Berry, Berry Ambitious

With help from celeb friends and fancy chairs, the fro-yo chain Pinkberry has whipped up plenty of hype, but can it–and should it–become the Starbucks of soft-serve?

Like any Hollywood starlet, Pinkberry knew it had arrived when it made the pages of two of America’s most popular publications: Us Weekly and People. Since the frozen-yogurt chain first opened in West Hollywood, California, in 2005, Paris Hilton, Lindsay Lohan, and even Mike Tyson have been seen spooning Pinkberry. It’s been written into Saturday Night Live and Ugly Betty. Fans hold vigil online–lots of exclamation points, not candles–for new store openings, and have appropriated the term “crackberry” from BlackBerry addicts. Forget the country’s best yogurt–this is its most famous.


And perhaps its most ambitious. Pinkberry, founded by businesswoman Shelly Hwang and architect Young Lee, now has 34 stores in L.A. and New York City, with plans to hit London and Las Vegas in 2008. Copycats have sprouted across the country, complete with similar names (Kiwiberri, Snowberry) and short menus (Pinkberry offers two flavors: plain and green tea). In October, Pinkberry got a lucrative vote of confidence: $27.5 million from Maveron, the VC firm launched by Starbucks chairman Howard Schultz and Dan Levitan, an ex-managing director of the investment bank Schroders & Co. (now part of Citigroup ). “Maveron looks for consumer brands with passionate customers. Pinkberry definitely fits our model,” says Levitan, who likes his Pinkberry plain, with almonds and blueberries. “We’re excited about their growth and loyal customers.”

But Pinkberry isn’t about the yogurt. In fact, it’s debatable whether “swirly goodness,” as Pinkberry often calls it, is even yogurt. In May, California food regulators said it wasn’t, because it did not meet yogurt-pasteurization standards. (Pinkberry says it now does.) And a California man filed a lawsuit alleging that swirly goodness lacked enough active bacteria to be yogurt. (Pinkberry says the suit has been settled.)

The story of Pinkberry’s success is really about the chain’s image as a design brand. “In my stores, I serve you a $5 dessert, and I let you sit in $500 chairs,” says Lee of the Philippe Starck Victoria Ghost chairs in every Pinkberry outlet. “People can tell the difference.” They’re eating it up right now, but will they still if Pinkberry becomes as ubiquitous as, say, Starbucks?

Pinkberry’s origins, like those of so many Hollywood figures, are murky. Red Mango, a five-year-old Korean chain that came to the United States in 2007, has claimed that Pinkberry copied its concept. Cofounder Hwang is even rumored to have briefly worked at a Red Mango shop. (A Pinkberry rep says it’s “absolutely not true.”)

Lee downplays Pinkberry’s Asian roots. He names eclectic influences, from Hermès to Target. And he cites the mom-and-pop yogurterias of Italy, the source of the dairy-based powder from which Pinkberry’s maybe-yogurt is made. “That [concept] has been around for 20 years,” he says. “We deliver it with design.”

In addition to the $500 chairs, that design includes $300 Le Klint lamps and $60 kitchen gadgets by Alessi, which serve no purpose except to look good on Pinkberry’s shelves. Lee, a former club bouncer, says these elements–plus the celeb halo, an often painfully long wait, and one off-menu item, mochi, available only to cognoscenti–make people feel as if they’re behind the velvet rope for 15 minutes. He hopes they’ll repeat the experience several times a week. (The firm won’t release financials, but busier stores draw 1,500 customers a day.)


“When a person buys Pinkberry, of course they’re paying for the yogurt. But they’re also paying for the experience of waiting in line–I’m trendy!–and for a seat in a Philippe Starck chair–I’m so sophisticated!” says Orli Sharaby, a fashion editor at the trend-spotting firm PSFK. “It ties into the larger consumer trend of wanting to pay a premium for experiences as opposed to products.”

Pinkberry has expanded cautiously, rejecting more than 3,000 would-be franchisees and accepting only 12. Maveron’s infusion suggests growth will quicken, but Eli Portnoy, chief strategist at the Portnoy Group, a brand consultancy, thinks that expansion will only damage Pinkberry’s cool factor. “You can’t take a Hollywood nightclub concept and drop it in the suburbs of Kansas City,” he says. “When it gets to the general populace, it wears thin.” And food-industry analyst Harry Balzer of the research firm NPD Group is skeptical that consumers will pay upwards of $5 for Pinkberry, repeatedly and over the long term, especially since fro-yo isn’t a staple like coffee.

Given Pinkberry’s design focus, it will also need to freshen its stores when those Ghost chairs are scratched up–or worse, passé. Pinkberry creative director Yolanda Santosa, who used to design opening credits for TV shows such as Desperate Housewives, says she’s trying to give the stores “seasonality.” At Halloween, for example, a Hitchcockian scene was silhouetted onto the store walls.

Santosa has sought to cultivate the chain’s fan base with “groupie” events and a MySpace page for Pinkberry (female, 20 years old, Capricorn, mood: amused). But what she can’t control are the fickle celebs who, from the start, have been Pinkberry’s best advertisers. Not too long ago, Paris Hilton was spotted getting some fro-yo–at a place called Cantaloop.