Marissa Fritz
Mrs. Straub
Economics
22 May 2014
Jamba Juice And Their Prices: Buy Or Make Your Own?
If you’ve driven through Brookfield or Madison recently, you may have seen a new juice bar that has been gaining momentous popularity. Jamba juice has recently been extending it’s chain to areas all over the country. If you have never visited, or never heard of Jamba Juice, here’s a little background on the company from Businessweek.com: the juice bar, native to California, opened its doors in 1990. It was formerly known as Juice Club, Inc. but changed its name to Jamba Juice Company, Inc. in 1995. They’re known for their whole fruit smoothies, fresh-squeezed juices and juice blends, coffees and teas, boosts, shots and sandwiches. 
But if you’ve ever visited a Jamba Juice, you’d also know that they’re notorious for their high prices. Although smoothies seem like something that many people would choose to enjoy on a typical day, there’s definitely excludability in purchasing anything from the company. In fact, according to an article from The Washington Post by by Sarah Kliff on May 31, 2012, “Juice bar prices can feel
outrageous, sometimes ranging into double-digits just for a single drink.” So are we being swindled when we buy one of their overpriced drinks? Is our opportunity cost higher or lower when debating between purchasing Jamba Juice or just making our own food?
Kliff continues her article on Jamba Juice by finding the answer to that particular question, “If you went to Whole Foods and bought enough organic lemons, Granny Smith apples, celery, ginger, green chard, kale, and collard greens to make Melvin’s signature Body Good, which costs $9, you’d be out about $17. Given the various bushel sizes and prices per weight, you could eventually bring the cost down to around nine bucks per juice”. So there you have it! You can make your own smoothie for about the same 
cost...but wait... that’s before we factor in the Factors of Production. You could lower the price, “but only if you made nine or ten servings at a time. And that doesn’t include the $100-plus investment for a basic juicer; commercial-grade cold-press machines are closer to $300.”
So when you visit Jamba Juice and notice that they’ve raised their prices again, it’s important to remember that “a markup might seem steep, but it has to support retail and office space, equipment, employees, marketing, and other business costs.” So is your opportunity cost lower if you were to buy their smoothies instead of making your own? Well if you want something of that quality, then the answer is yes. Besides, their food tastes good, is good for you, and you don’t have to do any of the clean up.
Sources:
- Kliff, Sarah. "Jamba Juice economics."Washington Post. The Washington Post, 31 May 2012. Web. 22 May 2014. <http://www.washingtonpost.com/blogs/wonkblog/post/jamba-juice-economics/2012/05/31/gJQAS6WQ4U_blog.htm
I agree that Jamba Juice prices are very high for even a small smoothie. One thing to think about is the fact that it is much more convenient to get up in the morning and make your own smoothie as apposed to driving our to the closest Jamba Juice which isn't as abundant as Mc Donald's. Even though it would cost more to buy the goods at the grocery store, those goods would also make a lot more than one smoothie which would actually end up lowering the cost even lower than Jamba Juice. It makes you wonder if these high priced drinks will continue to be in as much demand as time goes on.
ReplyDeleteI myself am very big into juicing, it's a great way to start your day in the morning. I myself make juices more out of vegetables and little fruit compared to the other way around. Although it may be a little pricey to buy all the ingredients and machines to make the smoothie I think it is worth it because not only are you saving money in the long run but you are getting all the nutrients in the smoothie without the taste of the vegetables.
ReplyDeleteI think it's really interesting that we always hear about how much money we can save from not eating out and from making food ourselves, yet there's finally a case where this isn't true. I think it would be economically beneficial too if people were to buy the smoothies instead because it increases consumer spending and the business investments to raise our GDP. It may take consumers some time to realize the lower opportunity cost though, which could explain the currently decreasing quarterly revenue. Nice article!
ReplyDeleteI completely agree with the fact that Jamba Juice is overly priced. I work right now the street from the one in Brookfield and it is somewhat tempting to be go there and try a new flavor. Although they are very healthy for you, I have a hard time justifying over $5 for a small smoothie that I can probably make myself. Since their prices are closer to Starbucks though (even if it is a dollar more), it is much healthier for you and for that I would spend an extra dollar. They are good for a refreshing treat once in a while, but not worth getting more than twice a month.
ReplyDeleteThis was a very good topic to choose considering the rapidly rising popularity of Jamba Juice. Thinking about their menu, their prices are indeed outrageously high. Yet, people seem to gravitate towards it regardless of the prices. This is because people have already considered the opportunity cost, and made their decision. Even though in most cases it may be cheaper to do it yourself at home, organic smoothies aren’t one of those cases, so Jamba Juice will most likely continue to get more popular despite their prices.
ReplyDeleteAlthough the price might be set at a high level, in relation to the costs they pay for rent, ingredients and human capital, it is reasonable in order for the chain to bring in a good revenue. They could be raising their prices much higher, as the graph shows that their revenue has been decreasing, but the owners likely know that if price rises, quantity of demand decreases, so Jamba Juice would possibly be making even less money if they raised prices more.
