This is a question we get asked a lot here at SmoothieCompany.com.
How do you structure your pricing for a smoothie at your business? Well, there are a lot of variables so let’s get started.
1. What is your surrounding population like?
Do the individuals value inexpensive, processed, foods? Do they appreciate a more natural product that still tastes great? Or do they prefer all organic items made at home? Knowing your customer and the depth of your target market is the first step in calculating how much you can charge for a smoothie at your business.
Often, our customers can say that they are located in a wealthy neighborhood so they assume they can charge premium prices but we’ve found that that’s not a deciding factor in forecasting for business. Millennials spend more money on food than ever and value a more natural product but do not necessarily live in the most affluent neighborhoods. Wealthier neighborhoods tend to have families, which means your customers may be more interested in going home to cook traditional meals instead of opting for a smoothie. It all depends on what your available customers value personally.
2. What products do you plan to use?
Are you using whole fruit only? You are likely to generate large amounts of waste which can cramp your margins so you will be forced to charge higher prices but are justified in doing so because it’s all natural. Are you using a shelf stable puree like the ones we offer at SmoothieCompany.com? You will be able to charge a lower price but still maintain 60-70% profit margins while offering a product that has a more natural taste.
Are you planning to add protein? A quality powdered protein is valued in Western culture. We’ve been taught to include protein in our diets over the last decade so increasing the selling price of a smoothie by at least $1 for 10-20g of additional protein is common practice.
3. How strong is your brand and how is it perceived by the customer?
A logo is a must to cement your products and offerings in your customer’s minds. A menu board that is in line with your offerings is important too. Are you offering smoothies made with real fruit only? If so, then a chalkboard menu board that looks rustic and natural can certainly enhance your brand. Are you a gym offering protein and supplements? If so, then a professionally designed menu system that is sleek and attention grabbing will give your customers more confidence in purchasing from you.
4. What is your cost of goods?
This is the most important factor when deciding how much to charge. You must know what it costs you to make a smoothie from raw ingredients to finished product because your #1 goal is running your business. If you don’t price according to cost then it is unlikely that you will be able to keep your doors open.
These are all things to consider when determining a sell price at your smoothie bar. When in doubt, try to find similar offerings in your area and gather pricing info as a starting point and don’t forget to adjust for varying sizes.
At SmoothieCompany.com, we are committed to providing our customers with the tools to make a great smoothie and run a successful profit center. If you’re interested in adding a smoothie bar to your facility or would like more information, contact us here.