Technavio’s latest Global Frozen Yogurt Market Report highlights three key emerging trends predicted to impact sales growth through 2020. The London, England-headquartered market research specialist defines an emerging trend as something that has potential for significant impact on the market and contributes to its growth or decline.
“Frozen yogurt franchises are on the rise in the US and are one of the most popular categories in the dessert industry. Health conscious consumers are the key driving factor for the frozen yogurt market in North America. Frozen yogurt is considered as a healthy substitute for ice cream, owing to fewer calories, lower fat content and enhanced nutrient content per serving. To attract customers, frozen yogurt chains such as Orange Leaf, Menchie’s, sweetFrog, and Yogurtland display calories-per-serving signage for every flavor offered,” said Vijay Sarathi, a Technavio analyst specializing in the food industry.
“This trend of people seeking healthy food products adds to the overall revenue of the market. It provides an opportunity for frozen yogurt players to focus more on healthy products and different areas such as on-the-go items and juices,” he added.
Impact of Organized Retailing
Consumers across the globe are showing a growing preference to shop at hyper marts and supermarkets. Major frozen yogurt vendors are therefore competing for shelf space in these large stores.
The boom in organized retail in emerging economies is also proving to be advantageous to the international frozen yogurt industry. Acting to better leverage market opportunity, vendors have started using the organized retail platform for stocking as well as promoting their offerings through direct interactions with consumers. Toward that end, they are employing dedicated sales personnel at stores to speak to consumers and convey product information such as nutritional content and the other beneficial features of frozen yogurt. They also collect feedback and suggestions from consumers.
Growing Franchise Clout
The number of frozen yogurt franchises has grown rapidly in the past six years, reaching approximately 2,600 in 2014 from 1,018 in 2008. Menchie’s, which started in 2007, expanded to more than 250 locations by 2014. Similarly, in 2014, sweetFrog, a premium frozen yogurt chain, reached a milestone of 345 stores just five years after opening for business. Orange Leaf, which had 15 stores in 2010, grew 65% in five years to reach a store count of 300 in 2014.
Frozen yogurt franchises are also gaining popularity as places to socialize in the United States, and this has positively influenced sales. Additionally, popular franchises such as Orange Leaf Frozen Yogurt, TCBY, Pinkberry, 16 Handles, The Fuzzy Peach, Yogurtini, and Yogurtland offer in-house varieties of frozen yogurt. This generates additional consumer interest in the operations.
Dairy-free Frozen Yogurt Popularity
The production of dairy-free frozen yogurt increased by almost 38% in 2014 from the previous year. Almond milk led the category, accounting for more than 50% of the US plant-milk industry. Coconut milk grew over 35% in terms of product introductions from 2012 to 2014. In addition, big chains such as TCBY and Pinkberry have launched variants of frozen yogurt that do not contain dairy products. It is anticipated that many vendors will launch similar non-dairy products to further leverage market potential.
