Ice-Cold Yogurt, Red-Hot Growth

HARVARD Square is known for more than think tanks and bookshops. To the ice cream lover, it is paradise, with gourmet shops packed with people day and night. But times are changing. Here and nationwide, the number of ice cream scoops is melting slowly, giving way to a lower calorie, lower fat alternative: frozen yogurt. Across the country, sales of frozen yogurt are booming, with business soaring from $200 million in 1985 to $1.2 billion in 1989, according to FIND/SVP, a market research firm in New York. That's an annual growth rate of 58 percent; or 516 percent in just four years.

By 1993, FIND/SVP estimates that frozen yogurt sales will double to $2.6 billion.

``That's a lot of growth,'' says Craig Weichmann, restaurant analyst with Morgan Keegan in Memphis. Attributing the growth to the increase in outlets selling frozen yogurt, Mr. Weichmann notes that restaurants like McDonald's have switched from serving ice cream, and ice cream chains like Dairy Queen and Baskin Robbins have added yogurt to their menus.

Franchise sellers, led by TCBY (The Country's Best Yogurt), based in Little Rock, Ark., have also boosted sales. Colombo Inc. of Metheun, Mass., is the No. 1 supplier to restaurants, fast-food outlets, and convenience stores.

In the frozen dessert category, notes Weichmann, frozen yogurt accounts for 14 percent of all sales, hard ice cream takes 34 percent, and soft serve 45 percent.

Hard-pack yogurt sold in supermarkets is growing less rapidly than soft-serve. Still, sales of $100 million in 1989 are expected to grow by 53.4 percent a year until 1993, reports FIND/SVP.

``It just pours right out of the store,'' says Mark Hammersmith, manager of frozen foods at Star Market in Cambridge, Mass. He says vanilla and chocolate are the favorite flavor; half gallons are gaining popularity, taking shelf space that used to hold ice cream.

Why the popularity of frozen yogurt? ``I like it because it is a lot lower in calories than ice cream, but tastes just as good,'' says one shopper, referring to prevalent health theories about low-fat foods.

Will frozen yogurt remain popular? Analyst Weichmann says that because the growth has been driven by consumer demand, sales will remain strong. ``The consumer obviously has developed an appetite for it. Many consumers have decided the taste is pretty good, and if you can cut fat content down and calories down by making that switch, it's a suitable switch,'' he says.

Most frozen yogurts contain from zero to 4 percent fat content. But there are no specific guidelines for frozen yogurt, says Chuck Timpko, manager of consumer research at the National Dairy Board in Washington D.C.

Refrigerated or ``cup'' yogurt sales have been growing, too, exceeding $1 million in sales in 1988, reaching per capita consumption of 4.6 pounds, according to FIND/SVP.

Is America's love affair with low-fat dairy products bad news for dairy farmers, for whom the federal government sets floor prices based on the fat content of the milk? For years the dairy industry has tried to change the federal regulations. Today, low-fat dairy products - skim, non- and low-fat products - account for 70 percent of all milk sales, says Mike Brown of the National Milk Producers Federation. Many local cooperatives now offer payment on a total-solids basis. Also, the farm bill recently passed by Congress directs the United States Department of Agriculture to look into converting to payment based on all components.