Evolution in the Desert Industry: How Frozen Yogurt is going Toe to Toe with Ice Cream Legends

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Evolution in the Desert Industry How Frozen Yogurt is going Toe to Toe with Ice Cream LegendsLactobacillus d. bulgaricus and streptococcus thermophilus sound like two bad memories from biology class. However, the two make yogurt, and in recent years have become celebrities, much to the chagrin of ice cream.

The American frozen yogurt market raked in $2 billion in annual sales in 2013, according to the U.S. Census Bureau and the NDP Group. That year, 121 million servings of frozen yogurt were churned, scooped and swallowed. Sales doubled between 2010 and 2013, whereas ice cream revenue remained (pardon the pun) frozen.

Orange Leaf: Frozen Yogurt to Go, Fresh or Packaged
The interior of an Orange Leaf looks like Willy Wonka’s Chocolate Factory melded with a Seussical wonderland. Ranked as one of the top three new franchises of 2013 by Entrepreneur, Orange Leaf stands apart by diversifying its menu, which boosts business during winter, and by making yogurt convenient. Customers can search for their favorite new flavor by visiting their local store’s web page, or they can check out packaged pints of fat-free goodness. Orange Leaf offers the Ounce Back loyalty program, where $1 spent equals 10 cents in future savings. The business charges a $15,000 franchise fee and a four percent royalty fee, some of the lowest numbers in in the industry.

Spoon Me: Going Green One Bite at a Time
A franchise originating in Salt Lake City, Utah, Spoon Me sells probiotic, fat-free, soft-serve yogurt by the ounce. Customers walk into the door seeking Acai Berry and Mango Tart flavors (and Cupcake, too), and walk out nibbling on biodegradable spoons, which are made from compressed corn starch and are, theoretically, edible. Low-VOC paint adorns the walls; bamboo planks make the floor. All tips go to local charities. Like many fro-yo franchises, Spoon Me sets up shop close to college campuses. It must charge a premium for its eco-friendly and community-minded processes, but with awards and customers flooding in, who is complaining?

Cold Stone Creamery: Jumpin’ on the Bandwagon
If you can’t beat ‘em, join ‘em! A member of Kahala Franchising L.L.C.’s 13 international brands, Cold Stone Creamery moved into the game in 2012. After testing several yogurt bars in American coastal cities, Cold Stone introduced frozen yogurt nationwide. It developed a proprietary yogurt recipe and now relies on its business clout – and singing servers – to push the product. Other traditional ice cream brands, such as Baskin Robbins and Blue Bell, have also thrown in the towel and sell frozen yogurt alongside premium ice cream.

Red Mango: Promoting Health and Hipness
No one would deny the success of Red Mango. In an industry where the number of frozen yogurt shops increased 24 percent between 2011 and 2012, Red Mango likely claimed the lion’s share. Like Pinkberry, Red Mango creates a sociable and hip atmosphere, similar to a coffee shop. It often hires young employees who promote the shop’s trendy, upscale ambiance. Seventy percent of its customers are women. Backed by its mammoth market share, Red Mango snagged an affiliation with Sodexo, an influential foodservice company, sweetening its corporate strategy.

Braum’s: Batting for the Big Leagues
“If you want something right, do it yourself,” says Braum’s. A believer in vertical integration, Braum’s owns its truck fleets, cattle ranches, milk processing plants and everything else. Frozen yogurt was a simple addition. Braum’s only operates within a 300-mile radius of its hometown – Tuttle, Oklahoma – to ensure quality. By affiliating frozen yogurt with a regional company, unlike TCBY or Orange Leaf, Braum’s capitalizes on local loyalty, a progressively difficult feat given the growth of frozen yogurt sellers.

Yumz Frozen Yogurt

A thriving starter frozen yogurt shop from the downtown Chicago. A believer in customer experience and interaction Yumz has created an interactive page on their website. The customers can go online and fill out their “coolest combos” section and submit their favorite personally made frozen yogurt combination. “Every month, Yumz Gourmet Frozen Yogurt will pick 1 Coolest Combo winner who will be showcased on our web site. These are picked based on creativity and taste. Monthly prize winners receive a free cup of Yumz. Each combo you submit is automatically entered into the monthly contest on the month it is submitted. No purchase necessary.” It gives you the opportunity to post it on their site and your social media sites. It provides them with greater social media exposure yet allows their customers to feel involved and share things they have created. Their customer pool has increased exponentially within the past year. They have become a force to reckon with.
Forever Yogurt: Targeting Mom & Pop
Former professional poker player Mandy Calara, CEO of Forever Yogurt, knows that winning a bet is more marketing than math. In an exclusive 2012 interview with Franchise Chatter, Calara credited product consistency and marketing magic with Forever Yogurt’s rip-roaring success in Chicago. As the brand spreads from the Windy City, Calara has refocused on integrating, not eliminating, his competition. “We’re interested in converting poorly performing frozen yogurt shops into profitable locations. Some independent shops would benefit significantly by partnering with a well-organized brand that may have stronger pricing, better branding, and bulk purchasing power.”

Beth Bloom, a Mintel research analyst, noted that “the frozen yogurt segment has benefitted from a perfect storm of factors, including the … growing acceptance of frozen yogurt as a snack, and a perception of a higher health profile.” $2 billion in annual sales agree. The frozen yogurt renaissance is on. Perhaps ice cream can ride its coattails.

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