Campbell Soup to Invest $20M Into Ferndale Operation

July 2, 2015

Sherri Welch; swelch@crain.com
(c) 2015 Crain Communications, Inc. All rights reserved.
http://www.crainsdetroit.com/assets/PDF/CD100051614.PDF

Campbell Soup Co. plans to invest $20 million in the Garden Fresh Gourmet Ferndale facilities as part of its commitment to keep the company’s operations in Michigan, said Garden Fresh Founder and CEO Jack Aronson.

Camden, N.J.-based Campbell (NYSE: CPB) plans to add production space through expansions of the current Garden Fresh manufacturing facilities in Ferndale, which include a 25,000-square-foot salsa plant and a 28,000-square-foot site that produces hummus under the Garden Fresh and other brands.

Also on tap for the plants: new product lines and other modernization of the facilities, Aronson said.

Campbell confirmed it plans to invest in the business but declined to discuss specifics, saying it is still developing plans.

Though companies including T. Marzetti Co., PepsiCo Inc. and Nestle USAhad approached Garden Fresh about acquiring the company previously, none of them felt right, Aronson said. “We weren’t for sale.”

But the Bolthouse plant in Bakersfield, Calif., was “the first culture we ever found that mirrored ours.”

“You know if you go through a plant if people are happy (by) the way they talk to management,” he said. “If we were going to sell, it was going to be to these guys.”

What sealed the deal, Aronson said, was the fact that Campbell said it was going to keep the company’s operations in Michigan, retain the current workforce of over 450 people and make investments.

“It was a great opportunity for our team, the city of Ferndale and our state,” he said.

It also helped lay to rest the couple’s biggest fear: that they would have to lay off employees. Given the debt the company had taken on to accommodate its growth, “if there would have been a catastrophe of any kind, we would have had to lay people off because we didn’t have a pot of cash,” Aronson said.

Aronson will remain an adviser to Bolthouse/Garden Fresh, helping to work on new recipes for existing product lines which include salsa, chips, hummus and dips and developing them for new products.

As for the recipes he developed to this point: Campbell’s President and CEO Denise Morrison, “said they’d never change a (Garden Fresh) recipe without our approval,” Aronson said.

Big business

Though Garden Fresh has the leading U.S. market share among fresh salsas, it’s only sold in about 25 percent of the grocery and big box (like Costco) stores across the country, Aronson said.

Overall, the industry of making salsa is considered a mature market worth more than $900 million in the U.S., according to a February report by Australian research firm IBISWorld Inc.

But revenue growth potential has driven the large players to expansion, including manufacturing efficiencies, increased domestic production and acquisitions. Discretional spending is also increasing abroad, improving export conditions for U.S. salsa makers.

As for the Garden Fresh brand under new ownership, it will have access to a much larger distribution network as a part of the Campbell Fresh division, Bolthouse Farms and a team of 26 or more national sales people selling it vs. three, Aronson said.

“With the clout that Campbell’s and its international partners bring, Garden Fresh will get the attention of markets and new consumers never imagined in the past, said Ken Nisch, chairman of the Southfield-based retail consulting firm JGA Inc., in an email.

With Michigan’s agricultural capacity, hopefully, there will be opportunities to not only keep but also expand food manufacturing and processing in Michigan as Campbell’s increases distribution and develops other products under the Garden Fresh brand, he said.

The Garden Fresh brand is about fresh and from the garden, said Darren Tristano, executive vice president of Chicago-based food research and consulting firm Technomic Inc. “It has a health halo around it (and) is a really strong place to start if you’re Campbell,” trying to break further into the fresh market.

“If they want to leverage this brand…they really need to build the story behind it, communicate to the customer what it is, what it’s representing,” he said.


Fogo Sizzles in IPO

July 1, 2015

NB_13HALLCOSER_5_19746449Karen Robinson-Jacobs
Copyright 2015 The Dallas Morning News. All Rights Reserved.
http://www.dallasnews.com/business/restaurants-hotels/20150619-dallas-fogo-de-chao-restaurant-sizzles-in-wall-street-debut.ece

Wall Street’s hunger for new restaurant stocks pushed another North Texas brand beyond its initial public offering price.

