The Fro-Yo Wars Explained
Categories don’t stay the same forever. Like a tree that branches out as it grows, categories grow and diverge over time. What was once one category ends up diverging into multiple categories. And many times the original leader fails to keep up.
Frozen yogurt is a popular summertime treat and personal favorite of mine; it is also a category that has recently experienced tremendous growth with new brands branching out in all directions. Here is my recap of the growing tree of Fro-Yo brands, some with strong visual hammers fueling their growth, others with weak hammers leaving doubt on their futures.
The Fro-Yo pioneer is TCBY founded in 1981 in Arkansas. Originally, the initials stood for “This Can’t be Yogurt. “ (A generic phrase that might summarize the taste experience but a weak phrase to use as a brand name.)
To make matters worse, a competitor “I Can’t Believe It Is Yogurt” filed a lawsuit in 1984 and forced TCBY to create a new name from its initials. They picked the basic and bland “The Country’s Best Yogurt,” leaving them with initials that stood for basically nothing. No matter, being first and becoming the biggest chain has its advantages. But between the weak name and the few competitors building brands, the category languished.
Unless challenged the leader tends to stay the leader. So for two decades, TCBY continued to dominate the segment. In 2006, TCBY controlled 36% of the Fro-Yo market. What they should have done is to continue to promote the yogurt category. Instead they spent the years chasing ice cream and ices.
Today its market share has been cut in half to 18%. TCBY has been clobbered by new brands that have pioneered new yogurt segments with powerful names and visual hammers.
TCBY is currently chasing all the new trends. But it is too little and too late. It is very difficult to reinvent a brand that has a weak name, a watered-down position and lacks a visual hammer.
They also recently launched a new logo with a modern look. But like JCPenney found out, you need more than a new logo to turn the business around.
Launched in 2005, Pinkberry was the first brand to shake up the Fro-Yo tree. Instead of sticky/sweet, Pinkberry focused on tangy/tart yogurt for adults.
The LA Times called Pinkberry yogurt “the taste that launched 1,000 parking tickets.” As the first brand in the new “tart” category Pinkberry got enormous PR, especially as customers and celebrities lined up for blocks in places like Beverly Hills to get a $5 cup of the stuff. They even call loyal customers “groupies.”
In terms of a visual hammer, with a name like Pinkberry you would think the stores and their logo would be primarily pink! Instead, both overwhelmingly scream green. But the name itself is unique and definitely lends itself to the creation of a visual hammer. As the first brand in a new category, they have a huge advantage. So any simple, unique visual they use could become iconic in the long run, like the Swoosh became for Nike.
Second onto the tangy/tart scene was Red Mango, launched in 2006. The name is Red Mango so the visual hammer screams red, perfect. Is that so hard, Pinkberry? Sometimes marketers need to go with the obvious. You see the red color, then read the name (Red Mango) which makes for a much more memorable brand image in the mind.
Red Mango didn’t benefit from the same celebrity following and PR that Pinkberry did, but a good name and a great visual hammer can help tremendously especially if you are second. Red Mango has gotten favorable PR by winning taste tests including a #1 rating by Zagat’s. The yogurt also has slightly fewer calories than Pinkberry which is a big bonus to calorie-counting fanatics.
It is still early in the game and Red Mango is catching up to PinkBerry. Both have around 200 units and about 15% of the market each. In the long run, I wouldn’t be surprised if Red Mango had the edge.
The price of success? Long lines. And while the long lines at Pinkberry helped the brand build mystic and media headlines, not everybody has 45 minutes to wait for a cup of yogurt. And not everybody enjoys being at the mercy of the server for how much yogurt goes in the cup or how much topping goes on it either.
The key to developing a new brand is not to copy the competition but to be the opposite. That is exactly what Yogurtland did in 2006.
First there were self-service salad-bars where you filled your container and paid by the ounce. Why not do that in yogurt? Brilliant.
Yogurtland pulled the machines from behind the counter and let consumers control the levers. Customers could put as much and as many flavors as they wanted in a cup. Then add toppings galore, little of this and lots of that. Measure your cup at checkout and pay by the ounce.
Less waiting, more choices, simple pricing. The concept was a huge success and pioneer Yogurtland dominates the self-serve segment. Today, they have over 180 locations and are in fourth place in the overall category behind TCBY, Pinkberry and Red Mango.
