonkers.
“Even in ‘14 and ‘15 when we started talking to them, I don’t think they really understood where we were coming from. But the trend really hit in ’16 and ‘17 and they realized why we took on this project,” said Kim.
But just cleaning the ingredients wasn’t the hardest part. For legacy brands, innovation can’t compromise the experience for the brand loyalists that come in for the same smoothie week after week.
In the initial test, it was a little bumpy. Kim said they kicked off testing in the home market of Dallas. He said they didn’t advertise that the smoothies had changed, wanting to see consumer perceptions of the new recipes without interference. Using surveys, he said the company watched taste perceptions and intent to return closely during the test.
“The first week, as soon as we launched it, our taste question before we launched cleaner it was about 83 percent, meaning they were very satisfied. The first week without telling them what happened it dropped to 80 percent, so some people were probably recognizing the changes and thought we made it wrong,” said Kim. “But after the first week, we communicated that we made the change and the benefits of no added sugar. Then the taste question scores stated going up, now it sits at 85 percent positive—knowing what we have done they actually appreciated it.”
The second consumer affected by the undertaking was, of course, the franchisees that operate the bulk of Smoothie King’s more than 900 locations.
“I think we have maybe different three groups,” said Kim. “The first group is so anxious to get it done; they want to get going. Then the second group is thinking, ‘Should I jump into this, should I be really proactive? Then of course there is always group three that isn’t positive, and think the sky is falling.”
He said he’s proud how many franchisees are in the first group. But the other groups had plenty to worry about. Food costs went up by about 10 percent, Kim admitted, “that’s a lot.”
But for those passionate franchisees, the sales lift was right in line with food cost increases.
“The group A zees are up by double digits, they are engaged and talked to them about what we’ve been doing, and customers are responding. When people know, they like it,” said Kim.
The big question in the era of treat smoothies and unicorn shakes and all manner of decadent drink options is why even bother raising costs and changing the customer’s favorite smoothies? Kim said it wasn’t really a change; it was just getting back to the original mission.
“In 1973, Smoothie King was born as a better healthier alternative, we are not changing our DNA, we are going back to how we started because we don’t believe we are a healthier alternative in 2018,” said Kim.
The company is in the midst of rolling out cleaner blending to the whole system a few markets at a time. By January, Kim said it would be the company-wide standard.