Article
TCBY CEO discusses the company's continued evolution
Chain creates consumer insight team to stay ahead of busy segment.
November 3, 2011 by Alicia Kelso — Editor, QSRWeb.com
The fro-yo category is expanding at a dizzying pace. According to a recent report from Technomic, nine of the 10 fastest growing "frozen desserts/snacks" concepts are frozen yogurt businesses.
As TCBY winds down its 30th anniversary year, the company has proven longevity is possible regardless of trends or saturation. QSRweb.com spoke to CEO Tim Casey about how the company has differentiated itself as the segment becomes more crowded.
QSRweb: How has TCBY maintained relevance in an increasingly saturated fro-yo category?
Tim Casey, CEO:I think always creating points of differentiation for the consumer is key. In any segment that is growing, there are new brands entering the arena and the consumer has more choices, so the more points of differentiation you create, the better chance you're going to have at getting them to choose your brand.
QSRWeb: How does TCBY differentiate itself?
Casey:One thing we have that nobody else does is the longevity; the strong heritage and the strong background. Also, we have always had the healthiest product and that was taken to a whole new level recently when we launched our Super Fro-Yo. From my point of view, this put us on an industry-defining level.
QSRWeb: What was the motivation behind the Super Fro-Yo development?
Casey:We did a tremendous amount of research to understand what the consumer wants from us and this is one of those things they were looking for. We heard them telling us that the nutritional benefits of yogurt were really important to them. That classification is increasingly relevant to consumers and Dr. Wayne (Geilman, a food scientist who leads the chain's R&D division) has not stopped working to make sure our products continue to evolve.
QSRWeb: Has TCBY seen results yet from its extensive rebranding efforts introduced last year?
Casey:The rebranding has been a big success for our organization. Self-serve is what consumers want now. We gave it to them and they're really rewarding the brand (TCBY does not release financials). Average volumes have doubled what they were prior to those efforts and I would say we're probably leading or close to leading the industry. Also, with the new branding, imaging and self-serve model, the number of franchisees we have has grown exponentially. In Texas alone, for example, we have a development agreement for 200 stores.
This new look, new feel and new experience was introduced in conjunction with the Super Fro-Yo and our flavor initiatives. The flavors we have in our library has tripled from what it was 18 to 24 months ago. We already had great heritage flavors, but we heard consumers saying they wanted more options, and faster. We put a lot of resources into tripling the number of our flavors, and we're seeing a very positive response to that, as well.
QSRWeb: Does the self-serve model now exist in all locations?
Casey: No, but many – most – of our franchisees have or will opt-in because it's been very successful. Some are still doing more traditional stores, but that's maybe because of their store design or customer base. The traditional model is still very much a part of who we are as a brand and we have a couple hundred units that continue to do well with that business model. Still, the self-serve model is a real success and over 90 percent of our franchisees are choosing to go with it. Our franchisees appreciate the flexibility and, as customer demand changes, who's to say whether or not traditional will become relevant again?
QSRWeb: Did the company face a challenge in rebranding because it's been around for so long?
Casey:You always want to make sure you evolve as a brand, but still stay relevant and not alienate the guests who have been with you for 30 years. One thing we were careful about doing in our research was making sure we paid enough attention to the emerging self-serve customer, but also the loyal consumers who have been with us for so many years. What's interesting in this case is that both wanted the same thing – a great experience in a great environment. I think we did a good job creating an in-store experience that was respectful of new and existing customers.
QSRWeb: How has the industry changed in the 30 years TCBY has been in business?
Casey:Taste and flavor has always been relevant to the consumer, but what's different – and good for us – is that health is playing a bigger part. Consumers are more aware than ever of the benefits of things like probiotics and of yogurts in general.
QSRWeb: Does the growth of the fro-yo category help or hurt TCBY?
Casey: If you look at the segment, growth like this is always a good thing. When a segment like this is growing this fast, it creates a lot more awareness of our products and relevance to the consumer. We saw this same thing a few years ago with the coffee industry.
It also forces us to get even better at our game because consumer expectations are changing and they now have more choices. Any time the consumer has more choices, it forces leaders to listen harder and continue to differentiate. Brands that listen to the customer will be better off, but overall the customer wins.
QSRWeb: How does TCBY 'listen' to what its customers want?
Casey:Social media is something we leverage and will continue to leverage even more into 2012. In the last 90 days, we have created a consumer insight department as an extension of our R&D team. This department is a dedicated resource to make sure there is a transfer of knowledge from what our customers are saying via social media to our R&D team so that we can continue to evolve with them in mind.
QSRWeb: What can we expect from TCBY in 2012?
Casey:We expect to keep growing. Our growth number was 75 stores for this year and we'll accomplish our objective. Our growth objectives for 2012 will exceed 2011 and I'll be able to share the actual numbers later.
We will also put even more attention and resources toward marketing and social media, and enhance our resources there. Social media gives us a wonderful opportunity to engage the customer in a two-way dialogue and listen to them. We don't want to use it to sell to them, but to find dialogues so we can find out what they want and do it better. Social media allows us to see trends better than ever before. Our real mission continues to be to get to know customers better than anyone else in the industry.
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