Issue #102: Is Froyo Back?

Everything old is new again. When Jonathan Swift said this quote in the 1700s, I am not sure he was discussing retail trends and fads, but it is certainly apt here. This week, I am finally going to be discussing a trend that is back, Frozen Yogurt shops. These locations, where you fill your own cup with froyo, add toppings and sauces, then check out by weight, rose to popularity in the 1970s. TCBY, Everything Yogurt, I Can’t Believe It’s Yogurt, and others. Most of those faded away after a spike in popularity, and were replaced by a new wave led by Pinkberry and 16 Handles. To give a sense of the spikes, here is the Google Trends map:

Google Data only goes back to 2004, but you can see it spike up from 2010 to 2015, then fall back down, with the caveat of seasonality spiking in the summer. Recently, you have seen a big surge powered by social media, and people are looking for a better-for-you sweet treat. In NYC, countless shops have popped up. Birdee, Mimi’s, Myka, Madison Fare, to name a few. This trend has now grown beyond NYC to other major urban areas, like Chicago. Similar to how candy stores, cookies, and bagel shops are back in. The big difference, which plays into many other trends in food, is premiumization. Compared to your traditional froyo shop, these are much more expensive and of higher quality. With many people cutting back on spending, due to rising costs or due to health, that is not stopping them from splurging on specific treats. Premiumization still exists. Everyone wants a little sweet treat.

How long this lasts, who is to say, but there are definitely takeaways for any business here. Firstly, customers will always want to splurge, so even if you are a more premium product, keep in mind that people will want to trade up. Incorporating that strategy, whether through strategic deals, smaller sizes, or sampling, will help broaden the customer base. Then, with the right product, you can convert these customers into long-term customers by having them realize it is worth “sacrificing” in whatever way to make it happen. Secondly, if you have a complementary product, whether it’s the froyo trend or another trend, find a way to capitalize on it. Don’t break the bank on it, but there is always a way to get involved.

This week, Instacart announced some big moves as it continues to embed itself further in the retail ecosystem. First, on its Caper Cart, the smart shopping cart, you can now pay via SNAP in partnership with Forage, a company that focuses on enabling SNAP payments for retailers. This feature builds on other aspects of the cart, like being able to identify if an item is SNAP-eligible or not and clip coupons directly in the cart. The first store launching this feature will be McKeever’s, a regional grocery store in Kansas and Missouri. The carts, overall, without this feature, are available in 12 major retail banners.

Second, Instacart announced the acquisition of Arpalus, which uses computer vision to determine live product availability on the shelves via video. Between the cameras on the shoppers’ phones and the cameras on the Caper carts, this tool should greatly enhance real-time inventory. Why is that important? I think this quote from the press release says it all:

In 2012, university students Ben Francis and Lewis Morgan set out to change the workout clothing industry. They ended up dropping out of school and building a huge D2C business, before moving into retail. In 2020, private equity firm General Atlantic took a 21% stake, valuing the company at over $1B. Recently, with increased competition from upstarts like Alo and On, and incumbents like Nike and Lululemon, maybe starting to figure things out, that has not boded well for Gymshark. Last year, they trimmed headcount, but the year still ended with decreased profit. Now, Ben Francis, one of the original founders, is trying to buy back General Atlantic's shares. On the surface, he seems to have control, owning 70% of the company, but the way this must be structured, if he wants to make this move, is that General Atlantic has control. It will be interesting to see what plans Ben has once General Atlantic is out of the way, but this space is super competitive right now, and Gymshark is behind.

Take a run through New York City, and you will often see the word Bandit emblazoned on many people’s shirts. For those unaware, Bandit is the upstart running brand that has taken over the NYC scene, and may be a reason Gymshark is struggling, too. Bandit has been super smart about embedding community and retail at its core. On the community side, it is very involved with all the various running clubs throughout the city. With regard to retail, the flagship store in the West Village not only features the apparel, but also a coffee shop. After having two stores in NYC, Bandit now sets its eyes beyond the Big Apple. This week, it opened its first brick-and-mortar store in Chicago. It features a coffee shop in partnership with Soloway Coffee, an existing Chicago coffee store. Chicago is an interesting market because it is a big running hub, but it seemingly lacks a flagship running brand. Could Bandit pull it off?

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