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America’s Yogurt Lab to make India debut

LiveMint logoLiveMint 27-06-2017 Harveen Ahluwalia

New Delhi: American restaurant chain Z&H Hospitality is set to launch its frozen yogurt brand Yogurt Lab in India by the end of this year. The company, which operates Yogurt Lab outlets in the US, plans to open 50-70 outlets in India over the next five years.

Founded in 2012, Z&H Hospitality also runs casual dining chain Agra Culture Kitchen & Press, and sushi and Asian fusion food chain SotaRol.

Yogurt Lab outlets are typically self-serving frozen yogurt shops with rotating taps of 16 flavours and a variety of toppings. Although the company has less than 10 outlets in the US, it is betting big on India.

“India seems to be a very promising area of growth. We are looking to set up at least eight-ten Yogurt Lab outlets in each of the mega cities like Delhi, Mumbai, Chennai and Kolkata in the next few years. Apart from that, we also want to focus on expanding in cities like Pune, Hyderabad and Bengaluru, ” said Aaron Switz, founder and chief executive officer at Z&H Hospitality. The company is currently looking for franchise partners in India.

Switz added that the company operates very few Yogurt Lab outlets in the US because of unsuitable weather conditions and, hence, is planning to expand the brand in other countries.

The outlets for Yogurt Lab will be spread over 600-1,000 sq.ft, but the company is also evaluating a kiosk model with smaller stores at 200 sq.ft. “There is a good mall culture here where we can just set up small kiosks and operate in the take-away space,” said Switz.

In the US, Yogurt Lab offers products in the price range of $3.50-6, but “the price will be lower in India because the labour here is cheap and the rents will be lower since we are looking at smaller outlets,” Switz added.

Going forward, the company is planning to expand its brand Yogurt Lab in the Middle East and in China. The idea, Switz said, is to double the revenue from Yogurt Lab in the next three years from the current $4 million (in 2016-2017). The company may also introduce its other brand ‘SotaRol’ in India, depending on the franchise partnership here.

Retail experts feel that yogurt is still an alien concept in India with a couple of independent yogurt brands like Cocoberry and Red Mango operating in the segment.

“The success of the brand will depend on how the company builds the narrative around this new concept. A lot of effort is usually required to create a category in India. Surely, the market exists. People are experimenting with desserts. It all depends on how the company markets the product and captures the attention of people,” said Ankur Bisen, senior vice-president, retail and consumer at retail consultancy Technopak Advisors.

A former executive of a popular frozen yogurt retail chain, however, said that the plan to run an independent yogurt chain is a risky proposition. “A lot of companies, in the past, have shut shops because they were not able to break-even with the frozen yogurt shop format. Companies need to diversify and can’t just focus on one product in the long run. Having said that, the success of the brand still depends on how the product is promoted and marketed,” the executive said.

The food services market in India is projected to touch Rs4.98 trillion by 2021 from Rs3.09 trillion in 2016, growing at an annual average rate of 10%, according to a joint report by National Restaurants Association of India and consulting firm Technopak Advisors.

The Indian restaurant industry will contribute Rs22,400 crore by way of taxes and create 5.8 million direct jobs in 2016, the report said.

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