Anyone who has walked by a juice bar over the last couple of years — in other words, almost everyone — has noticed the strikingly high prices, often $9 or $10 per nutrient-laden beverage. How can this be? Have juice-bar owners figured out a way to swindle the kale-enraptured masses?
To understand how a few handfuls of veggies and fruit becomes a nine-dollar vitamin-delivery vehicle, it’s helpful to divorce yourself from the notion that you’re buying a beverage. Juice bars are serving up liquid food made with perishable, expensive ingredients — closer to gourmet vegan cuisine than a Starbucks latte. And unlike sodas and cocktails, made with shelf-stable ingredients that rarely fluctuate in price, juices are made from produce, ideally organic and local, that is purchased daily (or, in some cases, twice daily) and will quickly spoil if it’s not promptly used.
Juice-bar owners aim to keep their food costs at around 30 percent of the total retail price, similar to the margins restaurateurs aim for. A markup of more than three times might seem steep, but it has to support retail and office space, equipment, employees, marketing, and other business costs. “We’ve learned that if we’re reaching 40 percent, we either need to change the juice formula, or we need to change the price,” said Paul Salmon, the managing partner of Melvin’s Juice Box, an offshoot of hip Jamaican restaurant Miss Lily’s in New York.
Why not avoid the markup and make the juice yourself? Good luck with that. 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, 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.
Of course, juice-bar owners don’t pay Whole Foods prices, but they have other problems to deal with. Consumers demand consistency, both in menu offerings and price, but ingredient costs and availability fluctuate wildly due to the supply and demand that changes with each growing season, crop, and individual farmer. Adding to the problem, there are only a few suppliers of organic produce. As Salmon puts it: “If I don’t like the price for something at the restaurant, I can negotiate with a dozen vendors. Not over here in the Juice Bar.”
“There was a year that blueberries went berserk, and we had to raise prices 45 cents,” remembers Eric Helms, owner of eight Juice Generation locations. “We got hundreds of e-mails: So many people are regular customers, and they knew what their change was supposed to be.” When organic kale goes out of season in the winter, Marcus Antebi, a former competitive Muay Thai boxer who opened the Juice Press in 2010, swaps in non-organic and posts a sign noting it; he says the benefits of price consistency outweigh the complaints of the few customers who notice the difference.
Ideal markups are impossible to maintain across every single item offered, so Sudoku-like planning becomes necessary to make sure the menu balances out. “There are some juices which might cost me six dollars to put together, but unfortunately I can’t charge $15 for a juice,” says Antebi. “That means I need others which cost me less than $3 in ingredients.”
Organic Avenue, which helped kick off the juice craze in 2002, is taking inspiration from farm-to-table restaurants and trying out a seasonally rotating menu in an effort to become less reliant on specific ingredients. But most owners are still forced to take a price hit on certain menu items. Young Thai coconut is so popular that, last year, Juice Generation was charging $3.95 for the coconut water from a single coconut, even though the coconut itself cost almost five dollars wholesale. Helms didn’t bother changing the price, and potentially losing customers, because he knew he would only take a short-term loss. “I’m not saying it’s extortion,” Salmon adds. “But I’ve seen coconut prices rise 20 percent in one day, which hurts when you’re dealing with such tight margins.”
It’s this roller coaster that drives owners to secure stable pricing on any aspect of the business they can. For those that make juice items to order, it’s basically a given that you have to use clear biodegradable cups that you can order in bulk, in hopes of bringing the price below twelve cents. Biodegradable straws are also ordered en masse. (Traditional plastic cups and straws are half as expensive, but bad P.R. for a shop selling organic anything.) Melvin’s Juice Box recently bulk-ordered 100,000 stickers for their cups, which reduced the per-sticker price by as much 33 percent — even though they have no idea where they will store them all. Juice shops that start bottling have to deal with even more price headaches: Juicers can cost $5,000 upfront and require weekly maintenance; bottling also requires additional labor and space. (Organic Avenue leases an extra 16,000 square feet in Long Island City for bottling and raw-food prep.)
So why even get into the business? Well, because people will pay, especially New Yorkers who, more and more, are swapping out $3 daily lattes in favor of $9 juice trips each morning — though there’s no clear evidence that extracted juice is more efficient for your body, or healthier than regular fruit and vegetables. Still, every owner I spoke to for this story justified his or her prices, at least in part, based on the supposed vitality of the product, and the profusion of packed juice bars is a testament to how much the trend has caught on among a certain breed of young, affluent, health-conscious consumer. It’s a placebo effect, maybe, but one that makes it easier for juice bars to justify their premium prices.
And if you ask Melvin Major Jr., who has such a cult following that Miss Lily’s put his name on their shop after poaching him from a competing health store, there’s one aspect of this equation that will remain constant: “Some people cannot afford organic, and it’s expensive, but it’s not in our hand to control the market,” he says. “Life is not all smiles.”
Related: The Iced-Coffee Economy: Why the Cold Stuff Costs More
Related: The Big Squeeze: The juice-bar craze reaches every-corner status.