Last week I posted on what I felt was a strange and less than good move by Crumbs Bakery to go the route of an IPO. Indulgence based products and services seem to me to be a difficult area to sustain a consistent demand.
In this week’s Advertising Age it was reported that Cold Stone Creamery had embarked on a venture to compete in the self-serve, you weigh it and pay frozen yogurt category. http://bit.ly/fjmmXR . You remember Cold Stone Creamery don’t you? They were a darling for a few years and then not so much. In 2009 Cold Stone Creamery did U.S. $ 429 million in sales, but those sales were flat year over year.
My wife and I live in a town in Connecticut that has a small ice cream store with a couple of small sit down tables. Back in 2000 we thought about opening a Cold Stone Creamery which at the time was a relative newcomer (we remember Steve’s Ice Cream from Massachusetts and then New York from the 1980’s with the concept of mix-ins). We ended up passing on the idea because we were concerned about how the store would perform in the dead of winter. Cold Stone Creamery is a one trick pony.
A recent story on franchising on CNBC http://www.cnbc.com/id/39911155 outlined how Cold Stone Creamery franchisees (who have to purchase EVERYTHING from a company set up by – Cold Stone Creamery, were having difficulty making money – even those that were near the top in gross sales. Cold Stone denied much of the story. But the move to enter the Frozen Yogurt bar area suggests that the management of Cold Stone Creamery is uncertain as to what to do next.
Cold Stone Creamery has a brand – a pretty good identity at that. Rich tasting, indulgent and expensive ice cream treats/confections. If you remember the young people that did the mixing would sing while they worked – supposedly for tips. Now they are moving away from that concept entirely yet under the same brand umbrella.
I for one do not get it. Also noted in the Ad Age story is that Cold Stone Creamery spends $ 3 million on average in measured media. And now they are offering a completely different concept so there is a need to inform the consumer that what the perception of Cold Stone Creamery has been has changed. The management of Cold Stone Creamery acknowledges that Americans have moved to serve-yourself yogurt bars. So they are reacting by joining in the newest rage.
To me Cold Stone Creamery does not have any idea what to do next and is reaching for a solution and will come up empty. The next thing you might see them do is float out an IPO.
It’s too bad. I thought they had something that could have been built upon.
How about you? Have you gone to Cold Stone Creamery recently? Ever? What do you think?