It's hard to believe frozen yogurt was invented in the 1970s, isn't it? At first, it was touted as ice cream's healthy cousin. After all, it was yogurt, but frozen, with yogurt's "live cultures." Then, some nutritionists came along and squashed the whole "healthy" idea.
Sure, it's frozen yogurt, they said, but with lots of sugar and other stuff added. Lots. And then when you add syrup, candy and cookie toppings – well, then it's just a cold dessert. Albeit, a very delicious cold dessert. So, before you lease a location and start calling suppliers, think about frozen yogurt's history and how you'd make sure your store would have customers lined up out the door.
A Checkered Past
Frozen yogurt has endured market ups and downs through the years, since it was first invented by H.P. Hood in the 1970s. Of course, yogurt had been a food staple in the Middle East for thousands of years. But turning it into dessert was the innovation. Hood called the concoction Frogurt, but it was slow to catch on. Customers said it still tasted too much like yogurt, so they continued to eat ice cream for dessert.
In the 1980s, health conscious consumers expressed a new interest in frogurt, and the industry responded with a more flavorful product, many new varieties, and better and more uniform consistency.
In 1986, sales of frozen yogurt reached a high of $25 million. By the 1990s, sales were up to $330 million and frogurt sales made up 10 percent of the frozen dessert market.
Frozen Yogurt Heats Up Again
Sales of frozen yogurt would dip and rise again in the 2000s, partly due to the recession. Since 2010, however, sales have been on the upswing. Consumers continue to be interested in lower calorie, healthier foods. Consequently, they don't feel quite as guilty indulging in frozen yogurt. In fact, frozen yogurt production peaked in 1995 at 152 million gallons, dropped to less than half that amount by the mid-2000's, but has been climbing slowly but steadily ever since, and most recently has been approaching 100 million gallons a year.
It took something different from everything else on the market to make frozen yogurt "hot" again. Most market analysts credit the arrival of Pinkberry in 2005 with bringing back consumers' taste for frozen yogurt.
Pinkberry's unusual, tart taste and emphasis on fresh fruit and ingredients was different from other options available at the time. Even the company itself takes credit for turning the market around.
Intense Competition in the Frozen Yogurt Industry
Once Pinkberry reawakened peoples' taste buds for frozen yogurt, other companies began to pop up and claim their own followers.
If you decide to open a frozen yogurt store, you won't be plagued with the "What IS that stuff?" problem that early stores had to fight. You will have lots of competition, however.
There are numerous big names in the market, with stores throughout the country and even worldwide, as well as local, single stores that also have followers in their area. It seems that, in any language, frozen yogurt has found a following.
Here are some of the big names, when they were founded and their claim to fame.
- TCBY - 1981 - The first, or one of the first, to open
- Menchie's - 2007 - A warm, happy environment
- Sweet Frog - 2009 - A focus on helping the community
- Red Mango - 2007 - A healthy, nothing artificial, nutritious like a red mango
- Pinkberry - 2005 - tangy taste that brought frogurt back
Franchise or Free Agent
One of the most important decisions you'll need to make is whether to go with a franchise or to strike out on your own. Both choices have benefits and also downsides.
With a franchise, you have a known name that attracts followers the moment your sign goes up. You also have training by those who have opened many stores before yours, and they can show you the ropes. Many franchises provide advertising and promotional help for their franchised stores, too.
On the other hand, you can't "do your own thing" when you're a franchisee. And why would you? You go with a franchise to have them guide you. But, if you're a creative type full of new ideas, you might prefer to start your own. You'll need to source your own equipment and vendors, decide on a yogurt mix, get funding and to research it all yourself. But whatever profits you make are yours -- except for paying your bank loan if you obtain financing.
- Start asking questions at your favorite yogurt stores. Emphasize that your store won't be a competitor; you'll be opening in another area.
- Do some franchise research at Franchise Direct, Franchise Help and other companies that can help you make comparisons. Even if you decide not to go with a franchise, you'll learn a lot in the process.
- Be sure to find out what your upfront costs will be. Ask what the franchise fee costs, what it includes, and what else you'll need to invest in to get started. Talk with owners of sole stores about what their start-up costs were.
- Find out, too, what it takes in replenishment costs to keep the business going. Since it's an edible product, you'll always be buying food supplies. What does it cost to maintain and replace the equipment?
Market the Experience
As much as the product you sell, you're selling an experience. This isn't a product people must have. Why do people choose to eat frozen yogurt? What will entice them to choose your store?
There's definitely an "if you build it, they will come" aspect to frozen yogurt. If you go with a name, people who already love that brand will come to your store. If you have your own concept, people will try it out of curiosity. But after the initial excitement, why will they come back?
Consider Various Concepts
Think about why you like certain brands of stores. Do you like to get your bowl and build a custom concoction? Or do you prefer to have an "expert" behind the counter assemble a pretty version for you?
What do you want your store design to say to customers? Or, after researching, will you decide to go with a non-store concept like ones in the following example?
- Happy, family vibe
- Futuristic, sleek look conveying forward thinking
- Coffee shop trend, with wifi and seating that invites customers to linger
- Eco-conscious, with biodegradable cups and cornstarch spoons
- Food-truck for walk-up, on-the-street experience
- Kiosk experience, where machine makes your selection for you, in malls and other locations
- Frozen Yogurt Solutions: How to Start Your Own Frozen Yogurt Business
- Frozen Dessert Supplies: History of Frozen Yogurt
- The Street: How Pinkberry Won the Frozen Yogurt Revival
- Guidant Financial: Top 5 Frozen Yogurt Franchise Brands
- Franchise Direct: Frozen Yogurt Franchise Opportunities
- Reis and Irvy's: Introducing the World's First Frozen Yogurt Robot
- Franchise Help: Frozen Yogurt Industry Analysis 2018