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Starbucks aims to squeeze more out of fresh juice craze

Starbucks Corp.Beverage IndustryRestaurant and Catering IndustryFitnessFishingWhole Foods MarketLifestyle and Leisure

In Southern California's outer orbit, a dusty highway drive away from the L.A.'s health-obsessed celebrities and hipsters, a massive $70-million factory is preparing to churn out 140,000 gallons of premium juice a week.

The 264,000-square-foot Rancho Cucamonga facility is owned by Starbucks Corp., best known for its coffee-on-every-corner network of cafes. The Seattle java giant is watching juice shops crowd into major cities and command $10 a bottle even in a feeble economy.

Now it's angling for a bigger sip of the $1.6-billion fresh juice craze, shifting production of its Evolution Fresh juice brand to the new factory Wednesday. But even though the site can generate four times as much nectar as the brand's original plant in San Bernardino, high demand means that both factories must keep running for now.

"We're on a tear, a significant growth curve," said Chris Bruzzo, general manager of Evolution Fresh.

California has long been a juice drinkers' paradise. Jimmy Rosenberg, who founded Evolution Fresh before selling it to Starbucks in 2011, launched Naked Juice three decades ago by selling it out of his backpack on local beaches. The Odwalla brand began in Santa Cruz in 1980. What's now known as Jamba Juice bloomed out of San Luis Obispo a decade later.

But lately the interest in juice has exploded.

Increasingly body-conscious consumers are veering away from soda and instead seeking out fresh, thick nectars untainted by processed sugars and suspicious preservatives. Rhetoric about the benefits of organic, natural, raw and local goods is boosting stock prices of companies such as Whole Foods, Sprouts and Annie's. Improved agricultural techniques mean that more produce makes it off the farm at prices suitable for squeezing.

Clover Juice launched two juice bars in Los Angeles within a three-month period this year. Pressed Juicery operates more than a dozen locations across the Southland. Juice Society drops off juices and juice cleanses with customers. Kreation has a juice truck as well as a recently opened 24-hour ATM-like dispenser called the Juice Machine in Beverly Hills.

The Punchbowl in Los Feliz, which dubs itself an apothecary of raw, vegan and organic juices, opened this year. Its Rita Hayworth drink, featuring evening primrose oil, rose water, coconut meat, yogurt, raw honey, almond milk and strawberries, sells for $11.

Around the same time, JuiceFarm in Pasadena began selling 16-ounce nectars made without additives or pasteurization for $9.50. The company uses a custom-built cold-press machine that applies 15,000 pounds of pressure onto produce.

Costa Mesa photographer Arpit Mehta and his wife, Amber, began juicing at home this year, subsisting on blended organic produce such as beets, kale and apples for days at a time every few months. It's more cost-effective than buying bottles at a juice boutique, which can run $20 for two people, he said.

"They actually taste really good," said Mehta, 30, of the homemade drinks. "The idea is just to clean out the system a little bit, and we feel better once we get through the week. Weight loss is a byproduct."

But skeptics abound, questioning whether such juices are the magical vitamin and energy-bearing potions they're often made out to be.

Mayo Clinic specialists have said that juicing probably isn't more healthful than eating whole fruits and vegetables, despite proponents' claims that the body better absorbs nutrients when they're in liquid form.

If anything, juice concentrates sugar while leaving out healthful fiber, according to nutritionists. And although juicing might help Americans boost their produce consumption, experts warn that fresh-squeezed varieties can quickly develop harmful bacteria.

Consumer Reports last year found that 10% of the apple juice it tested contained potentially unsafe levels of arsenic. The Food and Drug Administration said this summer that it may impose stricter regulation on the popular fruit drink.

Still, the overall $22.8-billion juice industry has grown 4.3% a year on average since 2008, according to research group IBISWorld. The market is expected to boom an annual 6.8% for the next five years. California is home to 10% of all juice establishments nationwide, followed by Texas with 8.1%, IBISWorld found.

PepsiCo Inc., with brands such as Naked, Tropicana, Ocean Spray and Dole, is the juice market leader with 35.7% of sales. Coca-Cola Co. grabs 28.2% of revenue via brands such as Odwalla and Minute Maid. Dr. Pepper Snapple Group Inc. claims 8.3% of the market with Snapple, Mott's and Welch's.

But the kinds of juices gaining the most traction are the high-end, multi-hyphenate mixtures that Evolution Fresh is trying to sell. And major labels beyond Starbucks are also catching on.

In February, Jamba Juice branched beyond smoothies and began selling a variety of juices squeezed on the spot using fresh produce such as pineapple, beets and kale. Dunkin' Donuts started offering not-from-concentrate orange juice in May. Krispy Kreme added fruit juices to its roster of items in 2011.

Los Angeles-based chain Robeks has been incorporating more seasonal ingredients and customization into its beverages. In January it debuted a menu with 20 new products. There's also a menu for children.

The company has enjoyed 22 straight months of same-store sales growth and is expanding to new locations, including into yoga studios, Chief Marketing Officer Chad Bailey said.

Although he thinks juice cleanses often "taste pretty horrible," he said the surge in upscale juice shops has sparked "kind of an awakening" in consumers accustomed to snacking on high-fat, high-carb fast food.

"Cold-pressed juices and all the other juicing that goes on out there only continue to benefit the industry as a whole," Bailey said. "It makes people want to integrate those things into their lifestyles."

Evolution Fresh was sold in 2,000 outlets last year, half of them Starbucks stores, most on the West Coast. Now the juice is available in 8,300 locations nationwide, including Whole Foods branches.

The Rancho Cucamonga facility will be Starbucks' sixth manufacturing site in the U.S. The factory will also be the company's only plant focusing on juice, made with ingredients mostly sourced from within 200 miles.

Of the 190 workers, 65 will hold newly created positions. The rest — research and development specialists, engineers, experts in Evolution Fresh's high-pressure-processing juicing method — will transfer from the San Bernardino plant.

Starbucks also began opening stand-alone stores dedicated to Evolution Fresh — three in Seattle and one in San Francisco. Evolution Fresh's Bruzzo declined to say whether the stores are profitable, but noted that the brand has seen a "huge revenue spike."

"We're selling substantially more juice than we did a year ago," he said.

tiffany.hsu@latimes.com

Twitter: @tiffhsulatimes

Copyright © 2014, Los Angeles Times
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