Jamba Juice 2014 Annual Report Download - page 13

We enhanced our relevance to Millennials through popular lifestyle platforms. In partnership with DanceOn, one of the most widely-viewed YouTube
channel, we ran a consumer contest promoted by popular dance and music personalities. We leveraged influencers and cultural icons like YouTube fitness
entrepreneur Cassie Ho to encourage Millennials to include Jamba in their daily diets.
The Jamba brand continued to be included in the culture and conversations of consumers, as we were featured in stories appearing in nationally
syndicated journal and newspapers, including Nation’s Restaurant News, Franchise World, QSR Magazine, Forbes, and The Wall Street Journal. Jamba had a
strong presence in national health-oriented publications such as Men's Fitness, Shape, and cultural publications like STAR and OK TV!. We were highly
visible on numerous popular websites including mensfitness.com, OKTV!.com, and RadarOnline, the number one online resource for celebrity news. Tennis
superstar Venus Williams promoted Jamba on national television talk shows and on Extra!, the nightly entertainment show. Our participation in local
fundraising events also helped capture a significant amount of coverage from local television and radio stations. Jamba was recognized by the White House
for the fourth year in a row for our youth job creation program as a leading example of how private sector companies can work with local leaders to improve
communities. In California, Jamba won awards for service to the community and was recognized as a great place to work.
Our marketing efforts in 2014 significantly extended our reach and relevance to consumers. By improving our use of technology, expanding our reach
into various lifestyle activities, helping communities and leading the charge to improve the health and wellness of our nation’s youth, we have continued to
inspire and simplify healthy living and have made significant progress toward our goal of being a leading health and wellness brand.

We are committed to providing only the finest smoothies, juices, bowls, and other food products. Smoothie, juice, and bowl products depend heavily
upon supplies of fresh and individually quick-frozen (IQF) fruit and vegetables. During 2014 we established a nationwide fresh produce supply chain in order
to facilitate our new made-to-order freshly squeezed juice platform. The quality of each beverage depends to a large degree on the quality of the basic fruit
and vegetable ingredients from which it is made. It is essential that the supply of fruit and vegetables is of the highest quality and is consistent throughout
the year. To achieve these goals we purchase our projected requirements for the coming year from suppliers at the height of the season. The supply and price
of fresh and IQF fruit and vegetables are dependent upon the supply and demand at the time of purchase and are subject to volatility. Supply and price can be
affected by multiple factors in the producing regions, including weather, natural disasters and regional political and economic conditions.
We buy certain produce and dairy using fixed priced or to-be-fixed priced purchase commitments to secure adequate supply of quality ingredients for our
products. As a result, we have purchase obligations with certain suppliers for certain produce and dairy for various terms typically ranging from one year to
three years. We depend on our relationships with our suppliers for our supply of produce, dairy and other products. We believe, based on our established
relationships with our suppliers, the risk of non-delivery on our purchase commitments is remote.
Our supply chain and purchasing organization are completely funded by all stores across the Jamba System. This funding contributes to the cost of
system-wide procurement and management of our supplies and supports our suppliers. The program allows for a mark-up of certain products purchased by
Company Stores and Franchise Stores, which is subsequently rebated back to the Company by the supplier.

The retail beverage and food industry remains highly competitive and fragmented. Restaurants compete based on a number of factors, including quality,
price-value relationships, customer service, name recognition, employee hiring and retention and location. We compete with international, national, regional
and local retailers of beverage and food products, including quick service restaurants/fast food establishments, coffee shops, juice bars, donut shops, frozen
yogurt shops and grocery stores. Competition in the beverage and food market is fragmented, and increasing, and a major competitor with substantially
greater resources than us could enter the market at any time and compete directly against Jamba Juice stores.
12