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Jamba halts fledgling retail beverage program

EMERYVILLE Calif. Jamba Inc., parent to the 700-unit-plus Jamba Juice chain, said it has suspended its ready-to-drink retail beverage products because of manufacturing and production issues.

The drinks were introduced this summer in grocery and convenience stores throughout California, Oregon, Utah, Nevada, Arizona, Idaho, Washington and Colorado under a partnership with Nestle SA. The retail component to the Jamba Juice brand was developed as an additional revenue stream to aid the chain’s falling restaurant sales. It was deemed a success from the start.

“Since the launch of ready-to-drink six months ago, Jamba carved out a firm foothold in the super-premium juice category,” James White, Jamba’s president and chief executive, said in a statement. “Customer sell-in and feedback exceeded expectations... While this is an unfortunate event, this suspension will provide the opportunity to evaluate new manufacturing solutions, which could enable the Jamba brand to secure an even stronger position in ready-to-drink beverages.”

The suspension was blamed on challenges with consistent manufacturing and inventory issues, the company said. The statement indicated that the program would be re-assessed and “come back stronger and positioned for success in the future.”

The Jamba Juice chain has been hard hit by a sales slump throughout most of 2008, particularly in its home state of California, where a severe housing-market collapse and the roiling economy dampened consumer spending. The company is scheduled to report its fourth-quarter and full-year results on Dec. 30.

The smoothie specialist has worked to increase menu offerings, especially during the breakfast day part, and most recently rolled out oatmeal. Last summer, the company’s board orchestrated a management shakeup in which longtime chief executive Paul Clayton was ousted. Current chief executive White, a former Safeway Inc. branding executive, was named Jamba’s leader in November.

In other management news, Jamba said Wednesday that Paul Coletta, its senior vice president, chief marketing and brand officer, will step down to pursue other interests. Coletta had been with the company since 2006. His roles will be “assumed by existing management and team members,” Jamba said.

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