Pinkberry: The story of great frozen yogurt and angry neighbors
Pinkberry opened in Los Angeles in 2005 as a tart frozen yogurt brand. It was started by a 32-year-old Korean woman as a small frozen yogurt shop between a natural Viagra store and a private home. After only 2 months of its opening, Pinkberry came to be known as “Crackberry”, eliciting some irrational behaviors on behalf of the customers. The small frozen yogurt shop was once a medical marijuana distribution center. Does this explain the very long lines of 20-30 minutes in front of the shop, the thousands of parking tickets that amounted to 175,000 USD in one month, and the empty cups thrown in the neighbors’ lawn causing significant outrage?
I personally would like to attribute this success to the business and operating model of Pinkberry. This concept started in California by offering the right product to the right market. In a very “conscious” community, be it health, trend or weight, Pinkberry managed to offer a product made of real milk and fresh fruit toppings. It was healthy without the overbearing sweetness that one would attribute to artificial flavoring, and had low calories (20 calories per ounce).
Because of the benefits and innovation that the product bring to the market, the frozen yogurt offered in 4 different sizes was priced at a premium of at least 5$.
The layout of the store also played an important role in the experience; the owner wanted to make the store special, so the design of the interior was targeting the ‘iPod generation’ with green, and pink colors, reflecting glass surfaces and Philippe Starck tables.
Offering the right product, at the right place with the right design is often not enough. Hwang, Pinkberry’s owner, made sure that Pinkberry also have a strong operating model. When it first started, Pinkberry was extremely streamlined. They only offered two flavors in the shop: Plain and green tea yogurt with a set of different toppings. This model was successful as it significantly decreased the need for inventory. Furthermore, very few machineries were needed. The recipe that was Hwang’s was also simple and standardized. Being a very quick perishable product, launching with only very few items on the menu (they didn’t even serve water when they first started) was the right move. This guaranteed minimal to no waste in the store.
The simple operating model also allowed for a very easy training for the employees, as there were few machineries to operate; after all, how hard could it be to pull down a handle of a yogurt machine? – This saved them a lot of money on personnel and training as high turnover in this business doesn’t jeopardize the quality of the experience much.
Pinkberry currently owns >100 stores and have expanded internationally as well. A store on average receives more than 1,500 customers a day for a daily revenue of ~ 250,000 USD. With this expansion, they also grew their menu, but not that extensively. Any customer in the perfectly laid out Pinkberry store can see that they offer 7-8 flavors (Plain, green tea, watermelon, pomegranate, peanut butter, mango and chocolate), as well as one seasonal flavor that vary by location and by occasion (Pumpkin flavor in fall season). They also kept a very limited number of toppings available for their customers. With the main focus being frozen yogurt, Pinkberry also added smoothies to their menu. This limited assortment allowed them to keep the true identity of the brand, keep the brand focused, avoid derailment and most importantly remained faithful to their customers by offering a great experience: an amazing product and a quick service (due to the very short cycle time I have to say). Unlike Starbucks, Pinkberry kept the variation from the final product minimal which allows for standardization of quality and consistency of experience.
As seen, the two models complement each other, the concept of the store, the product, pricing, promotion and the space needed and machineries, and labor were the right recipe for success. Being the first mover gave them a competitive edge and allowed them to stay ahead of the competition by allowing them to have a simple and pleasant experience offered to customers.
With this offering, Pinkberry managed to maintain a “groupie-like” following. Well, why not? This place is pure happiness, except for the complete disappointment of when they discontinued chocolate hazelnut…