Shop Talk

Retailers, consumers and prices

Fro-yo leaders break from the pack

August 22, 2008

newpinkberry1.jpgFrozen yogurt is hot — again.

Pinkberry and Red Mango revived the segment and are breaking away from the pack with help from venture capital funding.

While the last generation of frozen yogurt sellers offered ice cream-flavored swirls, next-gen “fro-yo” shops peddle a tart and tangy product that tastes closer to unadulterated yogurt — boosting its appeal as a healthy snack.

The new stores are bright and modern, but they’re not the only place where groupies can congregate — Pinkberry and Red Mango invite their tech-savvy fans to meet up online.

Pinkberry is working with $27.5 million in venture funding from Maveron, a Seattle-based venture capital firm co-founded by Starbucks CEO Howard Schultz. The chain expects to finish the year with more than 75 stores, primarily in California and New York.

Pinkberry’s following includes stars like Paris Hilton. Its founders Shelly Hwang and Young Lee have achieved celebrity statusĀ  of their own — they’re being featured in an ad for American Express.

redmango.jpgRed Mango last week announced $12 million in venture capital funding from Dallas-based CIC Partners and former Blockbuster CEO John Antioco.

It has 35 U.S. stores in California, Illinois, Nevada, New Jersey, New York, Oregon, Utah and Washington and operates independently from the original Red Mango chain that has more than 100 stores in South Korea.

Red Mango CEO Dan Kim plans to have 50 U.S. stores by year end, with most of the new additions in New York and Los Angeles.

While imitators are springing up by the dozens, Kim expects that just a few national chains will be left standing.

“I think over the next 24 months you’ll probably see a shakeout of the smaller players,” Kim said.

(Pinkberry photo: Reuters; Red Mango photo: company)

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