Others aren’t so sure.
“It’s not ideal,” Naomi Fogel, owner of Awesome Yogurt, which opened two months ago in Kettering, said of the recent bump in competition. “When I prepared my business plan, this was not a part of my business plan.”
The Ohio 48 corridor in Dayton’s south suburbs is the most recent epicenter of the frozen-yogurt trend. In addition to the two independently owned T-Willy’s and Awesome Yogurt shops that opened only weeks (and less than four miles) apart late this summer, the national frozen-yogurt chain Orange Leaf announced plans two weeks ago to open a location in the Town & Country shopping center in Kettering — a location that is in between the two independent shops.
In south Centerville, a husband-and-wife team that operated I Can’t Believe It’s Yogurt franchise shops for more than two decades opened an independent shop, SoYo Yogurt, in April, the same month that West Chester Twp.-based Bad Frog Yogurt opened its third location on Brown Street near the University of Dayton.
Brad Shipe, the franchise owner of the Orange Leaf shop, said he and his partners have signed a contract to open two more stores within the next year. “We’d like to open more as we find the right locations in and around Dayton,” Shipe said. The Kettering area was chosen for the first shop’s location, Shipe said, because, “It’s currently under-served regarding frozen desserts.”
Why is frozen yogurt becoming so cool so fast?
Nikoleta Panteva — retail analyst for Los Angeles-based IBISWorld, Inc., an independent industry research company —said self-serve frozen yogurt shops are appealing to a wider range of consumers looking for a sweet treat that is healthier and lower in fat than ice cream and allows them to personalize their desserts with toppings while also controlling how much yogurt they buy.
“It caters to their diets, and it caters to their wallets,” Panteva said.
Panteva authored an industry report on frozen yogurt stores late last year that found that “the number of frozen-yogurt stores has grown significantly” over the last six years from an estimated 957 nationwide in 2006 to about 1,200 today — an all-time high that was reached despite a crippling recession. Revenue climbed at an average annual rate of 5.9 percent to $723 million between 2006 and 2011.
“IBISWorld projects that health concerns and consumption patterns will continue to drive industry growth through 2016, albeit at a slower rate than the past five years,” the report said. “As more frozen yogurt stores enter the space, price competition will intensify, limiting revenue per establishment.” The report projects that revenues will grow at an average annual rate of 2.4 percent to reach $813 million in 2016.
Panteva said she was not surprised to hear of the surge of Dayton-area shops. “There’s definitely room for growth, especially in suburban areas,” she said.
Tish Hill is skeptical of claims that frozen-yogurt stores can thrive within close proximity of one another. Hill — district manager for Bad Frog Frozen Yogurt, which operates the Brown Street store near UD as well as locations in West Chester Twp., and in Dublin in suburban Columbus — points to the experience of her company’s flagship West Chester Twp. store, which opened in December and had the market pretty much to itself for a couple of months. Then, in quick succession, three competitors opened within a five-mile radius. Sales plummeted by more than half.
“We’ve lost about 58 percent of our business,” Hill said.
In contrast, the Bad Frog Yogurt shop on Brown Street near UD, which opened in April, “is flourishing,” and Bad Frog’s owners plan on searching for another new Dayton-area location to open in 2013, possibly in the Kettering area, Hill said.
Frozen-yogurt store owners are already strategizing about how they can survive and thrive in the current atmosphere. They talk of becoming part of the community, collaborating with local schools, hosting fund-raisers for sports and non-profit organizations, and finding ways to distinguish themselves from their competitors.
“My belief is that in a competitive market, the key is to be able to innovate quickly and provide something that is different and unique,” said T-Willy’s founder Preiser. “The combination of being different and also able to quickly respond to feedback that I get from patrons gives me an advantage that others may not have. … I think that especially in this economy, people want the most experience they can get for their money.”
Susan Hammock Hollon, who owns SoYo Yogurt in south Centerville with her husband Kevin Hollon, has a perspective unique among her fellow south-suburban store owners: She has sold frozen yogurt for nearly 25 years, most as a franchise owner of I Can’t Believe It’s Yogurt stores in Springboro and Middletown. The Hollons’ new concept focuses on frozen yogurt, but unlike the vast majority of the competitors, SoYo also offer ice cream, shakes, smoothies, pies and cookies.
“I love that there are all of these competitors,” Hollon said. “People are going to become curious about frozen yogurt, and they’re going to come in and try it.” Her optimism is buoyed, she said, by a very loyal clientele, some of whom come in every day, and by the large bedroom communities that contain plenty of potential new customers.
“I think all of the frozen-yogurt stores should do fine,” she said, “even though there are a lot of them.”
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