Healthful brands bolster Beverage-Snack segmentHealthful brands bolster Beverage-Snack segment

Like a consumer downing a blended superfood beverage, the Second 100 Beverage-Snack segment got a jolt of energy from smoothie and yogurt concepts.

By offering items that appeal to consumers’ latest definition of healthful or better-for-you, as well as listening to customers, Tropical Smoothie Cafe, Smoothie King and Yogurtland led systemwide sales growth with double-digit increases. 

“As healthy progresses into 3.0, look for functional benefits to be a consumer focus, with foods that align with particular health and vitality concerns, such as sustained energy, cancer-fighting superfoods, fiber to maintain satiety and plant-based proteins,” said Jana Mann, senior director at Datassential, a Chicago-based research company. “Consumers are looking for foods that fit this newer definition of healthy, and offerings like smoothies and yogurt fit it perfectly.”

In the Latest Year, Tropical Smoothie Cafe increased sales by 25 percent, Smoothie King grew sales 20.9 percent, and Yogurtland boosted sales 16 percent — more than double its increase of 7.1 percent the Preceding Year. 

Meanwhile, the segment’s more indulgent chains — Cold Stone Creamery, Caribou Coffee and Peet’s Coffee — posted only single-digit sales growth.

Beverage-Snack chains reported Latest-Year growth in combined sales of 10.1 percent, to about $1.7 billion, making it the second fastest-growing segment in the Second 100.

Helping to drive the increase was 12.1-percent average growth in Latest-Year U.S. systemwide sales, on top of 10.4-percent average growth in the Preceding Year.

Chief executives at Tropical Smoothie Cafe and Smoothie King attributed their continued success to a combination of factors, including offering innovative items with a health purpose and the power of better consumer listening. 

“We’re listening to our franchises and we’re listening to our customers,” said Mike Rotondo, Tropical Smoothie Cafe CEO. “When we get both of them excited, that’s where the magic happens.” 

One way Tropical Smoothie Cafe is listening to customers better is through a new app, which features loyalty rewards, online ordering and mobile payment. The app, which is live nearly systemwide, is integrated into the chain’s POS, so franchisees can react to customer needs immediately. 

By using data to listen better, Rotondo says the chain is able to provide the products its customers want and to expedite the rollout of those items.

Additionally, the smoothie chain is also using the app to better listen to its franchisees. A recent Tropical Smoothie Cafe convention featured test kitchen presentations for potential products. Franchisees used the app to help determine which products would be introduced systemwide.

Similarly, for the last few years Smoothie King has been using an online and mobile survey tool to better listen to its customers.

“Customers buy a product, go to the app and give us feedback, then we look at it and now we know whether customers are happy,” said Wan Kim, Smoothie King CEO. “The most important thing is it’s really instant.”

Yogurtland, the 10-year-old self-serve pay-by-the-ounce frozen yogurt brand, is also focusing on consumers.  

Last year, Craig Takiguchi, who at the time was Yogurtland vice president of brand management, told Nation’s Restaurant News that the chain would focus its energy on growing within its existing four walls. In November, the chain announced the hiring of several new executives in an effort to “strengthen the brand’s foundation and reinforce its infrastructure for growth.” 

These efforts are evident in the chain’s improved unit performances — it grew ESPU nearly 3 percent in the Latest Year, following a 14.9-percent decline in the Preceding Year — and its slower unit expansion rate. The chain added 15 new units in the Latest Year, compared with 53 in the Preceding Year. 

Two of the segment’s biggest brands in terms of systemwide sales — Peet’s Coffee and Caribou Coffee — faced challenges in recent years, but have returned to growth mode.
 
After two years of rebranding and co-branding, Caribou Coffee in the Latest Year posted solid single-digit sales growth and opened 24 new units. The nearly 50-year-old Peet’s Coffee, after some site conversion challenges in the recent past, posted single-digit sales growth and added two units.