Dallas-based Fogo de Chão Inc., a Brazilian-themed full-service restaurant chain, debuted Friday on the Nasdaq after pricing late Thursday at $20 a share. The initial price was above the earlier stated range of $16 to $18 a share.

The stock closed at $25.75, up nearly 30 percent.

Fogo de Chão is the second North Texas restaurant chain to go public in a week. Last Friday, stock in Dallas-based Wingstop soared in that company’s first trading day, gaining 61 percent from the initial offering price of $19 a share. Before that pricing, the high end of that company’s range was $14.

Fogo chief executive Larry Johnson thinks consumers are drawn to his chain because of the value proposition, the ability to have an affordable “white tablecloth experience.” That in turn “resonates with investors,” he said as the stock price continued its day-one climb.

Johnson said he thinks investors will take note of the brand’s growing popularity and acceptance by different age groups.

The company’s 26 U.S. locations, which range in size from about 7,500 square feet to 10,000 square feet, bring in about $8 million each annually on average.

‘Concept travels well’

The company expects the store count to grow by at least 10 percent each year, with Fogo eventually launching at least 100 U.S. locations. Johnson offered no timetable for the full buildout.

“We are comfortable that the concept travels well,” he said of the chain’s popularity in different markets across the country. “When you put all that together, I’m confident investors are going to get the story and are going to reward us for our performance.”

No new locations are planned for North Texas this year, but next year Fogo plans to appeal to carnivores in Uptown, which already is home to several popular steakhouses including Morton’s and Perry’s Steakhouse & Grille.

The company, which is owned by affiliates of Thomas H. Lee Partners, sold 4.41 million shares in the IPO. Lee Partners retains control of the company.

Fogo de Chão, which came to the U.S. in 1996, is the latest restaurant chain to whet Wall Street’s appetite.

PrivCo, which provides financial data on privately held companies, listed four restaurant IPOs this year, each of which posted a significant first-day pop. Each one – Shake Shack, Bojangles, Wingstop and Fogo – was priced at about $20 a share.

Burger joint Shake Shack closed at about $46 during its market bow, and jumped to more than $92 in May.

Fast casual

Many investors are trying to find the next Chipotle. The Mexican-themed fast-casual chain went public in 2006 at $22 a share and closed the first day at $44 a share. The stock closed Friday at $614.22.

Unlike most of those chains, Fogo de Chão is a full-service restaurant, rather than fast food or the current industry darling, fast casual.

Johnson noted that his chain’s average sales per location are much higher than those for a fast-casual concept.

The flip side, noted Sam Hamadeh, founder and chief executive of PrivCo, is that expenses are higher at a large full-service restaurant.

“That’s something [for investors] to keep in mind,” he said. “That’s a very expensive operation. That could be a problem at the first sign of a slowdown.”

Darren Tristano, executive vice president of Chicago-based Technomic Inc., a restaurant research firm, thinks the success of fast-casual IPOs is helping fuel growth of other restaurant stocks.

“Fast-casual restaurant chains continue to dominate growth,” said Tristano. “Technomic’s forecast five-year compound growth for fast casual is greater than 10 percent. As analysts and consumer investors look toward continued patronage and success of fast-casual restaurant brands, IPOs have been and are likely to continue to be strong going forward. This success will likely positively impact other major restaurant brands with IPOs.”


Analysts: Tia ‘Blew It’ Passing Up Outback

June 30, 2015

0411750336_15422277_8colJustine Griffin
Copyright 2015 Times Publishing Company. All Rights Reserved.
http://www.tampabay.com/news/business/retail/analysts-tampa-airport-blew-it-by-leaving-out-outback-steakhouse-bonefish/2234374

With ubiquitous chains like Outback Steakhouse, Bonefish Grill, Carrabba’s Italian Grill and Fleming’s Prime Steakhouse, Tampa-based Bloomin’ Brands is the most muscular restaurant company in Tampa Bay.

