LONDON, United Kingdom — The closure of Organic Avenue in New York sparked a fiery conversation about the commercial lifespan of the cold pressed juice bar business, and now two of London’s own, Roots & Bulbs in Marylebone and The Juice Well in Soho, have closed their doors too.
Roots & Bulbs opened in London’s West End in February, 2014. Founder, Sarah Cadji, was the first to introduce the standalone cold pressed juice bar concept, which has proven so successful in New York and LA, to Londoners. Fueled by a passion for purity, Cadji expanded the following January to include a concession in boutique fitness studio 1Rebel. But after less than a year, that partnership was axed, and last month – the Marylebone storefront followed suit.
The business now operates solely out of its South Kensington location, offering a selection of coffees, smoothies and healthy snacks. But cold pressed juice is no longer on the menu and when questioned by Welltodo, the Cafe Manager was adamant it wouldn’t be returning.
The Juice Well, founded by seasoned restaurateur Will Ricker, of La Bodega Negra and E&O fame in May, 2014, also closed its Soho doors last month. With a weak food offering and poor brand awareness, it had failed to retain a loyal customer base.
As pioneers of the juice revolution, the closures come after a period of intense growth for London’s cold pressed juice market, in which a number of premium retail brands, including CPRESS, Raw Press, Lab Organic and PRESS, have all expanded to multiple locations. Across the board, prices for a 400ml bottle of juice vary from £6 to £8, but profit margins are low.
Despite the proliferation of juice bars in the British capital, the industry has been plagued with rumours of poor sales and planned closures, as operators struggle to cover the high cost of production and central London rents, and convince the wider population of any added health benefits worthy of such a high price tag.
Whilst representatives from Roots & Bulbs were reluctant to comment, Jack Graham co-founder of Raw Press explained:
“High quality organic cold-pressed juices are very expensive to make, especially if you are using premium ingredients and a high percentage of dark leafy greens like we do. At low volumes of production, which is the current state of affairs for most of the brands in London, the labour costs are also high, as the manufacturing process is a slow, artisanal one. With additional high labour, manufacturing, logistics and packaging costs per unit, you can understand the struggle the industry is up against.”
Graham, who runs two cafes in Mayfair and Chelsea is set for further expansion, he says the key to his success rests on maintaining a broad and exciting offering encompassing healthy breakfast, lunch and snacks, as well as tea and coffee. He supports this with a dynamic event schedule and a mix of other wellbeing products, like books and pantry staples.
“In a way, the juice is a loss leader but helps us to win and retain our customer base,” he revealed, suggesting that any successful retail operation requires smart product diversification.
Increased competition from supermarkets has also added a layer of pressure. While juice was once considered a niche product, grocery aisles are now stocked full of different brands like Plenish, B.Fresh and Savse, which come in at a more affordable price given their economies of scale and the use of HPP preservation methods (which extends the shelf life from 4 days to more than 1 month).
“To have a chance at making retail work in London you need a Pret model; multiple outposts in locations with high footfall,” says Rebekah Hall, co-founder of Botanic Lab, producers of organic cold-pressed juices and tonics sold direct to the consumer as well as via a number of high-end retailers and restaurants.
“Like most new trends there is an element of jumping on a bandwagon and trying to cash in, but that phase is now starting to play out with companies running out of money and struggling in the face of increased competition,” she says.
“Consumers are also becoming more educated and if they are going to spend disposable income on these kinds of products they want the best their pound can buy. From this perspective, a quality product will always win, particularly if it is strongly differentiated,” she adds.
Hall is convinced that competition in the space will continue to thin, and argues that the market will start to see a bigger split between premium and entry level products as consumers become more educated about the category.
Some will shop for convenience and some for quality, forcing brands to move into different markets in order to broaden their customer base.
Other shifts have already begun, with the remaining players adopting services like Quiqup and Deliveroo to help broaden their reach. It’s just one of many compromises, in addition to diversification, that juice bars are having to make in order to boost margins.
“I think it is inevitable that we will start to see M&A activity in the market and more Private Equity money being invested in the space,” says Hall, suggesting that in order to truly educate and expand into the mainstream, cold pressed juice brands will need significant cash.
Investors have had three years to monitor the market and its players, so many will be looking to make their move. However, just as there will be investors that are planning on entering the market, for those already in the space, they may well be searching for an exit strategy.