Jamba will only get 3-4% of the price of those smoothie kits. And it might even be lower than the retail price. Because Whole Foods is buying it from Inventure and marking it up. So the 3-4% is of a smaller amount than 3-3.50.
However, Jamba has no costs or capex associated with the rollout so it is pure profit. But it will be negligible. Even if 1 million kits are sold, it will barely budge profits. Inveture group, on the other hand, may benefit quite a bit. Look at TGIF Fridays brand. $40 mil in rev a year from those snacks.
here's james white speaking at the icr exchange conference which took place earlier this year in dana point:
"if you look at California pizza kitchen almost one third of their profitability is in their consumer products group, if you look at starbucks almost 20 percent of their profitability is in their consumer products area and I would submit to you that the jamba brand is more powerful than either one of those brands to play in a broad way in a consumer’s lifestyle in a pretty aggressive way"
being a healthy lifestyle brand broadens the reach of jamba's consumer products. when white presented at piper a year or so ago (i think it was at a piper conference) he shared a slide with the audience which showed a dozen or so market categories which jamba was actively pursuing with partners. im not even sure the smoothie kits were included in that particular slide. each one of these items will eventually become a low risk/no cost/high margin annuity for jamba. they've already announced frozen novelties, smoothie kits, toys, apparel, trail mix and nestle (which has the potential to be bigger than all of these combined). white also mentioned in the last call that it was the company's intention to announce additional cpg's this year. any one of these products alone won't be meaningful to the bottomline but if you look at the whole group the numbers get very interesting. white has stated numerous times that this can be a billion dollar business for jamba. now do the 3 to 5 percent calculation on a billion. now take the core-mark partnership, jamba's line of grab-n-gos entering the convenience store channel (over 20k stores) and add up those incremental fees. all this is happening while they are improving the store business by introducing new menu items across all day parts while slashing costs. with hot drinks (coffee) jamba becomes increasingly attractive to new franchisees. the jamba story looks bright. the weak economy and a fragile consumer are the elephants in the room but i think larger investors have begun to warm to the jamba story. disclosure --- because of my long position i have lost the ability to discuss jmba with much objectivity.