It employs nearly 95,000 people in its 1,500 restaurants worldwide. It had $4.4 billion in revenue last year. It sponsors the Outback Bowl, one of Tampa Bay’s signature sporting events.

Earlier this year, Bloomin’ put in a bid to be a concessionaire at Tampa International Airport as part of a $953 million renovation there. Bloomin’ has had a Carrabba’s at the airport since 2008.

But airport staff rejected Bloomin’s bid, as did the Hillsborough Aviation Authority on June 4 when it voted to accept Guy Harvey RumFish Grill, the Cafe by Mise en Place and Four Green Fields instead, as it sought to make the airport’s restaurants feel more local. One board member, Hillsborough County Commissioner Victor Crist, said Bloomin’s success worked against it – “Sometimes when you get too big, you lose your local identity,” he said.

But industry experts scoff at that notion and say the airport botched an opportunity to not only highlight a restaurant chain that has represented the Tampa Bay area as well as anyone, but to give travelers a familiar local restaurant brand to patronize.

“Frankly, if anyone is local to Tampa, it’s Outback,” said Malcolm Knapp, a restaurant economist in New York. “I think the airport authority just blew it. This decision is not the best for the traveling public.”

Officials with Bloomin’ Brands declined to comment for this story.

Tampa Bay has long had a reputation for being the home of chain restaurants. Hooter’s, Beef ‘O’ Brady’s and Checkers all have headquarters here. Bloomin’ was among the first. It opened in Tampa in 1988 with just one Australian-themed steakhouse.

“It’s a disadvantage to the airport, and disrespectful not to consider a brand whose roots come from that very community,” said Darren Tristano, executive vice president with Technomic, a restaurant research firm in Chicago. “Bloomin’ Brands helps drive the local economy and provides local employment. The airport’s decision seems shortsighted.”

The Carrabba’s in the airport’s main terminal will be replaced by a P.F. Chang’s, an Asian-themed international restaurant chain with no ties to Tampa Bay other than a few locations here. It is one of several national chains included in the mix of new airport restaurants including Wendy’s, Hard Rock Cafe and Chick-fil-A.

“We had a committee in place to evaluate the bid proposals and choose which ones would be best,” said airport spokeswoman Janet Zink. “There were lots of great concepts proposed that didn’t get picked.”

Bloomin’ had hoped to add an Outback Steakhouse and a Bonefish Grillat the airport.

“The average restaurant-goer doesn’t know that Bloomin’ Brands is from Tampa, or even what Bloomin’ Brands is,” said Brian Connors of Connors DavisHospitality, a global food and beverage consulting firm in Fort Lauderdale. “But they know what Outback is or what Carrabba’s is. No one is winning on either side here. There will be local restaurants and there will be other chain restaurants. Why the airport didn’t choose the chain that is from there, I don’t know.”

That brand recognition that Bloomin’ has makes it a natural fit for an airport, Knapp said.

More than 40 percent of shoppers prefer to dine at national chains in airports, according to a 2013 survey by the Airports Council International, whereas 36 percent of travelers will try restaurants unique to that region.

“People who are traveling are going to gravitate toward brands they’re comfortable with and what they know,” Knapp said. “They don’t want to take any chances when they know they’re in a rush. That’s why too many local options doesn’t serve the total population of the airport well.”


The Brass Tap to Open a Microbrewery in Carrollwood Bar

June 16, 2015

0435873611_15361234_8colJustine Griffin
Copyright 2015 Times Publishing Company. All Rights Reserved.
http://www.tampabay.com/news/business/retail/the-brass-tap-to-open-a-microbrewery-in-carrollwood-bar/2232977

The Brass Tapknows its customers can go just about anywhere to find a good beer these days.

