The frozen yogurt market is crowded enough to create some headaches for Red Mango.
While adding almost three dozen stores in the past year, reaching 286 in all, the high-end purveyor of smoothies and froyo saw same-store sales slide. Red Mango is turning to made-to-order bottled juices in its search for a boost.
“Frozen yogurt is a competitive business. There are a lot of players out there, and despite its growth, supply has outpaced demand,” says Red Mango’s Dan Kim, founder of the seven-year-old company, which had sales of $64 million in 2012, the most recent figures available. One competitor, Orange Leaf, has already spread to more than 300 locations and is even looking at a potential IPO next year.
Red Mango has been testing juices in New York, priced at about $5 to $7 each, at two Long Island stores since the start of the year, and the made-to-order option has doubled its juice sales. “For a froyo business, we’re surprised at the results,” Kim says. All new Red Mango stores will serve juices, and most existing locations are electing to add the product. The chain is stocking stores with juicers and veggie ingredients including kale, ginger, carrots, cucumbers, and cayenne pepper for the new drinks, which have such names as Sweet Green Zing and Cool Pineapple Zen.
Premium juices, which include brands like Naked and Odwalla, have been a bright spot in an otherwise struggling market. Even smoothie chain Jamba Juice, which has battled its own sluggish same-store sales, has added a self-serve machine called JambaGo that mixes up prepackaged, preblended smoothie ingredients in a bid to attract cafeteria and convenience-store customers.