RaceTrac is trying it. So are Casey’s, Love’s, The Pantry and Pilot Flying J, not to mention a good number of regional chains and independents.
Reflecting the trends toward snacking, customization and better-for-you foods, soft-serve frozen-yogurt is appearing in c-stores around the country as retailers hope to ride the wave started by the restaurant industry nearly 10 years ago. They’re rolling in shiny new machines, setting up vast toppings bars and training customers to understand the pay-by-the-ounce concept.
In the restaurant industry, the frozen-yogurt segment continues to grow as operators are attracted to its small footprint, low labor requirements and quick ROI. Despite market saturation in some cities, consumers continue to gravitate toward the segment to satiate their sweet tooth in a healthy, economical way.
For c-stores, the risks restaurateurs face—buying the real estate, making it a destination—are minimized: You already have the store, and the hundreds of other SKUs on your shelves make frozen yogurt more likely to be an impulse sale than a traffic driver, at least to start.
But today’s frozen-yogurt concepts have evolved since the 1980s craze, and c-stores will be challenged by the quality, flavor profiles and price point consumers have come to expect. A successful program will rely on a strong operational plan and aggressive marketing.
Steady Growth
Frozen yogurt’s resurgence began around 2005, when Red Mango and Pinkberry began infiltrating the marketplace. Not your mom’s TCBY, these new concepts surprised consumers with a tart flavor profile, funky toppings from Nutella to mochi, and a self-serve, pay-by-the-ounce format.
While the typical demographic of these concepts is the 16- to 34-year-old female, the segment actually sees a broad base of ages and genders, says Darren Tristano, executive vice president of Technomic Inc., Chicago. Its popularity and growth can also be attributed to timing: The by-weight format was perceived as an economical indulgence through the recession, and the health halo certainly helped, too.
For the operator or franchisee, Tristano likens the segment’s attraction to Subway: There are so many of them in large part because “you can open a store with small square footage, low labor and a small upfront investment,” he explains. “You don’t need a lot of revenue to get to profitability.”
While most c-stores will opt to slide a few frozen-yogurt machines into their foodservice or dispensed-beverage offer, Warrenton Oil Co., which runs 33 stores under the FastLane banner, opted to go all in and open its own stand-alone frozen-yogurt shop.
About a year ago, the Warrenton, Mo.-based chain opened Swirls n Sweets, a brand it developed internally. It went into an endcap of the company’s building that houses a FastLane c-store and—tip of the hat to Tristano—a Subway.
“We work to bring both brands together by taking samples of yogurt to the pumps to draw awareness to the yogurt shop,” says Laura Wacker, director of foodservice. The shop features a fun, energetic design with a pink, yellow and green color palette, crisp whites and a curving, tiled wall showcasing the built-in Taylor frozen-yogurt dispensers. There is plenty of seating and six machines, for a total of 18 flavor choices. Flavors vary from traditional strawberry with real fruit pieces to more unique offerings such as Ooey Gooey Cinnamon Bun.
Guests customize their treat at the 30-item toppings bar, which includes fresh-cut fruit, sauces, assorted candy toppings and nuts. “Children love the gummy bears and worms, while the adults go for the more indulgent toppings such as caramel turtles, peanut butter cups and malted-milk-ball toppings,” says Wacker.
The stand-alone Swirls n Sweets opened last September, and earlier this year FastLane brought a scaled-down version into one of its c-stores. Three hundred square feet were set aside near the front, which houses four machines, 12 flavors (including twist combinations) and a 30-topping bar.
Customers pay 45 cents per ounce and have the choice of a 16- or 20-ounce cup or a waffle cone. The company continues to monitor both concepts to see how to expand the concept to other locations.
Meanwhile, in Savannah, Ga., Enmark Stations Inc. is testing a self-serve frozen-yogurt program in 10 of its 62 stores. Two locations were new builds that had the frozen-yogurt program designed into the floor plan; at the other locations, slow-moving products or programs were phased out to make room for the new offer.
Enmark uses Italian-made Bras B-Cream machines, which take up about 12 inches of linear space each. Toppings use another 2 to 5 linear feet depending on the store, says Matt Clements, director of marketing.
Like FastLane, Enmark offers a wide variety of flavors, from the traditional to the trendy, such as birthday-cake-flavored frozen yogurt. Toppings include hot syrups, cold fruit, nuts, sprinkles, cereals and candy.
So far, the company sees the program as a success. Clements anticipates the chain will adjust to have more machines in higher-volume stores and take machines out of slower-moving locations.
Getting the Word Out
While c-stores can rely on a frozen-yogurt program as an impulse purchase, it can—and should—become a destination through thorough marketing and promotions.
A couple of Enmark’s stores have become a destination for self-serve frozen yogurt; for the rest, “it’s purely impulse,” says Clements.
“We haven’t done a lot of outside marketing,” he says. “That’s when we’ll know if these machines are going to be long term.”
Enmark’s frozen-yogurt customers span all demographics, says Clements, from women and children to blue-collar workers. The offering is found in various markets, from suburban to small town, though the busiest location happens to be very close to a high school.