In an effort to offer a more authentic experience beyond sampling the hundreds of beers it sells on tap and in bottles, the chain is opening its own microbrewery inside its bar on N Dale Mabry Highway in Carrollwood. The move to brew its own beer comes about a year after the chain abruptly closed its downtown St. Petersburg bar next to Rococo Steak. Despite the closure, the chain is still expanding aggressively, with four franchise locations poised to open in Florida this year and five others in the works in Texas, North Carolina and California.

“If you’re going to be a part of the craft beer movement, you have to be a destination,” said Darren Tristano, executive vice president with Technomic, a Chicago-based restaurant research firm. “You have to be more exclusive. By brewing beer in-house, the Brass Tap is driving more credit to its brand.”

And with more competitors saturating the market, such as World of Beer and the Yard House craft beer and restaurant chain, you have to stand out.

“It’s amazing how many people want to open a brewery,” Tristano said.

Microbreweries are sprouting in record numbers in Tampa Bay and across the country. The industry recorded a 127 percent spike in the number of breweries that opened in 2014 compared with 2012, according to the Brewers Association trade group. More than 600 breweries opened in the United States last year, including Coppertail Brewing Co. in Tampa. In St. Petersburg, 3 Daughters Brewing opened in December 2013, and a half dozen others, such as 7venth Sun Brewery in Dunedin and Big Storm Brewing Co. in Odessa, opened in 2012.

Rory Malloy, the Brass Tap’s new brewing operations manager, will brew beer from a two-barrel “nano” system in a small brewery marked off by a glass wall from the rest of the Carrollwood bar. The beer will be offered for sale at the bar, and customers can watch and ask questions while Malloy brews. He hopes to brew his first beer by the end of the month.

“We’ve always used this location to train franchisee owners and test new products,” said Chris Elliott, CEO of Beef ‘O’ Brady’s, which purchased the Brass Tap in 2012. “The microbrewery is a test for us. Our customers already love craft beer and many of them are interested in the process. Now they can learn more about it here in our bar.”

The concept has been in the works for nearly two years, Elliott said. The Brass Tap worked with Cigar City Brewing CEO Joey Redner on the concept. Cigar City will be among the first of many local breweries invited to brew a guest batch of beer at the Brass Tap microbrewery, Elliott said.

The chain hopes to partner with many of Tampa Bay’s local breweries, and some national ones too, such as Samuel Adams and Founders.

The idea isn’t to compete with breweries for customers. It’s to partner with them.

“There are so many breweries opening within a 5-mile radius of us,” Malloy said. “We can all share our resources.”

The Brass Tap may offer home-brewing courses at the microbrewery.

“The craft beer segment started getting hot in the ’90s, when a lot of guys were trying to do brewpubs that offered food and beer. The overhead was huge and the audience just wasn’t there,” said Brian Connors of Connors Davis Hospitality, a global food and beverage consulting firm based in Fort Lauderdale. “One of the best things to happen to the craft beer movement is the millennial generation. They’re willing to pay more for something of quality that’s made locally.”


Wahlburgers Goes for Burger Gold

June 12, 2015

pictureBy Joel Stein
http://www.bloomberg.com/news/articles/2015-05-28/wahlburgers-donnie-mark-paul-wahlberg-plot-fast-food-empire

Paul Wahlberg wanted to open a small restaurant in his hometown. Then his two famous brothers got involved

Paul Wahlberg can’t concentrate. He keeps looking around, fixating on a sticker stuck on a light and then a tiny carpet stain. Finally he can’t take it anymore and bolts up to correct the way an employee is changing a bulb. This isn’t a guy who should be starting a nationwide fast-food franchise. This is a man who should be placed gently back in his very small kitchen, with a limited number of things to stress about, as he has for decades as a cook at Boston restaurants including Alma Nove, an Italian restaurant he named after his sweet mother, Alma. After he comes back to the table, his eyes keep darting back and forth. “I got to touch up some paint,” he says. “I’m not telling you where.”

