Llaollao discontinued due to 'menu exhaustion', says franchisee D+1 Holdings

Frozen yogurt chain llaollao made its abrupt exit in Singapore last week, and was quickly replaced by a new yogurt brand Yolé. This resulted in the conversion of 29 llaollao outlets in Singapore over the weekend.

In a statement to Marketing, a D+1 Holdings spokesperson said that the company felt the llaollao menu was “exhausted after three years” of being in the business. As such, Yolé will bring a much wider menu with a larger variety of products, which emphasises on innovation and quality.

“Objectively, we believe Yolé is a better product and has a wider menu. We also firmly believe that Yolé will suit the Singapore market with exciting flavour innovations and well-known toppings from Spain and Italy,” the spokesperson added.

To boost brand awareness and sustain consumer interest, Yolé will launch new frozen yogurt flavours on a weekly or bi-weekly basis, alongside a wide selection of toppings. Overtime, Yolé will study the market and their customer expectations to develop future flavours and add even more toppings, the statement read. The new brand was launched by the D+1 Holding’s in-house team, with its management heading the marketing team.

“We are excited to work hand in hand with Yolé to ensure that the brand continues its upward trajectory, increasing its presence across Asia as well as building new market horizons worldwide,” the spokesperson added.

Responding to D+1’s claims that menu exhaustion was the reason for discontinuing llaollao, Andrew Crombie, brand consultant and former CEO at Fitch, Southeast and North Asia, said that if llaollao was truly failing due to menu wear-out, a wider menu will help rekindle business. However, that could have been done under the llaollao brand.

“A wider menu will only help Yolé replace llaollao and grow its business faster, if it’s something the consumer wants. I think it is a nice-to-have and a convenient excuse, but a justification for the change, not the cause,” Crombie added.

For Nick Foley, APAC president of Landor, while Yolé may solve the problem of menu exhaustion previously faced by llaollao, consumers are still looking for “deeper connectivity with a brand than just a bigger array of flavours”.

Foley explained that flavours are a functional point of connection for a product. When higher order needs are met, greater emotional appeal becomes more likely. However, there is no silver bullet to declining sales in the takeaway food sector. Citing McDonald's as an example, he explained that the fast food giant had significantly broadened its menu only to see the decline in sales continue. He added:

A wider menu will not be the panacea to the company’s current woes.

According to Foley, to adapt, Yolé will need to quickly establish itself and build the appropriate equity with consumers. However, this would not be an overnight solution. When asked how D+1 Holdings can retain llaollao’s strong consumer base, Foley said the task would likely be a tough one as it takes years for brands to build the necessary esteem with consumers. He added that dairy can be a tricky category as trust is king.

“Marketers need to create brands that are desirable, distinctive, engaging and credible in the minds of consumers. Once a firm brand position is established, attention can then be given to the brand experience,” Foley explained.

Ultimately, brands need to be positioned in order to drive relevance with the consumer whilst ensuring the offer is demonstrably different from that of the competition. Without this, sales will drop and equity will remain weak.

For Crombie however, this is not an issue of brand equity. Rather, it is an issue of whether the new brand Yolé satisfies the customer as well or better than llaollao did.

“If the customers believe Yolé to be better, they will adopt Yolé. If it is substantially better than the other competing brands, it may grow their share,” Crombie added.

While there will still be brand equity in llaollao amongst its core customer base, it will erode over time.

However, if the brand owner or a new franchisee reintroduces llaollao, as was done recently with Gong Cha, Crombie said that the new franchise owners would benefit from equity that was established and paid for by D+1 Holdings. If it is done quickly, it might even undermine D+1 Holding’s attempts to convert the customer base to their new brand, Yolé.

For D+1 Holdings, the challenge is to quickly establish Yolé brand equity, and to convert the core llaollao customer base before they switch allegiance other brands. As such, its success in transferring consumers will mostly be down to the Yolé product experience and brand equity for Yolé will form as a result of the experience.

“Brand owners need to weigh the risks of switching brands out for another, especially in a competitive market based on taste. It can be done effectively with good planning and deft execution, but as you are dealing with consumers’ emotional attachments, you are always taking a risk,” Crombie said, he added:

It may in theory seem logical that you can shift the customer base, but that doesn’t necessarily mean consumers will agree in practice.

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