Acton in Action: Growing with Daily Juice

OCTOBER 1, 2014

While they’re enrolled at Acton, students practice making tough decisions and analyzing complex and confusing data day in and day out. They step into the shoes of entrepreneurs in hundreds of real-life business cases, including many focused on growing companies and financing that growth.

With our “Acton in Action” series, we check in every so often with our alumni. We find out how lessons learned at Acton come into play after they’ve left the classroom and see what results they produce in the real world.

We just caught up with Rob Larkin (’07), cofounder and COO at Daily Juice Group, a fresh organic juice and smoothie maker based in Austin, Texas. He shared his company’s current national expansion plan with us, told us how they’ve prepared the concept and business to grow quickly through the franchising model, and explained how his time at Acton and the frameworks he learned there have proven critical to the success of both him and the company.

Dossier

Company: Daily Juice Group

Acton Alumni: Rob Larkin (’07), cofounder and COO

Founded: Daily Juice in 2003; Daily Juice Group in 2011

Headquarters: Austin, TX

Employees: 14

About: Daily Juice has been providing the freshest and purest juices, smoothies, and organic products in Austin, Texas since 2003. In 2011, the Daily Juice Group was formed to perfect the operation and expand it nationally, bringing Daily Juice’s popular and nutritious flavors to a larger audience.

Opportunity

After working closely with the Daily Juice product and concept, Rob’s team recognized a larger opportunity for the store and the niche it was in.

“In the juice business, we saw it was dominated by all these mom-and-pop store operators with one, two, or three juice bars. It’s true here in Austin, but also in New York, Los Angeles, Miami, Arizona, and other markets. There are a lot of them, but they’re all very focused on this very niche crowd, a small percentage of the population,” explained Rob. “And that customer is typically already educated, probably makes their own juice at home, is very particular, and has an intense knowledge about the product.”

Through constant media coverage of healthy eating, and the popularization of natural foods in grocery stores, more and more Americans are seeking healthy and tasty meals and meal replacement options.

“A mainstream audience is starting to want to tap into this niche, but it doesn’t have access to the products,” said Rob.

While there are other smoothie brands in the US, they are not focused on delivering truly nutritious, purely organic, fresh products.

“At existing national chains, you’ll find the smoothies are loaded with refined sugar and that juices are an afterthought,” explained Rob.

“At Daily Juice, you get something that’s not going to make you fat and will deliver nutritious food. Plus, you’re going to enjoy the experience. You’re not going to feel scared, like you’re walking into a place where a bunch of hippies hang out. You feel comfortable. It’s clean. It’s a friendly environment. There’s upbeat energy and hopefully you leave with more energy than you came in with.”

“We’re taking our product to a huge pocket of customers who are looking for it, but don’t know where to find it.”

Daily Juice set the aggressive goal to open 100 stores by 2016, with the first expansion stores happening in Dallas and Houston this year, followed by a move outside of Texas in 2014. To grow rapidly, they chose a franchise model.

“Franchising is a tried-and-true way to fund and grow your business,” said Rob. “We recognized that our growth must happen quickly, and this allows us to do it without raising US$100 million or more from equity investors.”

Perfecting the guest experience and bringing it in line with the quality of the company’s product was the first order of business. For Daily Juice to expand rapidly, the operational model, store design, and message had to be refined.

“We looked at what Daily Juice had been since 2003. We had a broken operational model,” explained Rob. “Many of our customers were having to wait 10, 15, and 20 minutes to get their juices. So, a lot of people would just turn away and they only came to Daily Juice when they had plenty of time. And that automatically eliminated most of the professional population.”

“People also didn’t know what was going on while they were waiting. They didn’t see what was happening with their juices. Customers like seeing these colorful fruits and vegetables and they like seeing someone making their drink. It’s an interesting process to watch.”

With the opening of their store in downtown Austin in Fall 2012, Daily Juice debuted their new retail concept, bringing the brightly colored fresh produce and the preparation of the smoothies and juices to the forefront. Warm greens and bright earth tones both soothe the senses, while providing a visual lift.

“We integrated the classic assembly line and brought our kitchen up front, nothing’s hidden,” said Rob. “We’ve got these beautiful fruits and vegetables right on display for the folks.”

Rob’s team also worked closely with local designers on the look and feel of the new store, which is notably different from the quirkier layout of previous locations.

“The experience wasn’t just about the juice. Daily Juice has been making delicious juices and smoothies for ten years now, but it really had an environment that was only friendly to a niche group of consumers. Since we’ve reworked our design, we’ve been very happy. We’ve seen professionals and other folks that you wouldn’t have really seen walking into our original locations.”

Rob also reported that the new layout allowed them to build in improved merchandising opportunities, resulting in a 40 percent increase in the average purchase price.

“When you look at the unit economics, we’re doing much better than we were before we introduced the new layout,” said Rob.

Daily Juice recently opened a store with the new concept in Austin’s Westlake community, and Rob says that this location has several improvements over the Downtown Austin store.

“We’re about 90 percent happy with everything we have downtown,” said Rob. “For our Westlake location we changed about 10 percent of the store, based on things we’d learned about customer flow and equipment.”

Rob shared that a general rule of thumb in franchising quick service restaurants is that by the fourth or fifth store, one starts feeling pretty good about the design and operation. By the tenth store, it’s locked in.

“Based on the feedback we’ve received from other people in the industry, it seems we’re already more in line with the companies that have opened four or five stores,” said Rob. “We put about a year and a half into the thought and design of this concept. And we had the advantage of eight years of operational experience in a different environment.”

Beyond additional locations in Austin, Daily Juice is working on the next stores for the Houston and Dallas markets to open later this year. And Rob’s team is continuing conversations with prospective franchisees to take it into cities outside of Texas.

The Acton Difference

Rob said that his time and experience at Acton has played a critical role in his success. “Acton is the equivalent of adding a couple of processers into your CPU,” said Rob. “I’m really not any smarter, but I’m able to come to better conclusions much faster than I would have been able to without Acton. And that’s entirely due to the frameworks that get ingrained in your head day after day at Acton.”

“I’m also much more confident in my decision making, because I know the process I went through to get to my ultimate decision on any given thing. They make such an impact on the speed at which I’m able to think.”

“I’ve actually learned to temper my pace, so other people can be included in the decision-making process, and we arrive at the conclusion together,” said Rob. “Because without these frameworks, you just cannot make as educated a decision as quickly. Sometimes others may think I’m making a flippant decision, and shooting from the hip, when in reality I’ve just gone through a thought process that I’ve been honing for the six years since I graduated from Acton.”

“Acton is such a powerful experience. I can see why entrepreneurs struggle so much in general. I don’t know how I would have gotten these tools except maybe gradually by trial and error,” he said. “Acton is just an unbelievable steppingstone if you want to be an entrepreneur. I don’t know anywhere else you can get this tool kit. I’m light years ahead of where I would have been.”