High school kids are an important demographic for FastLane, too, and the chain takes advantage of that with its Sprinkle on the Spirit promotion. Students from two local schools are encouraged to show their spirit by using the sprinkle mix with their school’s colors. The school that uses the most sprinkles over a period of time wins a trophy displayed in the store. The store also offers a 20% discount on Thursdays for customers who wear the school colors into the store.
FastLane is building awareness through daily specials, including Fill-A-Cone for $2 on Tuesdays and free pints with a $10 purchase on Saturdays. (It sells pints to help offset waste.) FastLane and Swirls n Sweets work together by offering Fro-Yo and Fuel Friday. The fuel customer gets a 20% discount at Swirls n Sweets on Friday when they bring in their fuel receipt. Swirls n Sweets is also part of the chain’s loyalty program, in which customers get KickBack points for purchases that can be redeemed at either location.
On its busy Facebook page (where it’s clocked in nearly 1,000 fans), Swirls N Sweets is promoting a new birthday party package: For $45, a customer receives a large pizza, fountain drinks, frozen yogurt, candy bags and balloons for eight people, as well as service from a “party hostess.”
“Actively promoting frozen yogurt in c-stores plays a vital role in attracting new customers, resulting in repeat visits and increased check averages,” says Patricia Bennett, senior director of global marketing for Rockton, Ill.-based Taylor Co., which manufactures frozen-yogurt machines along with other foodservice equipment.
“As customer demand for healthier foodservice offerings and speed of service increases, store operators are creating new ways to differentiate themselves from other foodservice establishments,” says Bennett. “Increasingly, they’re turning to us as a way to meet that demand while also growing store traffic.”
The Right Stuff
Before creating engaging promotions and sending staffers to the pumps with samples, retailers must analyze their space and make the proper purchasing and operational decisions.
- Customers and competition. Take note of your competitive landscape and the store demographics. Will frozen yogurt be a differentiator, or is it so different for your market that consumers won’t be interested?
- Space allocation. Understand your desired layout, be it in a new store or an existing location. New builds allow you to plan space accordingly, while adding frozen yogurt to an existing location may be an opportunity to get rid of a low-performing offering. Pay close attention to where in the store you place the program. As close to the checkout as possible is ideal because it is more likely to be noticed by customers and it allows employees to keep a close eye on it. But even if you position it deep in the store near the fountain, proper signage—from the pump to the doors to the checkout—is critical.
- Equipment and product. A good equipment manufacturer should help you understand the capacity and number of units needed based on projected volumes. Choosing a piece of equipment will also depend on the type of product you use, be it ready-to-dispense frozen yogurt, or powders that require a little extra labor. “Knowledge is everything when it comes to these machines. Not that they’re temperamental, but things happen,” says Wacker of FastLane. She recalls one day in which something on a machine wasn’t properly closed, which locked up all the machines and ruined the day’s product. While the number of units you need and the capacity per machine will depend on your own store traffic, success will be determined by how it holds up to traffic volumes. You want each cup to be consistent in temperature and texture. “Choose a model that can consistently produce quality products, draw after draw—even during your busiest day-parts,” says Bennett.
- Labor. As with any fresh-food offering, TLC from employees is critical for both promotion and maintenance of the program. Team members need to be properly trained on cleaning the equipment as well as keeping the area clean and appetizing. “It’s about training and creating awareness,” says Wacker. The stand-alone Swirls n Sweets location naturally has dedicated staff, and the chain is ensuring that all c-store employees are cross-trained for the in-store location.
- Price point. Finding the right price point may be a sticky proposition for convenience retailers, says Tristano of Technomic. The frozen-yogurt consumer is used to paying upwards of $6 for a sweet treat—but with that higher price point comes an elevated experience. Value-pricing frozen yogurt may hurt the quality perception, but with a higher price point must actually come a high-quality experience, which includes cleanliness, product quality and unique, modern branding.
The biggest surprises for both Wacker and Clements have been related to customer perception and education. “Many of our customers have not been in yogurt shops and are not familiar with pay-by-the-weight,” says Clements. “So there has been a little bit of a learning curve with that.” They alleviated the problem by sending employees over to explain the process while the customer prepares his or her yogurt. “Our price is clearly posted, but there have been instances where customers thought the entire cup was 39 cents.”
At FastLane, “We opened with just one size cup (20 ounces) and we had to bring a smaller cup by customer request—even though it is self-serve and the customer determines the amount ... they want,” says Wacker. “I think it was just a visual perception, but we listened to our customers and took action.”
Another benefit c-stores have over traditional frozen-yogurt concepts is the potential to grow check averages. Once the offering evolves from impulse to destination, retailers can use it to leverage other foodservice items and more.
Oh No: ‘Bro-Yo’?
In the Venn diagram of frozen yogurt and breastaurants (yes, there is such a Venn diagram), Cups is at the center. An odd mix of Pinkberry and Hooters, the chain is aimed at male consumers, or “bro-yo,” as Darren Tristano of Technomic says. Employees wear hot-pink tank tops, and the logo features two bountiful cups of frozen yogurt.
“It’s more of a clublike experience with an edgy vibe. We have loud dance music with lighting and murals that give us a look and feel that is very different from the normal yogurt bar or ice-cream shop,” founder Rick Barbrick said in a press release.
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