As the fro-yo category grows increasingly competitive and repetitive, the leading frozen yogurt franchises are finding ways to differentiate themselves from the crowd. In 2010, TCBY launched Super Fro-Yo, the industry’s first super nutritional classification, which has received strong response from the industry and consumers. As it tries to distance itself further from the competition, TCBY recently announced the next evolution of soft-serve frozen yogurt, with the first to market Greek Fro-Yo, scheduled to appear in stores this April.
TCBY, which is part of Mrs. Fields Famous Brands, currently has 380-plus franchise locations in 47 states. Tim Casey, CEO of Mrs. Fields Famous Brands LLC, speaks to Franchise Chatter in this comprehensive and candid interview.
Franchise Chatter (FC): How do you explain the resurgent popularity of frozen yogurt among today’s consumers? Why do you think frozen yogurt lost its appeal during the late 1990’s and early 2000’s?
Tim Casey (TC): Today’s consumer feels much more empowered to take control of their purchasing. The resurgent popularity of the frozen yogurt industry was spurred by customers wanting the option to customize their frozen yogurt by choosing from a multitude of options, such as portion size and toppings. Customers can really express their individuality with their purchase.
The other key element is today’s customer is much more health conscious and has a heightened awareness of healthy product offerings, leading to more informed decisions. Just last year, TCBY launched its new frozen yogurt classification called “Super Fro-Yo,” which is the healthiest frozen yogurt product available in the market. Our customers appreciate that they don’t have to compromise on flavor in consuming our frozen yogurt that is low in fat and full of health benefits, such as increased probiotics.
FC: TCBY used to be synonymous with frozen yogurt, but is now one of many brands (national, regional, and local) vying for consumers’ attention. What were some of the missteps committed and lessons learned along the way?
TC: We are definitely experiencing increased demand for frozen yogurt, and we are learning with our customers along the way. For any brand, the need to always be knowledgeable and aware at the customer level is fundamental. With consumer needs changing so rapidly, TCBY has really honed its efforts to provide more information and options to customers. We believe that investing the time and effort to understand our customers’ lifestyle needs will continue to shape our brand as the most relevant and compelling frozen yogurt offering in the marketplace. Our focus on health and wellness and unwavering quality and taste is right in line with the feedback from our customers. We are empowering and informing them to make the right decisions for them.
FC: You put a lot of emphasis on product innovation. What makes your frozen yogurt stand out from your competitors’?
TC: TCBY leads the market in nutrition, taste and new product innovation. In 2010, we launched a new frozen yogurt category called “Super Fro-Yo,” which is very unique to the marketplace. Because Super Fro-Yo is the healthiest frozen yogurt product, TCBY has set very specific nutritional guidelines per serving that must be met in order for a product to be considered a Super Fro-Yo flavor. These include the following (per serving):
- Calories: Must not exceed 120
- Dietary fiber: Must have a minimum of three grams
- Protein: Must have a minimum of four grams
- Probiotics: Must have a minimum of seven types
- Daily Value Average (DVA): Must have a minimum of 20 percent of vitamin D and 10 percent of vitamin A
- Active cultures: Must have a minimum of 20 billion live active cultures after manufacturing
- Saturated fat: Must not exceed two grams
FC: Your new stores look great. Can you tell us about your rebranding and new store design implemented in 2010? What were your goals for the new look?
TC: The launch of our new brand and the implementation in the stores has been a very positive move for TCBY. Our new brand look and feel appeals to a younger, yet sophisticated audience and capitalizes on our success as the industry leader focusing on health, quality and taste.
FC: Please tell us about your different store platforms? Do you expect self-serve to be the dominant format going forward?
TC: Based on our high level of customer insight and research, we believe our self-serve platform is the future of the frozen yogurt industry. This model allows customers to express their individuality and also empowers them to make decisions that are right for them.