But because of its generic name and lack of a visual hammer the brand is in a weak position. The self-serve segment is seeing the biggest influx of competitors, many with better branding and eye-catching visual hammers. I predict Yogurtland’s 8% of the market will be hard to maintain or grow.
While Yogurtland took the generic naming route, Menchie’s, founded in 2007, uses a name unrelated to frozen yogurt. That’s not always a bad idea. Names like Starbuck’s and Amazon turned out to be super names.
But Menchie’s? Not a happy sounding name for a treat. It sounds kind of derogatory too. I assume they got the name from the Yiddish word “mench.” In Yiddish a mench is an extra-nice person. “That David is always so polite to his elders, what a mench!” Not exactly a compliment.
Menchie’s is growing and there is one just two miles from my home. It has focused on the suburban family and kid market. The focus on the family is good, and they have benefited from early expansion. The brand currently has over 200 locations. But long term having a name that is hard to remember, sounds bad and doesn’t lock together with a visual is a major weakness.
The Sweet Frog name is also unrelated to frozen yogurt, but as a brand name it is far superior compared to “Menchie’s.” Sweet Frog connects to the kiddie consumers, uses known words out of context and most importantly lends itself to a powerful visual hammer. It should be no surprise that since launching in 2009 Sweet Frog is leapfrogging its self-serve Fro-Yo competition.
When it comes to logos, never sacrifice legibility. Orange Leaf clearly violates this rule with its original logo which is a mess. The large “g” is jarring to the eye. The only thing they did right was focus on a color. That is good, the rest not.
Realizing the error of their design, they recently rebranded.
The new logo is bright orange and easy to read. But the visual is so abstract and lacking in meaning that it is useless. What is that thing? It is not a leaf and it is not an orange. It is just weird and disturbing.
The one thing going for Orange Leaf is that in a sea of generic yogurt names, its name and color stand out. Its growth has been impressive with currently over 126 stores. A lot of that is due to the fact that by focusing on a single color you can make the retail design striking. It has the upscale design feel of Pinkberry and Red Mango with the advantage of self-service.
When a category like frozen yogurt takes off, hundreds of brands enter the market. After the success of Red Bull, literally thousands of energy drink brands were launched. But since most of the brands were me-too imitations with weak names and no visual hammers, most failed.
Only the few that got the branding right by being the opposite of the leader, narrowing the focus and using a strong name/visual hammer combination survived. In energy drinks, Monster, Rockstar, and Amp made the grade and are still around. While brands like KMX and Full Throttle, launched by the world’s biggest beverage company Coca-Cola, fizzled and failed.
In frozen yogurt we see lots of small regional brands, most with generic “yogurt” names. As the category shakes out, I expect most will melt away as consumers and franchises move to of a handful of dominant national brands with better names and stronger visual hammers.
But what is that “O”? An eyeball? Weird, unmemorable and meaningless. When you are late to the game you need way more than that. You need a strong name/visual hammer combo.
The name Yogurt Mountain lends itself the creation of a visual hammer. But instead the brand uses a generic cup of yogurt like every other yogurt brand.
A missed opportunity to add a visual hammer to a rather bland name.
The color is very laid back, too laid back for retail. In retail, being seen at all is half the battle. While the name Yogurtini does lend itself to a visual, is a martini glass the right visual? Is vodka one of the toppings? Are they serving the yogurt in martini glasses as the visual suggests? I doubt it, which is why the visual hammer is weak.
Yogli Mogli has one of the hardest names to say or remember with a weird take on a generic yogurt name. There is also no connection or explanation for the name. A story and visual can go a long way in getting a name implanted in the mind. Here they have neither. The local founders might be great, but for a brand to grow beyond that it needs the support of a good name and a good visual.
The best way to become a better marketing person for your brand is to study other categories. The principles of focus, unique brand names and visual hammers are much easier to recognize in categories other than your own. Once you get good at understanding the principles, then the hard work of doing it with your brand begins.
Think about advice. It is always easier to tell other people what to do than to do it yourself in your own life. With your own brand/life, you can always think of a million reasons why you don’t need to focus your brand or you don’t need to eat less to weigh less.
Success depends on understanding the principles and then following them. Neither is easy.