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Menchie's to Freshii: Fro-yo market is thriving

June 3, 2016

Frozen yogurt chains aren't melting, said Menchies' CEO Amit Kleinberger in response to Freshii Founder and CEO Matthew Corrin's recent offer to help fro-yo franchisees convert their shops into Freshii restaurants. In an open letter to the industry, Corrin said fro-yo revenues are declining and that Freshii would waive franchise fee for qualifying partners who wanted to trade fro-yo in for Freshii.

Kleinberger disagreed and sent his own letter to FastCasual.com

"Despite recent claims that frozen yogurt sector is on its way out, the segment continues its nearly decade-long run of continuous growth," Kleinberger said in his own letter to the industry. "Following a five-year period of explosive growth that saw the industry reach an estimated $1.8 billion in annual revenue by 2014, analysts for IBISWorld predict the frozen yogurt business will continue to grow by 3.4 percent annually. Analysts project the sector will hit the $2.1 billion mark by 2019. One of the key factors fueling the frozen yogurt industry’s success is that guests are yearning for more interactive, innovative experiences that frozen yogurt chains offer versus the simple, traditional environment one can find at a classic ice cream store."

The rest of Kleinberger's letter is below:

"Additionally, recent trends illustrate that consumers are increasingly becoming more health conscious but not losing their sweet tooth. Frozen yogurt continues to thrive as a better-for-you indulgence for consumers seeking bold flavors and new combinations with healthier attributes such as probiotics, vitamins, antioxidants, fewer calories, and other benefits. According to a 2015 report from Guidant Financial, self-serve frozen yogurt remains a driving force in the industry’s growth and makes up 69 percent of all frozen yogurt shops. Self-serve frozen yogurt shops are especially popular among millennials, who value customization that allows them full control over flavors and toppings to suit their dietary interests. With millennials’ steady increase in spending power, this level of customization has evolved from being present in a limited number of food spaces such as frozen yogurt to a diverse portfolio of restaurant concepts.

"I certainly cannot make statements on behalf of the whole frozen yogurt industry; however, as a key global player, we do not see anything slowing down. As a brand, we continue to bring smiles to guests at our 540 locations, not only here in the U.S., but in the 11 countries we operate in around the world. We expect to grow to 600 franchise locations by the end of 2016.

"In the years to come, we look forward to continuing to grow and further establishing our position as America’s choice for frozen desserts.