By Lisa  Jennings

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Jamba Juice's Smokehouse Chicken Flatbread

EMERYVILLE, Calif. (June  11, 2009) Jamba Inc. next week will begin rolling out a line of sandwiches, salads and flatbreads in what company officials described as a dramatic transformation aimed at reversing declining sales at the smoothie chain.

Jamba has been testing the food offerings, which are all priced at $5.50 or less, in six stores over the past few months. The company said Thursday that the grab-and-go wraps and salads and made-to-order flatbreads would be rolled out to 222 mostly company-owned locations across California, with the goal of adding the menu items to the chain's 732 locations within the next year.

Jamba officials said research showed some customers don't feel a smoothie alone makes a meal, forcing them to go elsewhere for food.

"We have customer data that says people want to eat their smoothie with food," said Kim Larson, Jamba's vice president of marketing.

The new menu debut follows a $35 million stock sale, expected to close later this month, which included a $19.55 million investment from New York-based private-equity firm Mistral Equity Partners and $15.45 million from the Serruya family, the founders of the Canada-based Yogen Fruz frozen yogurt chain.

The sale is expected to raise capital for the rollout, which includes the addition of new turbo ovens to Jamba Juice stores for baking the flatbreads.

Jamba's new menu items will include a line of ready-made wrap sandwiches with dipping sauces on the side, such as Asian-Style Chicken, with grilled chicken breast, lettuce, shredded carrots and jicama wrapped in a tomato tortilla with mango vinaigrette; and Chimichurri Chicken, including chipotle-lime marinated chicken, lettuce and sweet corn in a herbed tortilla with chimichurri sauce. A Gobble'licious turkey sandwich will feature sliced breast meat with provolone, lettuce and red bell pepper on focaccia with Dijonaise on the side.

A vegetarian option called Greek Goodness includes feta cheese, kalamata olives and lettuce in a beet tortilla with a Greek vinaigrette. For vegans, the Grains and Greens wrap includes red quinoa with hummus and lettuce in a spinach tortilla with the mango vinaigrette dipping sauce.

Jamba also will offer two salads, including Caesar the Day, a Caesar salad with chicken breast, asiago cheese and herbed croutons; and Couscous Produce, with Israeli couscous, jicama, red bell pepper, currants and sliced almonds.

The sandwiches and salads are all priced at a recommended $5.50 at company-owned stores.

A line of baked-to-order California Flatbreads will also be available featuring various toppings on a crisp crust. Variations include the Four Cheesy, made with with tomato-basil sauce and a four-cheese blend; a Smokehouse Chicken, with barbecued chicken, corn, black beans, chiles, red bell pepper, mozzarella and cheddar; a Tomo Artichoko, with tomato sauce, artichoke hearts and three cheeses on a flaxseed crust; and a MediterraneYum with feta, vegetables and mozzarella on a flaxseed crust. The Four Cheesy will sell for a recommended $3.50, while the other flatbreads will be priced at $3.75.

By Lisa  Jennings

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Larson said all wraps, salads and sandwiches will be made in commissaries by a third-party supplier, which Jamba declined to identify, and delivered daily to stores. The flatbreads, made by a second supplier, will be delivered frozen to stores and baked to order.

The new menu items follow Jamba's emphasis on healthful living, with no artificial flavors or preservatives used, as well as no high-fructose corn syrup or trans fat.

Brian Lee, Jamba's vice president of innovation and quality, said most consumers would be surprised how many breads contain high-fructose corn syrup and how many sauces use artificial preservatives.

"Our products use none of these," he said. "Not everyone has this level of commitment."

Last week Starbucks announced a new food lineup without the use of artificial flavors or dyes or high-fructose corn syrup. Other smoothie chains, including Manhattan Beach, Calif.-based Robeks, have long offered a limited menu of sandwiches and salads.

Jamba also said it would expand its drink menu to include Fruit Tea Infusions, which are made with organic green tea and natural fruit juices with a splash of lemonade and served over crushed ice. The new drinks are made without high-fructose corn syrup and contain about 160 calories per 16-ounce serving. Flavors include pomegranate, passion fruit and prickly pear.

James White, Jamba's chief executive, said food has the potential of reaching about 20 percent of store sales. In the past, food offerings at Jamba Juice have been limited to a handful of baked goods, pretzels and bagged snacks, which officials said accounted for a very small part of sales.

Earlier this year, the company added steel-cut oatmeal to the menu at a recommended price of $2.95, an item that Larson said "strongly exceeded expectations" for sales and has helped build traffic at both breakfast and lunch.

"It's not just a breakfast daypart item," Larson said. "People find it makes a filling hot lunch."

Like others in the snack segment, Jamba has suffered in the economic downturn, as cash-strapped customers cut treats like smoothies out of their budgets.

For the April 21-ended first quarter, Jamba reported a net loss of $10.2 million, or 19 cents per share, compared with a loss of $6.4 million, or 12 cents per share. Revenue for the quarter fell 12.5 percent to $88.9 million, and same-store sales at the chainÕs 499 corporate units declined 13.8 percent.

The addition of a more comprehensive food lineup comes with a renewed emphasis on franchising, particularly in non-traditional locations. Jamba said the company plans to refranchise 150 company-owned locations to help pay down debt and finance growth.

Jamba is also developing licensing partnerships. A ready-to-drink beverage is in the works with Nestle, for example, and last month the brand lent its name to a soon-to-be-developed line of frozen novelties, as well as a toy blender for kids to play Jamba Juice at home.

Contact Lisa Jennings at ljenning@nrn.com.