Strategic Supply Chain Management - Supply Chain Online

158 Strategic Supply Chain Management
company uses more than 10 million pounds of frozen strawberries, 6 million
pounds of frozen bananas, and 27 million pounds of fresh oranges
every year.
While this may sound like a huge quantity of fruit, Jamba Juice competes
for the growers’ attention with many other companies, such as beverage
manufacturers who sell fruit-based products and large producers of
other products with high fruit content, such as pies and jams. In addition,
the same growers who supply fruit for these companies also sell to supermarkets
and restaurant industry distributors.
Strawberries are a particular challenge in that they are a very popular
choice among supermarket shoppers. The supermarket channel also offers
the greatest margin for the growers, so it is no wonder that of the 1.4 billion
pounds of strawberries produced each year within the State of
California, approximately 75 percent are harvested for the fresh market,
whereas only 25 percent are frozen for the processed market. 11 There is a
common perception that a strawberry’s size is directly related to its taste
and sweetness, with bigger berries considered sweeter and riper. In actuality,
a strawberry’s flavor is determined by growing conditions (such as
weather), stage of ripeness when harvested, and variety. Despite this reality,
much of the agricultural research done by grower consortia is focused
on breeding fruits that will be appealing to the retail grocery shopper. This
means larger strawberries.
The same strawberries that are so appealing to the retail grocery
shopper cause major headaches at Jamba Juice. “They’re just too big,”
explains Anne Kimball, Jamba’s director of supply chain management.
“They are difficult for our blenders to handle, they don’t fit in the scoops
we use, and the inconsistency in the size results in variability of texture,
flavor, and color of our smoothies.”
Since Jamba Juice does not have the ability to influence the development
of these new strawberry varieties, they have turned to their processors
for help. Frozen fruit processors are the produce industry’s equivalent
of contract manufacturers: They wash, sort, and package frozen fruits and
then sell them to distributors.
Strawberries must be frozen as soon as possible after picking to
ensure that the best flavor and appearance are retained. In most cases, the
berries are sliced, pureed, or kept whole for freezing. Processors have specialized
equipment for these three options. And Jamba needs a fourth
“form factor”—berries that are broken up into fairly large chunks but still
maintain their fruit identity to the retail customer, who could watch his or
her smoothie being created.