ReplyDeleteTo be honest, I had never heard of "Jamba Juice" before reading this. Should I be ashamed or...? Anyways, I'm sure they're a small business that has potential to expand; their prices can go down if this happens. Why else do you think McDonald's and Taco Bell have obscenely low prices? They're multinationals that can pool their resources from all over the world and reduce the cost of production significantly. Jamba Juice is nowhere near that type of opulent status--meaning that they're going to need to sell their products at a higher price to compensate for their expensive and developing operations.
ReplyDeleteThis is a great topic because Jamba Juice makes fantastic smoothies. It is very expensive, but I feel as though costumers go there looking to treat themselves to a good quality smoothie. Their prices are high because they spend a lot of money on healthy ingredients. Jamba Juice doesn't take the easy way out. Costumers reward them for that by paying a little extra. If a costumer wants a cheap smoothie, they can easily go to McDonald's or another fast food restaurant; however, that smoothie will lack taste compared to one from Jamba Juice. I guess it just depends on how picky you are.
ReplyDeleteI actually just went to Jamba Juice in Madison over the weekend. There no question as to whether or not it was worth spending the money because their smoothies are so good the answer was definitely yes. When I go there I know it's going to be expensive but like Kelly said, I'm willing to treat myself. Sure their prices are higher than say McDonald's smoothies but they buy healthier, organic ingredients which are much more expensive than typical ingredients bought in bulk and therefore the opportunity cost of Jamba Juice is much higher. Great topic!
ReplyDeleteI think that no matter how expensive Jamba Juice is, with exception, people are still going to spend their money on it. Like starbucks, whether or not it's expensive, it's sometimes nice to treat yourself, like everyone else is saying. Not to mention, the smoothies taste great, and they're good for you. Therefor, I really don't think that the price is really a problem because the amount of product used in each smoothie, and the amount of smoothie you get, really makes sense with the price.
ReplyDeleteJamba Juice is seriously one of the best things in the world! Every time I go there, I am never disappointed! I think that it is a great idea for them to expand their market because so many costumers love it. Before the Jamba Juice opened in Mayfair Mall, it was very difficult for me to find one in close proximity. Now that they are expanding I think that this will most definitely increase their sales by at least 30% or more. The more shops that they open up, the more regular costumers they will get, just like Starbucks. Who doesn’t love a morning smoothie on the way to work or school?! Their profit margin will increase, so I say that they should try to expand as much as they can! Gotta love Jamba Juice(:
ReplyDeletePersonally I think Jamba Juice is overrated. It's way to expensive for a single drink. and I agree that you can get a better opportunity cost than a smoothie. Although some drinks they sell are healthy which is good for our society. With the expansion of the shop, there will be a lot more costumers that can try and get hooked on it like many others.
ReplyDeleteAs I am an avid believer in Jamba Juice, I do agree that they are over priced and outrageously expensive. However that does not stop most people especially me from enjoying their smoothies. The amount of money that I spend there is insane, but it is also helping the company grow, which in turn helps the economy grow. So either way, whether you're spending the money on a smoothie or on fast food, you are still spending money and putting money into the economy. They are expensive, but they are smart about their products and very popular.
ReplyDeleteI have never personally been to a Jamba Juice before but it reminds me of Starbucks, people of older generations think it is outrageous that teenagers spend the type of money they do at Starbucks for a cup of coffee, and I agree. But like you said, it was all about the quantity. Overall, people will not stop buying these juice products because they think of it as a need rather then a want. Even though prices are ridiculous there, and Starbucks, the boost in the company is an overall boost in the economy, which benefits everyone in the end.
ReplyDeleteI have not been to a Jamba Juice, but by looking at the comments being posted, it has very good tasting beverages despite its high cost. Personally, I would never pay so much for a drink. I do not feel that any one smoothie can be worth as much as what it is said to be, no matter how delicious it is. I would much rather go to McDonald's for a cheaper smoothie or shake, and I still think the taste is fine. The high price of a smoothie will keep me away from buying one, no matter how good it may taste.
ReplyDeleteWith the obesity rate rising places like Jamba Juice are important. Their prices are high because they spend a lot of money on healthy ingredients. Even though it is expensive, healthy options are key in bringing down obesity rate. Just like any other product (Apple), if it is good people will pay any amount of money for it. If price is such an issue, there are plenty of other options to get a smoothie like McDonald's or just make it at home. Other options might be cheaper but they aren't the same quality as Jamba Juice.