Paul’s two younger brothers are Mark (The Fighter, Marky Mark and the Funky Bunch) and Donnie (CBS’s Blue Bloods, New Kids on the Block), both charismatic, fast-moving celebrities with agents, managers, and—as seen on HBO—entourages. They’re also Paul’s business partners in Wahlburgers, which until earlier this year was one little mall burger joint in Hingham, a suburb 30 minutes from Boston. In 2015, Wahlburgers plans to open dozens of locations in Florida, Las Vegas, New York, the Middle East, and several airports. They marketed it through a cartoonish reality show on A&E called Wahlburgers that’s even less suited for serious, shy Paul, 50, with his gray sweater zipped up to the very top. It’s a show about a neurotic chef who is mocked and terrorized by his cooler, easygoing famous brothers.

“In a perfect world, Paul would have the one restaurant and in eight years possibly open a second restaurant,” says Mark, 43, calling from a golf course in Los Angeles. But once Paul invoked the family name, Mark decided to plan a full chain and pitch the reality show. “I said, ‘Paul, if you want to build a one-off, call it Paul’s Burger.’ I wanted to grow a real business that was passed on to future generations.” (Among them, the three brothers have eight kids.)

Donnie, 45, had to find a way to get Paul and Mark to compromise, slowing Mark down to assure quality and speeding Paul up to begin expansion. In 2014, Donnie took a train to Hingham every time he had a break from taping Blue Bloods in New York. Sometimes he’d write menu descriptions, but more often he’d try to convince Paul that Wahlburgers had to grow more quickly. “Paul’s so intense that everything gets heated. If one tomato is sliced wrong, he’d be on the verge of a nervous breakdown,” he says. There are nine siblings, and while Donnie and Mark share the fame thing, Donnie’s always been closest to Paul, so it fell on him to determine how to scale his older brother’s burgers. They cost $7.15 to $9.50 and are high-enough quality to satisfy fans who traveled for a special experience but not so expensive that they’re untrue to lower-class, Southie roots, the essence of the Wahlberg brand.

“What people generally think about Mark and Donnie Wahlberg is that they are hardworking people who are hustling and humble,” says Cory Isaacson, a partner at the marketing agency Walton Isaacson, which promoted Bethenny Frankel’s Skinnygirl brand when she was on The Real Housewives of New York. “If Katy Perry opened a burger joint, no one would think she’s actually affiliated with it.”

Mark said, “‘Paul, if you want to build a one-off, call it Paul’s Burger.’ I wanted to grow a real business.”

Based on that logic, the Wahlbergs believe they can win the ongoing burger war in the U.S. The battle kicked off a few years ago, when McDonald’s started teetering; earlier this year it fired its chief executive officer after its worst sales slump since 2001. In the meantime, the so-called better-burger category has stolen market share, with Five Guys growing from five stores in 2001 to 1,270, and Shake Shack doubling its market valuation during its first day of stock trading in January. It’s now worth more than $2.8 billion, with just 69 stores, or more than $41 million per stand. The category is saturated with its own fat: Smashburger (320 locations), Elevation Burger (52), the Counter (40), and Umami Burger (24) are growing at a fast clip nationally.

Wahlburgers is trying to differentiate itself by being both a restaurant like Umami and the Counter and a fast-food joint like Shake Shack and Smashburger. A third of each franchise is devoted to counter service, but there are also servers and a full bar. Paul was insistent about this concept, even as his brothers, outside investors, and their CEO—Rick Vanzura, former chief operating officer of Panera Bread, who first reached out on Facebook—pushed for the lower labor costs of self-service. “That’s not what I wanted to bring into the world,” Paul says. He wanted a place where older people are comfortable and bartenders sometimes dance to pop music, some of which is sung by his brothers.

One thing Vanzura brought with him from Panera was the belief that he could control quality by—unlike McDonald’s—having a large number of stores owned by a small number of franchisees, all of whom must have at least $5 million in net worth to be considered as partners. “People will say what we’re doing is unprecedented as far as growth from a single unit,” Vanzura brags as he eats a sweet potato tater tot. To get his job, he went to meet Donnie on the set of Blue Bloods, where NKOTB fans often lurk. (“I’m used to having a job interview in a job setting. A handler was walking me to his trailer, and I saw a sea of middle-aged women waiting there,” he says.) He met Mark at a Nobu, in New York, where they kept being interrupted by the waiter with special dishes the chef sent out. Mark in particular has been a good co-owner, Vanzura says: “When he calls franchisees and says, ‘I’m behind this and will make sure it gets a lot of exposure,’ that carries a lot of weight.”

