Rising health-consciousness will drive industry growth, though price competition will intensify
Los Angeles, CA (PRWEB) November 12, 2013
The Frozen Yogurt Stores industry has grown at a rapid pace over the five years to 2013, despite the recession. Driven by consumers' increasing health consciousness and the emergence of tart-flavored frozen yogurt, IBISWorld estimates that revenue has climbed at an average annual rate of 21.0% during the period. Growth was particularly strong in 2011 and 2012, as the economy emerged from the recession; per capita disposable income inched upwards and a number of new franchisers ramped up their growth aspirations. Growth is expected to temper slightly in 2013 as the industry reaches saturation point, however, industry revenue is still expected to advance at an impressive 22.6% to $1.5 billion.
According to IBISWorld Industry Analyst Andy Brennan, “The health trend, highlighted by the declining per capita consumption of sugar and sweeteners, has helped propel the industry over the past five years.” Frozen yogurt, which is a low-calorie, nonfat alternative to ice cream, has been favored by an expanding demographic. In fact, major player Red Mango states that part of its location strategy includes setting up shops in college towns because students are typically more health conscious than the average American. The health-driven expansion has also driven demand for self-serve frozen yogurt stores, since they allow consumers to limit their consumption based on their dietary needs and concerns.
Nevertheless, industry growth has not been without its hiccups. As the recession set in and consumer confidence plummeted, profit suffered. “Profit margins will come under increasing pressure over the next five years, as industry competition intensifies and the larger chains increase their store counts,” says Brennan. Already, a number of independent frozen yogurt stores have exited the industry, due to intense competition. As a result, the industry has a medium level of industry concentration. The fall in industry concentration can be attributed to entry of a number of new players with new products that have rapidly expanded through a franchise model and taken market share from existing players.
IBISWorld projects that health concerns and consumption patterns will continue to drive industry growth through the five years to 2018. However, industry revenue will grow at a slower rate than in the previous five years, as the industry becomes saturated.
For more information, visit IBISWorld’s Frozen Yogurt Stores in the US industry report page.
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IBISWorld industry Report Key Topics
The Frozen Yogurt Stores in the US industry includes establishments that primarily prepare or serve frozen yogurt and other yogurt-based items, such as smoothies.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.