Frozen Yogurt Starts Getting Some Competition
Frozen yogurt is here to stay. Let's face it: those pastel colors and swirly logos are going to be part of our retail and franchise lives forever. There will be no 90s-style industry collapse like last time. People are just too into yogurt, and thus the lines at Pinkberry and its ilk are too long. But that doesn't mean the industry shouldn't worry.
To wit: Swirl, a brand of self-serve frozen yogurt located inside RaceTrac stations--RaceTrac is a 320-unit convenience store chain based in Atlanta. The brand includes several frozen yogurt machines and a bar for toppings.
In another case, the Pennsylvania-based ice cream chain Bruster's, run by a former TCBY executive, Jim Sahene, is planning to add soft-serve frozen yogurt to its new inline store model, the first of which is to be built in Panama City, Florida. Sahene expects that the yogurt could at least offset sales declines from consumers who opt for froyo over Bruster's ice cream.
"There's no question" that frozen yogurt has impacted his company's sales, Sahene said. This explosion of frozen yogurt stands are certainly taking business away from other ice cream concepts. People get dessert only so much, after all, and though frozen yogurt is standing on its own this time around, rather than act as a carbon copy of soft serve ice cream, it's still a treat.
Will these moves by a pair of mid-sized regional brands spell doom for the frozen yogurt sector? Obviously not. But the booming market, and the ease with which companies can move into it, mean additional competitors in a sector already loaded with literally dozens of brand names. More ominously: it could spell just the beginning, as even bigger gas stations and ice cream shops and restaurants look to get in on the action by installing their own self-serve froyo kiosks.
For his part, Sahene believes the bigger national brands will likely make it through any upcoming shakedown in the frozen yogurt market. The companies that should worry: the small concepts and mom-and-pop shops.