ReplyDeleteI think that even if the prices do increase at Jamba Juice, people will definitely still continue to go there. It's like starbucks, the prices are kind of high but everyone loves it. I think that people think of it as more of a need than a want. Or the fact that Jamba Juice promotes healthy smoothies more people would rather go there than to a place that has cheap, unhealthy things. I have never been to Jamba Juice but by seeing the comments it's a very good place. It is very well known and obviously lots of people like it. So why would they stop going just because the prices increase a little bit? Exactly, they won't. Raising the prices would just do better for the company and the economy. Whether you are spending money on a smoothie or food or anything, all that money goes back into the economy. The more shops that open up, the more regular customers they will get.
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ReplyDeleteI live in the Brookfield area and when I saw that they were putting in a Jamba Juice I was really excited. I agree that the prices are not cheep however I have never spent more than five to six dollars on a smoothie. However smoothies from Jamba Juice are not as popular as say a cup of coffee from Starbucks or McDonalds. Due to Jamba Juice not being as popular the company probably has to keep their price high in order to keep up with the economic competition of other drink places. In addition Jamba Juice does not bring in as much revenue in one day as Starbucks therefore their prices will need to be higher. lastly on your comment about making smoothies at home I would a agree that the marginal cost of making smoothies at home out ways the marginal benefit.
ReplyDeleteObesity rates are rising faster than ever before, and it's important that places start to use more healthy ingredients. Jamba Juice has higher prices, but it's just like Starbucks, people are willing to pay that price because it is healthy and tastes good. Although there are tons of people that love going out for smoothies, I agree as well that it would be more beneficial and healthier if families were to make their own smoothies at their house. Jamba Juice does have a very good variety, and many locations that are easy for residents to get to, which also will make it easier for them to bring in revenue.
ReplyDeleteBeing a fan of Jamba Juice, this was a very interesting topic! I've been there several times and I've actually never really paid attention to the prices because I care more about getting a good tasting, healthy smoothie. Seeing as there are more and more of their juice bars being placed around the country, their income must be increasing. How much do they contribute to the economy though? Is it a large enough company to actually benefit the economy? I would think so because their smoothies and products are well worth the price!
ReplyDeleteWhile you make a good argument in the fact that making a few servings of your own costs the same as buying one, I feel that there are ways that you could get the cost of making your own down. For those people who won't drink anything but a smoothie that requires all of those ingredients, the price to make it yourself may be higher than or the same as the price set by Jamba Juice. On the other hand, why not just buy some bananas and strawberries, and call it a day? A simple smoothie would make a homemade smoothie much cheaper than buying one, plus the supplies to make it would be enough to make multiple smoothies. That way, the consumer reaps the benefit and is able to spend their income on something more worth their money. Sometimes it is nice to splurge, but it does not benefit the consumer to consistently buy $9 smoothies when they could get benefits elsewhere.
ReplyDeleteThis is a great topic to choose and Jamba Juice is starting to become more and more popular and also many people enjoy it. Jamba Juice is one of my favorite smoothie places and even though they have high prices I will still pay that amount because of how good their product is. They need to keep their company afloat so if having to raise the prices to do so I believe it's worth it. Their product lives up to their prices. Also making a smoothie isn't worth it because I won't be able to live up to the expectation of Jamba Juice. Great article!
ReplyDeleteI, too juice. I have a wide range of anabolic steriods flowing through my veins as we speak. I can feel my muscles pulsating and the acne sprouting in my face. I spend anywhere from $100-$200 a month on my cantaloupe size biceps. Juicing is the way to go, it benefits everybody, the users (like me) and the producers who are illegally selling their products to meatheads. It's a win, win.
ReplyDeleteThis is an awesome topic for your blog post. This topic is much different than anything else which is awesome. After reading the title and knowing the prices of Jamba Juice's menu, I for sure thought it would be much cheaper to just make your own. After looking through your facts, and reading your evidence it is awesome to see that it is about equal, and would take time to make them equal after investing in the equipment. It will always be a better option to just buy at the store rather than make it yourself because it will definitely taste better, and will give people jobs.
ReplyDeleteJamba Juice have very expensive smoothies, however, I was very surprised at the statistic that showed how much they actually cost to make. I always figured that they were very over priced, but when you step back and look at how much it really costs to make one, they are reasonable. They have to make a profit and that is exactly what they're doing. There are many ingredients that go into their product and that is exactly what the consumer is getting for their $6-$10. They are not overpriced; the ingredients in the smoothies are expensive themselves and the store must make a profit. Overall this was very interesting and you had very good evidence.
ReplyDeleteNever have heard of Jamba Juice sounds interesting though. As the looks of it they have been building more and more of them and I think that that is great. Not only does Jamba make great smoothies it also is a great cause to the economy. The more they build them the more attention they will draw causing more and more people to spend money and help the economy not only that its helping with jobs as well with unemployment
ReplyDeleteFor their prices to be so high and also competing with other companies, it's supprising that many people choose their over priced smoothies then a different places. Personally, I feel like Ballistic Beans Cafe in Brookfield Square Mall is so much better, and their smoothies are bigger and exactly $4.00. Also, Starbucks probably has cheaper smoothies. People are mostly paying for the organic fruits, and the brand name.
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