Swizzles: Can ‘froyo’ be too much of a good thing?

For the past few years, frozen yogurt shops have been rapidly expanding as niche, local businesses. With a frozen product healthier than ice cream, and touting a self-service, by-weight pricing scheme, frozen yogurt shops have popped up in every major U.S. market.

For the past few years, frozen yogurt shops have been rapidly expanding as niche, local businesses. With a frozen product healthier than ice cream, and touting a self-service, by-weight pricing scheme, frozen yogurt shops have popped up in every major U.S. market.

Wilton Swizzles owner Adam Ressner, however, worries this explosion is causing an oversaturation of the market in many small towns. Swizzles is a frozen yogurt shop at 5 River Road.

“People love the product. It’s hugely popular right now, so everyone wants to be in the business,” Mr. Ressner said in a recent interview. “I see it as a problem, because there will be a saturation of the market. What’s going to end up happening is that yogurt shops will cannibalize each other.”

According to The NPD Group’s Recount Service, an industry association, there was an increase from 3,031 frozen yogurt shops nationwide in 2006, to 4,765 in 2011. This jump represented a 57% increase over a five-year period.

Many froyo chains, he said, do not properly educate their franchise owners on how to run a successful business. As a result, franchisees are not well equipped to make good decisions relative to the business.

Citing one Massachussetts company as an example, Mr. Ressner said, “The franchisees are constantly telling me that the company is saturating itself. They are going to kill themselves from the inside with the lack of business sense they are incorporating.”

When too many shops open in one area, Mr. Ressner said, they are forced to compete with each other for every shred of business. Unfortunately, the amount of business is often too small support multiple stores.

“There are people with money opening [independent] shops who don’t truly understand the business,” he said. “They’re opening in small towns to compete with other shops.”

Larger franchises moving into town, he said, can be even worse for local business.

“The larger franchises are opening up on top of other companies,” he said. “They just don’t understand the economics of the business. They’re investing hundreds of thousands of dollars into a business that’s not going to make any money.”

Rather than remaining a steadfast example of a classic “froyo” shop, Mr. Ressner believes his stores will survive by diversifying. An owner of 10 stores in three New England states and New York, he plans to hedge his shops’ frozen yogurt offerings by promoting additional options for customers.

“Every business had to evolve,” he said. “Starbucks started with coffee but now they have 20 different offerings. This is the evolution of Swizzles. Froyo will continue to be the staple of the store. It’s where we started, it’s who we are, but it’s not going to be all that we are.”

Adrienne Richards, director of industry and public affairs for the National Yogurt Association, said she is aware of a few yogurt stores that are making the transition from froyo-only stores to more diverse shops.

However, she said the National Yogurt Association does not believe the increase in shops nationwide represents oversaturation of the market. Instead, the association thinks the growing number of shops is a simple result of consumers’ demand for more nutritious food offerings.

“This increase speaks to an increasing awareness of the nutritional and health attributes of the foods they eat,” she said in a recent phone interview. “You can walk into a froyo store, and there is something for everyone, whether it be low-fat, no-fat, or no-sugar-added yogurt.”

Innovation, she continued, along with storefront evolution, will continue to support a growing industry.

“The frozen yogurt retail arena is definitely poised for growth in the coming years. That is due to in part to the innovation in the arena of yogurt. There are new flavors, textures, ideas, and concepts available in this space,” she said.

More than yogurt

Three months ago in his Ridgefield store, Mr. Ressner began offering soups and salads to go along with froyo treats. So far, he said, the results have been encouraging.

“We’re building business there with our salad and soups. Week-over-week business is really picking up. It’s a shop that can offer you more than just a treat,” he said. “We now have healthy meals for lunch and dinner. Our salads are absolutely delicious, out of this world.”

Though he is currently not able to offer food items like soups and salads at his Wilton store due to lease agreements, he plans on diversifying the shop in a more traditional way.

“I’m in the process of adding a 10-foot candy wall” to the Wilton store, he said. “I see us evolving into more of a café-style establishment. Froyo will continue to be the main component, but we want to continue to offer more to our customers by also adding smoothies and milkshakes to the Wilton store.”

The Wilton Swizzles was one of the first two shops Mr. Ressner opened, because the town fit perfectly into his vision of an area well-suited to support a frozen yogurt shop.

“I looked for towns with a nice-sized population with lots of great families,” he said, “and Wilton seemed to be a community with lots of great families. It’s also next to a movie theater, and a nice little downtown area. It was mostly about the community feel of the town. Wilton’s a great town in that sense.”

Ralph Serpico, general manager of the Wilton Swizzles, said he looks forward to becoming a larger presence within the community. In addition to offering sweet treats after a night at the movies, he hopes to offer many different fund-raising nights at Swizzles.

“We really want to get school fund-raisers together this upcoming winter for school classes, clubs, sports teams, and more,” he said.

In addition, he said, Swizzles is a sponsor of the American Cancer Society and Relay for Life.

Wilton Swizzles also offers catering, Mr. Serpico said, starting at $5 per person.

“We’ll bring everything to you,” he said. “All of the options are listed on our website, but it’s $5 per person for three flavors and four toppings catered.”

Information: swizzlesyogurt.com.