LVB.com – Cold War!

Frozen yogurt shops squaring off with ice cream parlors

Is the Lehigh Valley entering into a cold war?

Frozen yogurt shops are charging to the front lines of the battle to woo customers seeking out comfort for sweet, cool relief from the hot summer months. And they’re going up against already entrenched ice cream shops.

Since May close to a dozen frozen yogurt shops have opened in and around the Lehigh Valley, adding to the handful that were already in place.

Among the new franchises are Yofresh and Menchie’s and locally owned yogurt shops like So Fun and Just a Dream.

According to a story on the timesunion.com website, “Nationally, the frozen yogurt market was estimated to be worth $723 million in 2011 by IBISWorld, a California-based market research publisher.

Growth is expected to slow as the market becomes saturated, although it’s expected to hit $813 million by 2016.”

The question looms: are there enough customers to make this area-wide surge profitable?

Ali Lipson, who owns a Yofresh franchise on Broadway in Allentown with partner Sue Israel, isn’t afraid of a little – or a lot – of competition..

“I’m passionate about frozen yogurt,” she said. “It’s exciting that it’s a trend, and I think there’s room for everybody to succeed.”

Kevin Ryan, who owns a Menchie’s on Cedar Crest Boulevard in Allentown agreed – the more the merrier.

“I think it’s good that they’re opening everywhere. It shows people like it,” he said.

But retail experts aren’t so sure that the Lehigh Valley can sustain so many frozen yogurt shops.

James Balliet, president of KW Commercial-The James Balliet Group in Allentown, said the Lehigh Valley is playing catch-up after being behind the frozen yogurt trend. KW Commercial has frozen yogurt franchises in several of the retail strip centers Balliet manages.

“We’re kind of catching up to the trend,” he said.

Dr. James R. Ogden, a Kutztown University Marketing Professor and principle of the Doctors Ogden Group in Allentown, noted, “This area was underserved with the number of frozen yogurt shops from the franchises’ viewpoint – so they all came.”

Some observers, however, think there may be too many now.

Balliet said some of the shops are sitting pretty. He pointed too one frozen yogurt shop off of Route 248. Not only is it close to a Target store, which brings in foot traffic, but it is also in an area where there isn’t a lot of retail space for a competitor to come in.

He said the real concern is for frozen yogurt shops that are located too close to other frozen yogurt shops, or too close to vacant retail spaces where competitors could move into in the future.

And it’s not just frozen yogurt shops competing with each other. There are also traditional ice cream shops and water ice stands to consider.

Don’t cry for ice cream vendors just yet.

A recent Nation’s Restaurant News report noted that ice cream sales have increased in the past year, growing 2 percent to nearly two billion servings ordered at foodservice outlets across the country.

Kim MacIyver, owner of Ice Cream World on Hamilton Boulevard in Allentown, said frozen yogurt shops may be a hot trend but they aren’t scooping into her customer base.

“I haven’t seen it affect our business, not yet anyway,” said MacIyver. With an established client base and a good location – across from Dorney Park and Wildwater Kingdom – MacIyver has seen frozen treat trends come and go.

She said frozen yogurt is definitely a trend, but one that people can indulge in at her shop as well.

“We don’t have it self-serve style, but we do carry frozen yogurt and a variety of toppings,” she said.

She said having frozen yogurt along with ice cream and options like ice cream sandwiches and cakes helps keep her shop competitive with all of the other frozen desert shop options in the area.

Ogden said marble slab ice cream shops, like Cold Stone Creamery, which were a hot trend a couple of years ago should be safe from the yogurt competition because they’re going after a different demographic. Cold Stone, he said, is more expensive and considered to be more of an indulgent treat compared to the low-to-no-fat frozen yogurt.

“I think Rita’s (frozen water ice) will probably get picked on more. They’re the biggest target for price and demographic, said Ogden.

But Balliet said he isn’t too worried for Rita’s. He said the franchise has an excellent reputation for picking out good locations.

“Rita’s has demographic analysts on staff to make sure (franchisees) aren’t fighting over each other’s market shares. They cautiously expand,” said Balliet.

To Balliet, having a frozen yogurt stand in one of his shopping centers is a good thing. He said they’re bright and fun and attract people into a shopping center. Plus, both Balliet and Ogden said they personally love frozen yogurt.

However, both men also said it’s highly unlikely that all of the players will survive this modern-day cold rush, but Ogden said those that have the best marketing, service and product will come out on top.

Original Article