None of this would’ve taken off without Mark’s TV idea. The original Wahlburgers had some pretty weak nights until the show began airing in 2014. Afterward, Paul had to start opening an hour earlier, at 11, once he saw people lined up outside. They did more than 400,000 checks in the tiny restaurant last year. The company is private, so Paul won’t reveal its annual revenue.

Despite seeming like more of a pun than a TV show, Wahlburgers is airing its third season. It averages 2 million viewers, according to Nielsen, and was nominated for an Emmy. Its success gives the chain a chance in a burger field that’s already pretty mature. “They’re expanding in Vegas, Miami,” says Sam Oches, the editor of QSR (quick-service restaurant) magazine. “This is what celebrity chefs do: move to very tourist-friendly places.”

But Darren Tristano, who covers food service for the market research company Technomic, thinks a split-service restaurant limits growth. “If you’re in a neighborhood looking for a place to sit down to eat, it’s going to work,” he says. “But when you look at the U.S. in terms of gross opportunities, there aren’t as many of those markets around.”

Hingham, a tony Boston suburb where New England Patriots coach Bill Belichick lives, certainly qualifies. It’s 11:30 a.m., and Wahlburgers is full of people essentially eating ground meat for breakfast. Alma walks around chatting with customers. She’s on the show, too, and has become a bona fide reality star, coming in on Saturdays to flit between the tables. After raising famous kids, she’s loving her own fame: “My friends said, ‘Doesn’t it drive you crazy?’ Are you kidding? People want to talk to me!” Paul nods sideways in disagreement. Sitting down for lunch, he looks flummoxed when a waitress brings him a hat to autograph for some customers. “It had always been, ‘Yo yo yo. You’re Mark and Donnie’s brother,’ ” he says. Paul liked it much better that way.


Sale Could Provide the Boost Frisch’s Has Been Searching For

June 12, 2015

http://www.bizjournals.com/cincinnati/news/2015/05/22/sale-could-provide-the-boost-frischs-has-been.html

bigboyface-750xx1739-2331-0-258Andy Brownfield
© 2015 American City Business Journals, Inc. All rights reserved.
Family-style restaurants like Cincinnati-based Frisch’s Restaurants Inc., which announced a planned sale to a private equity fund Friday, have been in decline for years. But an industry watcher says that segment is starting to turn around.

Chains like Frisch’s (NYSE: FRS) have been losing customers for 15 years to everything from fast casual concepts to fine dining to the growing a.m. eateries segment – restaurants like First Watch that stay open only for breakfast and lunch – Darren Tristano, executive vice president at Chicago food industry research firm Technomic, told me.

“Overall this segment has seen competition across the board,” he said. “Older consumers who are more traditional and grew up with these brands have shifted to other types of restaurants and aged out of spending. Younger consumers have seen the brands they grew up with, the fast casuals, become more of a preferred destination.”

That’s not to say it’s all bad news for the family-style restaurant segment. It has been growing as of late.

“The lower-middle income groups have been helped by improved employment, lower gas prices and higher disposable income,” Tristano said. “Because of that, this segment has done a little bit better.”

The segment grew 3 percent last year, up from no growth the previous year. However, that still pales in comparison to the 10 percent growth seen by the fast casual segment.

That slow growth or lack thereof put Frisch’s in a pickle, as outlined in the Courier’s Feb. 6 cover story.

In 2012, Frisch’s agreed to sell its 29 Golden Corral franchise restaurants in Cincinnati and six other cities to NRD Holdings LLC, which was led by Aziz Hashim. Golden Corral corporate exercised its right of refusal and purchased the restaurants itself. Hashim’s NRD Partners is set up to acquire Frisch’s for $175 million, or $34 per share, if shareholders approve the acquisition.

