Avoiding the big froyo freeze
10/09/14 Branding & Marketing Strategy # , , , , , ,

Avoiding the big froyo freeze

Three tips for frozen-yogurt operators to survive market saturation.

Originally published on QSRMagazine.com. You can read the article here.

Frozen-yogurt shops are reaching critical mass as sales and momentum start to slow down. The next obvious step in this fad is for the segment to reach its breaking point when weaker brands begin to fall away leaving only the strong to survive. Change is inevitable, but that doesn’t mean change has to be negative. Fro-yo brands with less market penetration don’t have to fail, but in order to persevere they will need to change the game in some way.

The fro-yo frenzy started with the introduction of a build-it-yourself format. That new format, mixed with a pay-by-weight pricing structure, helped the craze skyrocket exponentially. The segment’s pioneers saw quick success that lead to others jumping on board to claim their piece of the American dream.

Changing the game isn’t easy, but there are a number of directions in which these brands can grow and gain more market ownership. It will take visionary leadership and the chutzpah to take the risk, but there are opportunities within reach that are ripe for the picking. These opportunities include extending the offering; creating cobranded experiences; crafting a fresher, better story; or a combination of any of the three.

1. Extend the core offering

As it stands today, most frozen-yogurt joints sell their core product and maybe rendition of the classic milkshake. There aren’t many brands that go beyond that offering. The small, café-like experiences are poised to take on a larger offering into new day parts. Red Mango and Pinkberry are seeing success in doing this with their smoothie offering.

By adding a unique beverage lineup, a fro-yo shop turns into an actual café that opens the doors to a full day of service.

Breakfast is a rapidly growing daypart that sees large returns, and Greek yogurt is a huge market that’s untapped by many concepts out there. Besides cafés that resell Chobani or Oikos products, Red Mango seems to be hip to the trend by serving frozen Greek yogurt and regular yogurt parfaits—but even that’s not enough to tackle the breakfast daypart. With the build-it-yourself bar already setup, it only makes sense to create a build-your-own parfait offering for breakfast. Sure, different machines may be necessary, but that’s what innovation in the face of adversity requires.

With a breakfast comes the demand for beverages. The natural choice of beverages is coffee or tea. Many quick-serve restaurants have seen large jumps in revenue after adding specialty coffees to their lineup. Thanks to the likes of Starbucks and Caribou Coffee, drinking into the evening has become a lifestyle. By adding a unique beverage lineup, a fro-yo shop turns into an actual café that opens the doors to a full day of service. And that means more revenue and a point of differentiation that’s easily sold to the market.

2. Create cobranded experiences

Some concepts aren’t meant to stand on their own. Yum! Brands is known for its cobranded locations that combine a Taco Bell and KFC, Pizza Hut and Wing Street, or other brands in the portfolio. The idea is to combine forces to conquer an area where one brand would potentially poach the other. In the case of frozen yogurt, the opportunity to cobrand with another concept facing a downfall is prime.

The cupcake craze is already on the way out, but that doesn’t mean the demand has completely died. Cupcake bakeries have a great format with the ability to offer catering as a line of business. An operator could offer cupcake and fro-yo sandwiches, cupcakes topped with fresh fro-yo flavors, and other concoctions that create a new experience for consumers. Being the first of its kind would spark a blaze of interest all built on two fads that still have merit. The new brand would pull market share from both formats, frozen yogurt and cupcakes, while technically being first-to-market.

3. Craft a fresher, better story

Most frozen yogurt shops all have the same look. If you close your eyes you can picture it easily: White plastic accouterments mixed with bright, vibrantly colored tiles. The logo is probably a mix of greens, oranges, and pinks. The story is one based on a healthier dessert with fruit toppings sitting next to sugary candy sweets.

A brand’s story that’s honest and legitimate draws in passionate fans. Think of TOMS shoes and Chipotle: Both brands have embraced a bigger picture beyond their offering and have been rewarded with extremely loyal, raving fans. In the frozen-yogurt world, no brand has really done more than peddle their dessert in a run-of-the-mill interior experience.

