How Trendy Yogurt Chain Pinkberry Frittered Away Its Buzz Moment

Last Updated Sep 23, 2010 12:19 PM EDT

Five years ago, tangy-yogurt purveyor Pinkberry burst on the scene and was an instant hit. Customers lined up around the block. In 2007, Starbucks (SBUX) founder Howard Schultz invested in the Los Angeles-based chain, and dominance seemed assured.

But dithering about growth strategy has allowed competitors to catch up. Red Mango -- which actually kicked off the trend in 2002 but didn't catch Pinkberry's level of attention -- has a similar number of stores to Pinkberry, which is aiming to hit 100 units by year-end. By letting competitors catch up and wasting precious time during which its food fad was at its height, Pinkberry has squandered its opportunity to dominate the niche it created.

It's apparently taken three years to build the management team necessary to support rapid expansion, company CEO Ron Graves recently told the Los Angeles Business Journal.

Really? In this economy, with the number of people out of work we have, a hot new brand like Pinkberry couldn't find good managers to work for them? It feels like there's something more to the story of why it would take three solid years to figure out a good expansion plan. How about putting lots of stores in L.A., then Phoenix... and then continue building steadily in the big cities in warm-weather states? It's hard to see what caused the holdup.

While many chains make the opposite mistake and quickly throw franchised units up wherever an owner is willing to pay the franchise fee, it's refreshing to see a chain be thoughtful about where it's putting units. But despite the long planning phase, it's not clear that a thoughtful expansion plan has emerged at Pinkberry. Even though it's really just a budding U.S. chain, it's already opening stores around the globe, including in the United Arab Emirates. It seems a little early for going global.

For some chains, slow growth is desirable. But when you're dealing with a faddish food such as a new strain of yogurt, it's important to move fast. Nobody knows how long interest in tart yogurt might last. Pinkberry needs to step on the gas pedal now, while customers are still enthusiastic "groupies," and before they move on to the next food trend.

Photo via Flickr user VirtualEm

  • Carol Tice

    Carol Tice is a longtime business reporter whose work has appeared in Entrepreneur, The Seattle Times, and Nation's Restaurant News, among others. Online sites she's written for include Allbusiness.com and Yahoo!Hotjobs. She blogs about the business of writing at Make a Living Writing.