The Lane Train

News and Pop Culture for the Blog Generation

Vivanno Economics

Posted by thelanetrain on July 21, 2008

Last week, I blogged about the Vivanno (above) and got a whole slew of responses from the readers.  More or less, many consumers like that Starbucks is trying to reach new markets, but would they really respond to another overpriced drink?  In Manhattan, a Vivanno runs for just under $4, and you get fruit, milk, juice, and protein.  While cheaper than the many different (i.e. more than 2) smoothies you can get at now-officially-a-competitor Jamba Juice, the question still remains: Is the new product worth it’s store value?  The Lane Train will attempt to break down the ingredient costs and determine whether or not it is worth it to buy a Vivanno or make your own at home.

After The Jump: Let the games begin (and bring your brains)!

The Starbucks Vivanno page gleefully describes the wholesome ingredients that make up its Vivanno:

“Orange Mango Banana: Made with a whole banana blended with all natural Naked® Juice made exclusively for Starbucks, our proprietary Protein & Fiber Powder, 2% milk and ice.”

“Banana Chocolate: Made with a whole banana blended with our proprietary Protein & Fiber Powder, 2% milk, mocha sauce and ice.”

Sounds delicious right?  And so healthy!  Too bad its really just a ton of sugar.  But I digress…

So breaking down the ingredients, the former is made with a banana, orange-mango juice, 2% milk, ice, and protein powder, while the latter is made with a banana, protein powder, 2% milk, chocolate sauce, and ice.  Let’s assume that ice is free and can be taken right out of your fridge.

The Vivanno only comes in one size, grande (16 ounces).  According to the website’s nutrition guide, the Orange-Mango-Banana Vivanno has 250 calories, 2 grams of fat, and 16 grams of protein (with 32 grams of sugar as well).  The Banana-Chocolate blend has 270 calories, 5 grams of fat, and 21 grams of protein (with 28 grams of sugar to boot).  So essentially, Starbucks has perfected a perfect ratio of ingredients to not only create these precisely calculated nutrition statistics, but tastes great as well.  In order to effectively estimate the costs, we have to break down the ingredients one by one to get the exact nutrition facts and measurements to perfectly predict the cheaper option.

Let’s start with the less caloric and more sugary Orange Mango.  Let’s assume that Starbucks uses a medium banana (105 calories, 1g protein, 0g fat), and a half scoop of standard whey protein powder (55 calories, 10.5g protein, 1g fat).  This leaves 90 calories, 4.5g of protein, and 1g of fat to be divided between the milk and juice.  Since a cup of 2% milk contains 5g of fat, we’ll assume Starbucks uses 1/5 cup of milk (26 calories, 1.6g protein, 1g fat) and 4/5 cup of juice (96 calories, 0.8g protein, 0g fat).  The exact numbers are slightly off from the Starbucks version, but its about right (they probably use a smaller banana).

To buy these ingredients separately, I looked at prices online from a local grocery store.  The bananas cost 28 cents each, milk costs $1.75 for a quart (5 cents an ounce), and the juice costs about $7.35 for a quart (pricey!).  The protein powder (using Generic GNC product) is about $22 for a 2 pound barrel, but contains 58 half scoops (about 38 cents per half scoop).  So combining all the ingredients together, we have banana at 28 cents, milk at 8 cents, juice at $1.47, and protein at 38 cents.  Without question, buying your ingredients in bulk and making your own Orange Mango Banana Vivanno at home for $2.21 per unit is a lot cheaper than paying $4 at a local retailer.

The Banana Chocolate is even cheaper because you can use chocolate protein powder (same price as above) to sub in for the chocolate sauce (a healthier switch), but you use more milk.  Assuming the other factors to remain constant (160 calories, 11.5g protein, and 1g of fat for the protein/banana), we use 4/5 cup of milk (104 calories, 4g fat, 6.4g protein).  Again, the numbers are slightly off, but its about the same as Starbucks.  With these ingredients, we have a banana at 28 cents, protein at 38 cents, and milk at 32 cents, making the Banana Chocolate Vivanno only 98 cents!  So much cheaper!

Not only is Starbucks’ Vivanno a big sugary smoothie disguised as a healthy product, but they make a huge profit margin for each smoothie blended as well.  So really, is it worth paying $4 for something you can make at home for less than a buck?  I didn’t think so either.

(Photograph via Business Week)

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4 Responses to “Vivanno Economics”

  1. TakeEcon101 said

    lets also assume my time is worthless, the resources i spend getting the ingredients (gas, cab fare, subway, etc) are free, i have the means by which to mix the ingredients (blender), and i want to make 500 smoothies with the bulk ingredients i buy. assuming all these premises, then youre right, it is more cost-effective to make my own smoothie. however, if im a busy working citizen, gas costs $4 a gallon and i dont want to make more then a few of these “big sugary smoothie(s)”, id probably be OK coughing up 4 bucks to try the smoothie a couple times.

  2. thelanetrain said

    In the short run, it make more sense to buy a smoothie for $4. I didn’t factor in the cost of gas and transportation because I assumed that the environment (NYC) is walkable, and I didn’t factor in the initial costs because I assumed that if one is a smoothie aficionado, they would already have a blender at home. What I am trying to point out is the high profit margin that Starbucks makes by selling each of these Vivannos, which I would hope you see as well.

    BTW I took Econ 101. Good class. Macro I found to be more of a challenge. I’m just surprised that Starbucks isn’t charging more for the Orange-Mango because orange prices have gone up in the past 24 months. At Jamba, products made with oranges have traditionally sold for about 25-45 cents higher.

  3. Aaron Joshua B. said

    “What I am trying to do is point out the high profit margin that Starbucks is making…”

    This comes after a post where you question why they are making these?

    If you are changing your original position, then I commend you for your integrity, rationality, and beauty.

  4. thelanetrain said

    I still think Starbucks has no right to enter a new food market, but if they can get consumers to like (and buy a lot of) high-profit “healthy” smoothies, more power to them.

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