Our franchisees have a multitude of TCBY platforms to choose from. In addition to our full-service platform, which is still very profitable for select franchisees, we offer many size options for our self-serve platform. These include the following:
- Express (120-150 square feet): Our Express self-serve model was designed for current restaurant owners who want to incorporate TCBY into the assets they already have. We provide a free-standing unit that decreases the space you need for your customers.
- Kiosk (200-350 square feet): Our self-serve Kiosk is self-contained with all the freezer and storage space a franchisee would need.
- In-line (800-1200 square feet): Our In-line self-serve model is perfect for locations such as airports and malls because it requires limited staff and space.
- Self-Serve (1200-1600 square feet): Our comprehensive Self-Serve model is an efficient platform that allows franchisees to offer a wide range of yogurt flavors and toppings.
FC: What are you doing to drive store traffic during off-peak hours? What complementary products do you think make sense for TCBY shops?
TC: Customers have really responded to our new self-serve offering, so much so that we have seen an increase in store traffic during our off-peak hours. TCBY has become synonymous with health and wellness, and we have seen direct results of this. Not only are our products seen as a treat, but we’re seeing a growing trend in our products being consumed as a meal replacement due to the health benefits.
TCBY is working on a multitude of new innovations. For example, TCBY is currently capitalizing on the fastest-growing yogurt trend — Greek yogurt. TCBY is the first national yogurt chain to develop a frozen Greek yogurt that will maintain the heritage of flavor and health aspects of our Super Fro-Yo. We believe Greek yogurt will have a very strategic position for our business, especially based on its high protein content. Our flavor profile will absolutely be upheld in all new products offered.
FC: One of your advantages is the size of your system, with more than 380 stores nationwide. How do you allocate your substantial marketing dollars to further increase brand awareness and loyalty? What can you tell us about your Internet and social media strategy?
TC: In 2010, TCBY launched its new brand look and feel, which appeals to a younger, yet sophisticated audience. Our refreshed brand has strategically positioned TCBY because it capitalizes on TCBY’s success as the industry leader and focuses on the health, quality and taste benefits of our products. We focus our marketing dollars to support our brand as well as to promote our self-serve concept.
We have also built a strong social media presence based on the opportunity to engage our consumers in a conversation. This allows us to better understand their needs and what is important to them from a lifestyle and brand perspective. As a brand with more than 30 years of franchise experience, we have seen the evolution of utilizing social media for marketing purposes and we recognize the tremendous potential of meaningful dialogue with customers. We have allocated part of our marketing efforts to leverage multiple platforms to engage with customers at a higher level.
FC: Frozen yogurt is seasonal in nature, at least relative to other food concepts. What are you doing to drive traffic during the colder months of the year?
TC: We are finding that when it comes to frozen yogurt, even the colder months are very successful. We are seeing a growing trend in customers viewing frozen yogurt as a great-tasting treat. We are continuing to promote the health benefits of our yogurt and are seeing positive growth trends in all markets as frozen yogurt is becoming a year-round staple. Interestingly, some of our highest volume stores are in the Northeast part of the country. Many customers are consuming our products as a meal replacement.
FC: What are your thoughts on the level of competition among frozen yogurt franchises today? How do you think things will shake out in the next 2-3 years?
TC: There have definitely been a growing number of frozen yogurt shops entering the market. I think back to the coffee house industry years ago when we saw the same trend. Over time, we saw certain brands that understand the consumer and were able to deliver on their needs rise above the competition. Being able to remain in tune with customers and evolve with their lifestyle is absolutely key. There is a lot of room for competition in the frozen yogurt industry, and those brands that are able to meet customers’ health, taste and quality needs and continually innovate will see the most growth within the next few years.
FC: Can you name a few brands (inside or outside your category) that you admire, and why?
TC: I admire brands that keep things simple and put the consumer in charge. Apple is obviously a very smart brand. Apple knew before I did that I needed my music delivered digitally. They find ways to remain relevant. Other brands that are doing a phenomenal job by focusing on quality and a customer experience are Chipotle, In and Out and Trader Joe’s. For any brand, it is essential to remain knowledgeable and to put forth the energy to understand the rapidly changing needs of the consumer.