Froyo: passing fad or lasting success?

froyo

Krispy Kreme and Starbucks outlets may have dotted the streets of cities around Australia just a few years ago, but frozen yogurt has taken over.

It seems like a new ‘froyo’ store opens in Sydney’s CBD every week, but logic dictates that a crowded market will see many end up just like Krispy Kreme and Starbucks before them.

However, the men behind two frozen yogurt brands are convinced they’ve got the recipe for success.

Joe Rossi, the master franchisee of Orange Leaf, believes the brand will continue to grow thanks to its focus on building connections in the suburbs rather than looking to a CBD.

“The Orange Leaf approach is to bring good product to local communities and have those stores become part of the community and cement them in. It’s a lot easier to do so, to become part of the community in the outer suburbs than entering a market with high rent and high competition,” Rossi said.

The company has just opened its fourth store in Werribee, 25km west of Melbourne’s CBD.

“Werribee is at the heart of the Melbourne-Geelong growth corridor and is both an expanding commuter town and, with Werribee Park and Open Range Zoo, a tourist destination in its own right.  We’ve identified similar locations both in Victoria and up the east coast into New South Wales and Queensland,” Rossi said.

Orange Leaf is also innovating to ensure consumers will keep coming back, creating a to-go product and loyalty program.

Paul Siderovski, who brought Yogurtland to Australia, said the company’s future success depends on its product range. He hopes to have 50 stores open by the end of 2014.

“The biggest thing that differentiates us is that we’re not looking for that compulsory spend where people are just walking past and feel like yogurt. Our product quality is so high and there’s so much variety that we think we can be like the Kleenex of yogurt. People will say they feel like Yogurtland,” Siderovski said.

Both Yogurtland and Orange Leaf began in America. Rossi was asked by a friend to go to America to look at the Orange Leaf model and consider bringing it to Australia, while Siderovski was drawn to Yogurtland after trying the product for the first time while on holiday in Hawaii.

Rossi and Siderovski believe the big brand support and previous experience in America can ensure a strong performance in Australia.

“Because we’re a larger brand and we have strong support from our US colleagues, the experience has already been had and we don’t have to reinvent the wheel. There are a lot of smaller operators flooding the market right now, but unfortunately the smaller operations will have a tough time in the years to come because they will lack that brand support,” Rossi said.

Siderovski agreed, “We see that while there’s many stores opening there’s just as many closing. We see that happening because the mum and dad operators think they can just do this, but they don’t have the location or brand support.”

Ultimately, innovation is key to success in whatever business you’re running a one of a kind or ‘fad’ franchise.

“Unless you’re innovating, there’ll be someone else coming to knock you off your perch,” Siderovski said.

  • http://www.frozensolutions.com mitch

    How come none of the frozen yogurt stores there don;t have our MAGIC color Changing Frozen yogurt spoons?

  • http://www.strengthinbusiness.com/ Krisz

    The frozen yogurt market is growing at a fast rate in Europe too. It’s a high-growth and high-margin market segment. There’s only a few players involved so far – but things can change very fast. All that is needed is a good and sustainable recipe for success.