Pinkberry / Los Angeles
In the Pink
Pinkberry yoghurt is one of those American franchise ideas – think soup, coffee and juice bars – that seem so obvious, you want to kick yourself for not having bought in at the beginning. The growth of the franchise has been explosive, from one Los Angeles store in January 2005 to 16 today, plus three in New York (five more by the end of summer) and, soon, six in London.
Pinkberry Korean-style yoghurt comes in two flavours – plain and green tea. It’s rather like Greek yoghurt with a hint of lemon. The fresh, tangy, strangely satisfying flavour grows on you. The snack, with only 25 calories a portion, is served with fresh fruit or crunchy toppings like Oreo cookies or Cap’n Crunch.
When Pinkberry opened in LA it was an overnight sensation. Queues formed around the block and customers drove for hours to get their fix. The city made $150,000 (€110,000) a month on parking tickets from customers. Bloggers obsessed over the secret of the recipe and the store was in profit within a month.
Then, last winter, three New York shops opened. Without any press, 800 customers came through each branch every day. As word of mouth spread, even die-hard New Yorkers queued on snowy days. By April, Pinkberry New York was serving 1,500 customers a day, compared to 3,000 a day in LA.
New Yorker Lisa Lozana treks downtown to Pinkberry several times a week from her Midtown office. “Now everyone in my office is addicted too,” she says as she manoeuvres 10 plain yoghurts with blueberries out the door and hails a cab.
Pinkberry co-owner (with Young Lee) Shelly Hwang explains: “The recipe is very specific. In Korea we drink yoghurt all the time. We wanted the same taste in the US but could only find it in that sour gelato from Italy. Part of the main product line comes from Italy, but we developed our product using natural ingredients and skimmed milk. To simplify the menu is key, and, second, good ingredients. Our fruit is so fresh because we pick it up at the airport before it reaches the wholesale market.”
So, with only two products, minimum staff training, a playfully modern store design and regular customers, Pinkberry franchises seem to be licences to print money. But, Hwang says, “It’s misleading how much work and strategy there is behind it. My life is Pinkberry. If I focus on my business, I don’t need to worry about other competitors.”
Still, there is a slew of copycats – Kiwiberri, Snowberry, Berrigood – and also questions about whether Pinkberry copied Red Mango, which opened in Korea in 2002. Red Mango had 180 stores in Korea last year and although it has recently closed 50 franchises in Korea, it’s planning to move to the US in response to Pinkberry’s popularity. Red Mango has hired investment bankers to run the company, and market researchers and focus groups to do taste tests against Pinkberry. It has hired designers to change its interiors from Asian kitsch to something more like Starbucks.
Does Pinkberry have what it takes to go global? Franchisee Daihwan Choi, who by the end of summer will own eight franchises in New York and eight in LA, says, “It’s not an easy operation. With so many customers, you have to pay a lot more attention to customer service. It’s a great problem to have, though!”
