Smoothie King: A Noble Enterprise

Juiced Magazine, August 2000

For their kingdom, Steve and Cindy Kuhnau have worked many years. Both explained that their foray into smoothies started as a quest to relieve personal health problems. Steve was plagued by hyperglycemia and, after getting no relief from conventional medicine, turned to nutrition and fresh foods. He then drew upon his high school job experience as a soda jerk at a local drive-in, where he experimented with high protein drinks and blenders to make smoothies for his Town & Country Health Foods store. Cindy, on the other hand, joined Steve's staff in 1985 after a 12-year career in health foods, which began in reaction to her son's allergy problems. She had successfully helped her son improve via vitamins and was devoting her life to a lifestyle of nutrition and health.

These two future smoothie nobles made a great pair (they married in 1991) and began to build an empire around the smoothies they served at Town & Country. By their own avowal, Steve and Cindy have separate, but complementary, talents. Steve's creative spark and Cindy's drive and structure led to the first Smoothie King franchise that opened in early 1989 in Louisiana. Three other stores followed quickly, and the growth spurt began.

Since then, Smoothie King has grown mostly through franchising and now numbers 220 stores in 22 states. Only a handful of those stores are company owned. The company expects to add 30 to 40 additional locations in the next year. It recently received a decent-sized boost when it acquired 10 to 15 prime locations of Frozen Fusion, a smoothie operation based in Scottsdale, Ariz. (where for former New Orleans Saint football player Irv Smith opened six Smoothie King franchises in the mid-90s.) These high caliber locations include Las Vegas, Phoenix, Philadelphia and Washington D.C., many of which were areas previously targeted for Smoothie King expansion.

Richard Leveille, executive vice president in charge of franchise development, explained that Smoothie King is looking toward additional expansion in the southern Midwest, the East Coast and the inland West (non-coastal). He noted that the hot spots for smoothies have been just that - hot spots; smoothies have done well in the South, Southeast and the West. But as more Americans become invested in their well being, and more people have realized that quality functional smoothies can offer a great health benefit, the smoothie market has begun to reach colder climates. According to Steve, Smoothie King's number one store is located in New York. He expects more stores to surface in similar regions.

Leveille noted that growth depends largely on location. Good franchisees have not been hard to find, but good locations have been more elusive, as quality retail space in America is scarce, and many concepts vie for the same prime spots.

Smoothie King has managed to gain good spaces, despite the challenges. Typically, the company opens new stores in the heart of a retail area that is abundant with meal options. Furthermore, its stores perform best in the midst of highly competitive environments.

"We cluster with all the fast food and meal outlets where people gather for lunch," Steve said. "This way people can have an option for an alternative product; people need choice."

And choices are what people have. Since his first concoction in the early 70s, Steve has created more than 50 smoothie recipes. He worked with customers and incorporated all the most up to-date knowledge from the natural health and wellness industry. "We are always reading about the latest nutritional products," he said. "We are excited about the field of nutrition." He added that he considers the quality of popular nutritional ingredients, including supplements, but only uses them when such substances would be effective and an added value to a smoothie.

Smoothie King is a hybrid of two concepts: natural supplements and blended fruit and juices. "We work on function-immune system, electrolytes, high protein and functional ingredients," Steve noted. "People can design their smoothie to meet their needs. That means a lot." He stressed that his years of experience in the smoothie business have taught him that accommodating the customer is key. And his customers seem to revel in the opportunity to boost their health. "Incorporating natural health products was never a challenge for us, because we live it," Steve said. "About 80 percent of our office takes supplements, and we are always reading about the latest products."

After devising a recipe, the company tests it with customers in certain markets before rolling out the product. After a few months of testing in markets such as Houston or Dallas, the company gets concrete market data. This process of developing a smoothie product ensures quality and success, according to Smoothie King developers.

"I think everyone in this business should do their homework and complete some research and development before they go whipping up smoothies," Steve said. "Machine smoothies using a mix, as opposed freshly blended ingredients, do a disservice to the smoothie industry."

The key to success in this business is evolution, according to Leveille. "To be a good franchisor, we have to evolve our product line, as tastes and needs change," he said. He noted that years ago, the company recognized a growing consumer favor for high protein/low carbohydrate diets, such as the popular Atkins Diet. The company met the trends with a bevy of high protein smoothies and continues to monitor emerging trends in the health and wellness sector. Most recently, Smoothie King launched a line of smoothies, sized and formulated especially for kids. These drinks serve as a good method for getting kids to take important vitamins.

Coupled with offering functional smoothies is providing education. While only 10 percent of his customers ask in-depth questions about the nutritional aspect of the smoothies, the company felt it was important to provide detailed nutritional information about its products. it produces a pamphlet that outlines such data, including calories, fat, carbohydrates, protein and vitamins. This nutritional information is the result of complete analyses by Heart Smart international. In fact, almost all of the company's smoothies bear the Heart Smart symbol.

In the end, Steve Kuhnau and Richard Leveille reported that 90 percent of Smoothie King's success is credited to quality products, great customers and pioneer-spirited franchisees. "It is a real pioneering effort to go out and compete against big fast food restaurants," Leveille admitted. In fact, competitors are any food or drink operation, according to Steve. The Kuhnaus convey great pride and joy in Smoothie King. Their hard work and dedication has not gone unnoticed. Entrepreneur magazine has ranked Smoothie King number one in its industry every year since 1992.

Now that's a reign.

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