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Meltdown Ahead For Yogurt Shops?

RETAIL: Flood of players could overheat market for frozen treats.

Los Angeles Business Journal Staff

It’s clear to lovers of low-calorie desserts that frozen yogurt is back in a big way in Los Angeles.

What isn’t clear is whether it’s back in too big a way.

Since Pinkberry Inc. launched from Los Angeles more than two years ago, frozen yogurt stores with such names as Kiwiberri, Mr. Snowberry, YogurtLand, Roseberry and Berri Good all have opened Los Angeles County locations. At least five frozen yogurt stores opened here just in the last week. And that’s not the end. A big chain with Korean backing, Red Mango Inc., plans to launch its American initiative from here next month.

Various fights have broken out among them. And some in the industry already are predicting a frozen yogurt meltdown.

“There are so many Berries coming out,” said Shelly Hwang, co-founder of Pinkberry. “At first I was really disappointed, but now I see that they’re making us more famous.” Pinkberry has, however, sued Kiwiberri, alleging unfair business practices and imitating its concept.

Culver City-based Red Mango, which is owned by the original Korean Red Mango chain and several local investors, will open two stores in Los Angeles next month.

“I am concerned in L.A., where copycats seem to be surfacing every month,” said Red Mango President Daniel Kim. “It definitely saturates the market and creates too many places for customers to choose from.”

Rather than focusing too intently on Los Angeles, Kim said Red Mango will open 10 shops this year in a cluster of cities – including Chicago and Miami – that will be receptive to a health-conscious product.

Even though Red Mango has not opened shops in the United States yet, it already is in a scrap. The company has litigation pending against stores using the name in the United States. And a store called Blue Mango is poised to open soon on Sunset.

To the uneducated palate, there is little to differentiate the shops.

Pinkberry, Red Mango and most of the others sell or will sell non-fat frozen yogurt products in the same two flavors – plain and green tea. The menu typically includes shaved ice, smoothies and a variety of yogurt toppings including fresh fruit, sugary cereals and chocolate or yogurt chips. An aficionado might find the Pinkberry product sweeter, grainier and likely to leave a lemony aftertaste. Red Mango yogurt is subtly smoother, creamier and has a similar taste to the plain yogurt in your grocery aisle, albeit colder.

Can’t believe it’s yogurt?

The proliferation of frozen yogurt shops isn’t the only problem the resurgent industry is facing. They can’t always be called frozen yogurt, at least not officially.

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