The good news is that stagnation of story and experience leaves the door wide open for a game changer. What if the product was more natural or organic? What if a brand told the story of a cow to creamery journey much like Chipotle does for the world of burritos? What if a frozen-yogurt brand tied itself to a philanthropic movement entirely? People respond to a higher purpose that aligns with the brands values and vision.

It’s an inevitability that the frozen-yogurt world will change. How current fro-yo brands approach this change will determine the viability of their business. By taking a strategic look at their offering, opportunities and brand story, smart brands can find a way to change the game and avoid failure.

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The fresh food movement could be deadly for restaurants
06/08/14 Branding & Marketing Strategy # , , , , , ,

The fresh food movement could be deadly for restaurants

Originally published on Adage.com

Brands That Don’t Adapt to New Consumer Demands Could Suffer

Steep discount promotions, décor upgrades and a few new menu options aren’t enough for restaurant chains confronting growing demand for unprocessed, higher-quality food. Consumers’ demand for fresher food and a unique brand experience continues to grow rapidly. New restaurant brands are popping up everywhere waving the fresh-food flag, but as this movement invigorates the masses it could also be destroying restaurant brands that fail to adapt to new demands.

TGI Fridays took a lot of heat a few weeks ago for its latest ploy: endless appetizers for $10. One headline predicted the promotion would “destroy” the restaurant. Although the outcome remains to be seen, the basis of the prediction is that TGI Fridays seems to have lowered the quality of its food and service over the years. The promotion is just another example of the chain’s lack of dedication to a better experience in line with market demand. Instead of pushing a better product, the brand continues to push a lower price.

Case in point: As a reaction to poor performance, Olive Garden started rejuvenating its brand earlier this year. It announced “the most significant evolution in the restaurant’s history,” and added new ingredients like polenta, capers and pistachio-crusted truffles as new items intended to increase the culinary quality of its food. The chain continued its push toward a renaissance more recently in the form of a new brand identity rolled out across brand touch points and new architectural and interior designs seen in two concept locations in Florida. But it continues to face problems even though it’s stepped up its brand identity and food offering, because it’s done little to address Olive Garden’s stigma for low-quality, processed food and the story around it.

What’s driving this fresh-food frenzy? For the consumer, eating healthier and fresher isn’t solely about trying to lose a few pounds. The long-tail effect of the farm-to-table trend has left consumers wanting to know the source of their food, how it’s made and the story of its journey. It isn’t as much about actual health as it is about the quality and “realness” of the food they’re eating. Coupled with the growing popularity of food-related TV programming, the American palette is expanding with the desire for broader, more sophisticated flavor profiles. Additionally, better understanding of the negative effects on the body from eating processed foods over the long-term has left consumers shunning anything less than fresh.

The fresh food movement is clearing the path for restaurants that focus on bringing better-quality ingredients, more responsible sourcing and new flavors to market. Brands like True Food Kitchen are usurping the once-loved casual restaurant brands with their focus on better, fresher-quality food that’s healthier than deep-fried bar standards doused in sauce. The restaurant goes beyond the food and includes the consumer in its story to garner participation in its brand. Although the food comes at a higher price point, people choose the brand with which they connect on multiple levels: fresh food and a story they can get behind.

Even in the far reaches of the U.S., the healthy food movement is dominating once-popular establishments that serve lower-quality food. Hawaii’s Grylt, a restaurant touting “good food that’s good for you,” is opening a fourth location, continuing its push against lesser-quality restaurant brands. The concept of offering fresh-grilled food and a story built on a better product fulfills the needs of tourists and Hawaiians alike who are into diets like paleo and fitness trends like cross-fit. As a result, Grylt continues to successfully strip market share from the island’s less-than-fresh counterparts who are content to slop together foods with a discount price tag.

The moves toward fresher, higher-quality and more culinary-focused offerings are not a fad. Rather, they are growing rapidly alongside other healthy-living choices, and are successfully threatening the traditional restaurant brands that haven’t kept up with the demands of the market. Fresh is no longer a point of differentiation — it’s now a consumer demand. As “fresh food” inches ever closer to parity, the only question that brands must answer will be: What’s the brand story?

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