Is a Smoothie War Breaking Out?

Burger King Worldwide (NYS: BKW) may be late to the smoothie game, but it's hoping to make up for lost time.

The burger-flaming giant spent the entire Labor Day Weekend promoting the line of blended fruit drinks that it introduced earlier this year. Charging patrons $1 for a small serving is less than half the price that McDonald's (NYS: MCD) charges for its McCafe smoothies. Jamba (NAS: JMBA) and Starbucks (NAS: SBUX) charge even more than that.

The BK Real Fruit Smoothies promotion ended today. Don't expect to grab a chilly fruit drink for a buck at your neighborhood Burger King now.

However, it's a safe bet that the fast-food chain sold plenty of smoothies during the hot summer holiday weekend.

Is Jamba breaking a sweat right now?

Probably not. Keep in mind that Jamba's actually been benefiting from the arrival of competitors using drive-thru convenience to serve as ambassadors of the fresh fruit beverages.

Same-store sales climbed 6.4% at Jamba's franchised stores in its latest quarter, and that's no fluke. Comps have been running positive for eight consecutive quarters at franchised-owned locations.

As fruit-thirsty patrons seek broader variety than the two to three smoothies available at McDonald's, BK, and Starbucks, demand is intensifying for the stand-alone purist. There are now 31 more Jamba Juice locations than there were a year ago.

Obviously this is a trend that will bear watching. If Burger King or McDonald's ever begin slashing prices on their smoothies as loss leaders -- or if Starbucks takes an aggressive pricing stance to win over more parents looking for non-java alternatives for their kids -- it may eat into how much Jamba can charge.

However, for now, consumers don't have a problem paying for Jamba's blended treats and growing menu of active-lifestyle food products.

There's a reason why Jamba shares are trading 89% higher this year, but the company can't get cocky now.

Blended just right
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