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QSR Feature
Yogurt’s Big Move

Then came a lull. Frozen yogurt had become a icon of American culture, true, but as the country’s love affair with health foods swooned toward marriage and purveyors like Cold Stone Creamery began fighting back with whole new lines of healthier reduced-fat ice creams, customers started falling away. In 2005 65 million gallons of frozen yogurt were produced in the U.S.—a significant decline from 15 years before when 117.6 million gallons had been made.

That’s when Pinkberry came along. Founded by immigrants from South Korea, where tart-tasting frozen yogurt has been popular for years, the little company that could opened its first store in Los Angeles in 2005. The idea quickly spread, attracting such competitors as Red Mango, an older company that actually started in South Korea but didn’t make it to the U.S. until 2007.

Just within the past year retail yogurt sales have increased at least 33.4 percent. Frozen yogurt is also doing exceedingly well, with a 12 percent increase since 2006. And, according to a report by market researcher Packaged Facts, frozen yogurt sales are expected to jump from $1.7 billion to nearly $2.7 billion over the next five years.

Many attribute that, in part, to the public’s belated acceptance of the original tart flavor by which true yogurt has always been characterized.

“The market in the U.S. is finally accepting frozen yogurt that actually tastes like yogurt,” Aaron Serruya, co-founder of Yogen Fruz, which has more than 250 stores in 35 countries, recently told the Los Angeles Times. “Before it was always yogurt masked as ice cream,” says Jonathan Cutler, spokesman for Cefiore, which launched its first store in 2006 and now has 25 locations with plans for another 24–40 in the coming year.

Cefiore, owned by South Koreans but based on a formula from Italy, offers four basic flavors: original, acaiberry, chocolate, and green tea. All are tart.

“This probably wouldn’t have worked 20 years ago,” Cutler says. “People’s tastes are evolving. This is back to the basics of what real yogurt’s about. I call it the new millennium of interest in frozen yogurt, but really it’s retro.”

Tyler Bargas, sales director at YoCream International Inc., a leading manufacturer and marketer of frozen yogurt products, agrees. “Yogurt is back,” he says. “It’s always been entrenched in the economy, but it kind of flattened out and now there’s a big resurgence. It’s not a hippie food anymore.”

Leading the charge, Bargas says, are the tart-tasting products that have finally been embraced by a generation of consumers that have either never tasted them before or once rejected them but are now more open-minded.

“Tart yogurts are growing exponentially,” Bargas says.

His company recently reported a 23.3 percent sales increase for the quarter ending January 31, 2008, its seventh consecutive quarter of double-digit growth.

“The interest seems to be percolating,” Bargas says. “We expect tart to surpass our sales of strawberry. What’s changed is the consumers’ level of education. They know what yogurt is now. Even my kids reach for yogurt.”

While some establishments offer such enhancements as chocolate, vanilla, strawberry, or green tea, the underlying tartness of the yogurt is distinct and unmistakable, with most customers preferring the undisguised original or plain flavor.

“We try to make all our flavors still taste like yogurt,” says Matthew Wallace, co-owner of BerryLine, which opened in Cambridge, Massachusetts, in 2007. “We pick flavors that go well with the tartness of the yogurt; if we have pomegranate, we want it to taste like plain yogurt with a little bit of pomegranate in it. I’ve had several people come in and say it tastes just like the Greek yogurt their mom used to make.”

While most customers have an immediate positive reaction, he says others aren’t so sure at first. “Only a few have gone ‘Eeww’ and walked out,” Wallace says. “But then even they often come back saying, ‘You know, after thinking about it, it doesn’t actually taste so bad.’ The yogurt phenomenon,” Wallace says, “is definitely satisfying and surprising.”

Eden Burch, manager of a Dolci Mango in San Diego, has a straight forward explanation. “The taste,” she says of the tart yogurt her store sells, “is simple but addicting. They’re surprised when they taste it, but mostly it’s a good surprise.”

That certainly seems to be the case at Golden Spoon in Long Beach, California, where plain tart yogurt is in high demand.

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