High-End Frozen Yogurt Recession-Proof

If it’s pricey, probiotic, Asian-sounding and frozen yogurt, then consumers apparently are ready to pull out their wallets.

Pinkberry, the leading “better-for-you” brand, is now using bicycle messenger services in to deliver frozen yogurt at 6 New York City stores for purchases over $10. Rival chain Red Mango has launched Tangomonium, a tangerine-flavored variety. Although both companies had to close stores in the over-saturated Southern California market, sales and new stores are jumping despite the recession. The key seems to be exotic flavors like green tea and “good for you” versions like pomegranate, topped with none of the usual candy-in-disguise toppings. Instead both retailers push fresh strawberries and kiwi. Pinkberry has even tried to conjure up the seashore with floors made from pebbles.

“Health” yogurt isn’t even a “small” portion of the $8.1bn frozen yogurt market in the U.S., but it is the fastest-growing segment, with Pinkberry and Red Mango likely to have upwards of 1,000 stores by 2013. Analysts explain the appeal of the two chichi companies is from the illusion of health is a dessert product. A lower-priced, self-serve alternative is coming into the market via Yogurtland. It’s all good news to the frozen dessert market, where sales of ice cream are flat or declining. While we’ve gone down this road during the 1980s with TCBY and I Can't Believe It’s Yogurt, the new stores have found a way to lock in their mostly female clientele who is concerned about calories, fat and natural ingredients. Among the Pinkberry customers are First Daughters Malia and Sasha Obama.

If the marketing and cost ($4.50 for a 16-ounce cup of Pinkberry) sound like Starbucks, it should surprise no one that company’s founder, Howard Schultz, sits on the board and has invested his own money in the chain. Both companies are going heavily down the digital marketing route (Facebook & Twitter, plus digital coupons on the former), but are also using conventional techniques, too, including loyalty rewards: Club Mango already has 20,000 members, with members amassing 10 points for each dollar spent and receiving a $5 voucher for every 500 points accrued. Pinkberry has also announced its intension to license its brand to retail in the future.

But no upscale firm is safe if McDonald’s decides there’s enough money in probiotic blends, as Starbucks found out once the Golden Arches went into coffee.

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