Pinkberry began selling frozen yogurt in 2005 as a fragile startup and has grown into a solid and expanding business with more than 170 stores worldwide. The story of how Pinkberry opened for business during a rainy California winter and grew to dominate the frozen yogurt market is amazing. They’ve experienced so much success that they have taken over the nickname “Crackberry” that once described the Blackberry mobile phone. So how did they do it in just over 10 years?
The Birth and Growth of Frozen Yogurt
Americans have had a love affair with frozen yogurt for more than 40 years, but it wasn’t until the 80s when it became a huge hit with consumers interested in a healthier, low-fat option for ice cream. By the time the 90s rolled around, frozen yogurt had captured a 10% share of the frozen dessert market, thanks to the rapid growth of the TCBY frozen yogurt chain. In the years since the first Pinkberry opened its doors in Southern California, frozen yogurt has made a rapid comeback. According to Pinkberry founder Shelly Hwang and her partner Young Lee, they did not revive the frozen yogurt of the 80s and 90s. They instead reinvented the product. Their first store in West Hollywood quickly became famous for its $5 cups of yogurt. People drove miles to the store and were willing to wait in line for 30 minutes, because there were not enough parking spaces in the residential neighborhood where the store was located. Pinkberry became known as “the taste that launched 1,000 parking tickets.”
To keep up with staggering demand, Hwang and Lee opened a second store in 2006. Shortly after, they began to offer franchise opportunities. Entrepreneurs quickly jumped at the chance to ride the pink wave. Pinkberry is now a worldwide sensation and shows no signs of slowing down. According to Ron Graves, venture capitalist and Pinkberry’s CEO, they receive hundreds of requests for franchises each month.
The Appeal of the Pinkberry Brand
Much of Pinkberry’s success is due to the brand that they have cultivated by being authentic, staying consistent, remaining focused, and creating an emotional connection with their customers. They’ve carved out a valuable niche by selling $5 cups of frozen yogurt to customers who have their treat while sitting on $500 Victoria Ghost designer chairs.
Graves sums up the brand as: authentic, lovingly crafted, inspired, thoughtful, anticipatory, intuitive, clean, light, refreshing, premium, current but not trendy, and like a best friend.
Pinkberry has now earned its place in pop culture having been featured in US Weekly and People. Celebrities including Lindsay Lohan, Paris Hilton, and Mike Tyson have been photographed eating Pinkberry frozen yogurt. The product has also been written into the shows Saturday Night Live and Ugly Betty.
The Value of Venture Capitalists
Pinkberry may have never experienced such wild success if it was not for the $27.5 million cash investment from Maveron, a venture capital firm started by Starbucks founder Howard Shultz and Pinkberry’s current CEO Ron Graves. The cash, along with Grave’s experienced guidance, allowed Pinkberry to focus on building an infrastructure that would support their planned development and expansion.
The Importance of Partnerships
Pinkberry has created a corporate culture that considers franchisees to be partners. Graves understands the power and importance of partnerships. As a part of their expansion plan, Graves sought partnerships with local developers who had the necessary experience, local knowledge, and capital to develop their franchise territory. It was also crucial that new franchisees demonstrated shared values and a passion for Pinkberry.
The partner franchisees chosen by Pinkberry are not only committed to the brand, they are also knowledgeable about trends in the communities they serve as well as the local real estate market. It is also important to Pinkberry that their partners have the ability to invest in and operate multiple stores in one territory.
The Impact of Social Media
Graves knows that Pinkberry’s success was built on word of mouth. He says that Pinkberry is the most talked about brand in its market. They were fortunate to emerge on the scene just as social media began to dominate the Internet. It was their highly social, and social media savvy, customers who helped build brand awareness by becoming Facebook and Twitter groupies who love to talk about the brand and make product recommendations.
Pinkberry was a great idea that hit the market at the right time, but good ideas are never enough. Their worldwide success is based on their ability to focus their brand image, attract substantial investment, and follow the guidance of experienced business leaders. Not only are they positioned to continue to expand into new markets, they are benefiting from a powerful boost from social media.