Sweet Revenge - Franchises

Sweet Revenge
By ROB WALKER
Published: September 5, 2008
Red Mango Frozen Yogurt
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The Pinkberry frozen-yogurt chain made its way into American foodie consciousness with a wave of publicity and buzz. The original location, which opened in 2005 in West Hollywood, was so popular that it caused neighborhood parking problems. People lining up for yogurt attracted media attention, causing more people to line up for yogurt. Gradually the trend stories expounding on the chain’s tart yogurt, eclectic toppings and stylish design started to include a sentence or two about a South Korean yogurt chain called Red Mango — with more than 100 locations in that country dating back to 2002, and known for tart yogurt, eclectic toppings and stylish design.
One person who was particularly attuned to these footnotes was Dan Kim, who is today the president and chief executive of the North American version of Red Mango. According to Kim, the Korean incarnation of the company, which was founded and operated by a former colleague of his, always had designs on the U.S. market. And when Kim saw a local news report on a Los Angeles television station in 2006 about Pinkberry mania, his reaction was “mixed.” On one hand, he says, “it was proof that there was a market.” On the other hand, Pinkberry soon had more than 20 locations — and a lot of press. Red Mango couldn’t compete very effectively: “It’s hard when you have zero stores,” Kim said. Red Mango could have ended up playing Frusen Glädjé to Pinkberry’s Häagen-Dazs.
But it’s now been a little more than a year since Red Mango opened its first location in the U.S., in Los Angeles, and it’s fairly clear that — on the third hand, as it were — having a clearly defined rival is not such a bad thing. We can’t know how Red Mango would have done had it come into the American market as an overseas innovator peddling a novel food concept. But since coming in well after Pinkberry had put tart “fro-yo,” as fans call it, on the food-fad map, and carrying with it a plausible claim to being the creator of that very fad, Red Mango has opened 36 stores and attracted its own fan base.
It’s a cliché that the fight for survival brings out the best in business rivals, but a clear rivalry is also useful to consumers — it’s something to latch on to, an opportunity to take sides. Many Red Mango locations are in conspicuously close proximity to a Pinkberry. Kim claims this is a “coincidence,” owing more to his own chain’s real estate research than to any provocation. But read the reviews on Yelp.com of the Pinkberry and Red Mango locations that more or less face each other on Bleecker Street in New York. The Red Mango at 182 Bleecker registers four stars out of five, based on 74 reviews — many of which reference Pinkberry directly. “Yummier than that noisy overrated Pinkberry across the street,” one reviewer declares. Another notes that “the truly devoted (Koreans) will tell you Red Mango was around long before Pinkberry,” before concluding that “the rumors are true — it’s better.” Click over to the reviews of the Pinkberry at 177 Bleecker (there are 48, with a three-star average) and here is another Red Mango loyalist claiming to have been Pinkberry’s “No. 1 fan” but now chiming in with a one-star slam. Pinkberry fanatics are also in evidence on both chains’ reviews, as are those who have simply heard of the fro-yo war and decided to perform a personal taste test. (“I liked Pinkberry better,” concludes one such reviewer.)
Ron Graves, the chief executive of Pinkberry, responding to questions via e-mail messages, asserts that he doesn’t “feel any one competitor has had much impact on Pinkberry.” He acknowledges sending cease-and-desist orders to smaller rivals with “confusingly similar trademarks,” and the company had a notorious legal run-in with one Los Angeles shop that included accusations of physical threats. But he repeats the standard Pinkberry story that its founders were inspired by visits to “yogurterias and gelaterias in Italy and Vienna.” Kim, of Red Mango, finds that “very hard to believe” but goes on to argue that his U.S. version of the chain has a less pop-ish, and more health-focused image than either the Korean version of Red Mango or Pinkberry. That said, he adds, “We are the original.” Maybe so. But while foodie crazes (low-carb everything; Krispy Kreme; etc.) come and go, this one seems to have drawn life from the feud. After all, a declaration of originality is one thing; an argument about originality is something the rest of us can get involved in.