“At that point in time, the board started to say, ‘Where do we go from here in terms of creating shareholder value?'” recalled Mark Lanning, Frisch’s chief financial officer. “The board looked at various alternatives and finally looked upon the sale of the company. That process had been ongoing.”

The acquisition could be the shot in the arm Frisch’s needs, at least in terms of profitability. Private equity firms don’t try to revive brands but come in and try to make them profitable at the headquarters and corporate levels as well as more effective in advertising, Tristano said.

“When we look at Big Boy, it’s a very iconic brand,” he said. “It has strong opportunity to not only remain but increase relevance. I think with the right plan and right people, if they’re willing to invest into the brand to grow it, they could be on track.”


Pinkberry Flirts With Self-Serve in Two Southern California Shops

May 27, 2015

By Nancy Luna/Staff Writer

For several months, Pinkberry has been quietly testing self-serve machines in at least two Southern California locations.
http://www.ocregister.com/articles/self-662718-serve-pinkberry.html?page=1

Pinkberry, credited for launching the modern-day frozen yogurt craze, is testing self-serve machines in two Southern California locations.

The do-it-yourself experiment has been ongoing for months at shops in Brea and Burbank. A Pinkberry official played down the test, which comes a few years after Chief Executive Ron Graves said he would never play the self-serve card.

“Leapfrogging the competition requires you to know and be true to your brand as well as deeply understand your competition,” Pinkberry spokeswoman Laura Jakobsen told the Register this week. “This is research – you can only learn so much by observing.”

At the Pinkberry on Imperial Highway in Brea, the store offers 10 flavors at 49 cents an ounce. The front counter has a bar, where customers can choose from an assortment of fruit and candy toppings.

By comparison, a nearby Yogurtland in Brea had a menu of 16 different flavors at 41 cents an ounce.

In Burbank, the self-serve option has been around a year, while Brea converted in December. Jakobsen said Pinkberry has no plans to convert more shops.

“We opened the self-serve stores to gain insights from both a consumer and operational perspective,” Jakobsen said. “We are not considering converting more locations.”

Darren Tristano, a restaurant consultant for market research firm Technomic, said five years ago that premium frozen yogurt chains like Pinkberry “would have great competition from self-serve fro-yo brands” in a post-recession economy.

“There is no surprise that Pinkberry would test and consider replacing or adding self serve to their concept,” Tristano said. “The affordable price points of weigh-and-pay as well as the labor savings is a strong driver for change within the market.”

Though brands such as Golden Spoon Frozen Yogurt have been around for more than 30 years, Pinkberry is considered a pioneer in the category.

When Pinkberry debuted 10 years ago, it elevated the frozen yogurt category with its slick presentation and tart-heavy fruit flavors. Pinkberry now has 250 shops in 21 countries.

Copycat brands have since saturated the market, including Yogurtland, Tutti Frutti and Cherry on Top. To differentiate themselves, many adopted the self-serve model. Their popularity soared among consumers who enjoy controlling how their food is prepared.

“The trend in consumer control demonstrated by build-your-own formats is the next generation of customization,” Tristano said.

Irvine-based Yogurtland launched its first self-serve store in Fullerton in 2006. It now has about 300 stores in the U.S., Australia, Guam, Thailand, Venezuela and Dubai.

When asked in 2012 about the popularity of self-serve froyo, Pinkberry’s Graves told Inc. magazine that he refused to “go self-serve.”

“Why? Because that would be letting the competition define us,” he said.

History shows it could also be brand suicide.

In 2012, Rancho Santa Margarita-based Golden Spoon tested self-serve in a handful of Southern California stores. At the time, the chain said it would eventually convert at least 40 locations to the trendier do-it-yourself shops.

But after its loyal customers balked at the messiness of self-serve, the chain halted those plans.

“Sanitation was a key issue,” Chief executive Roger Clawson told the Register in 2013. “Our core customer demands full service.”


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