Cloud Top’s organic, functional product takes frozen yogurt to a higher level.

by Bob Garrison

Given the economy and her business’ recent start, Kathy Kim admits she was “anxious” about committing her Pasadena, Calif., frozen yogurt company to exhibit at a national trade show. Yet late June (2009) found Kim on cloud nine after the All Things Organic (ATO) convention at Chicago’s McCormick Place.

That’s because Kim’s Cloud Top business earned one of just four “best in show” new product honors. Of more than 30 total contest entries, ATO judges selected Cloud Top’s frozen organic functional yogurt as “Best in Foodservice Category.”

It was just the affirmation – quite literally – that Kim needed.

“We must have served nearly 500 samples of frozen yogurt that first day,” she says. “I would serve our product and give the visitor a moment to taste it in silence. Once they started to ‘mmm’ and ‘awww’ over the taste, I would tell them about the functional health benefits in that cup of Cloud Top.

“That’s when their interest really piqued and they began to ask me questions about distribution, availability and order lead times,” she continues. “Distributors, buyers, industry executives, were praising us for our innovative and delicious organic frozen desert. We could not have been more thrilled with the response.”

Started just two years ago, Cloud Top offers Signature Organic Tart and Tarty Organic Vanilla frozen yogurt mixes. Unlike other frozen yogurts, Kim says Cloud Top products contain no artificial flavors, colors, sweeteners, or preservatives. And while a majority of others use ordinary milk as their base, Cloud Top (certified by Oregon Tilth) is the only one to use all USDA-certified organic ingredients or those specifically allowed by National Organic Program guidelines.

And Kim didn’t stop there. She insisted that Cloud Top products also include such functional ingredients as Inulin (prebiotic fiber), Omega-3 DHA and Vitamin D.

“Cloud Top is frozen yogurt on ‘a higher level’ with its unique combination of premium quality ingredients and thoughtful nutrition enhancements,” she says. “We believe it presents a superior frozen yogurt product that delivers on both taste and functional nutrition.”

The product’s unique positioning reflects Kim’s personal and professional lives. The active mother of two young boys, this Los Angeles-area native often treated the family to tart frozen yogurt. Meanwhile, Kim was a national retail marketing manager for La Brea Bakery, Van Nuys, Calif.; and then a global brand manager for Herbalife International of America Inc., a Los Angeles-based nutrition and weight management products company.

When recent public debate began to grow about frozen yogurt’s better-for-you claims, Kim – the mom, consumer and food professional – says she started researching “to sift through the hype and qualify the information.”

“It was then that I realized there could be a viable market opportunity worth pursuing commercially,” she says. “My background in food marketing and product development really kicked into gear.” 

Kim learned, in part, that …

… U.S. tart frozen yogurt sales grew to $177 million in 2007 from $170 million the year before and they are projected to reach $200 million by 2012 (Source: Mintel)

… Organic food and ingredient sales in the foodservice segment represent one of the nation’s fastest-growing market segments. Sales have risen more than 20 percent per year since the 1990s. Frozen yogurt is one way operators can differentiate themselves and add organic menu options. (Source: USDA’s Economic Research Service)

… Chefs ranked organic food as third on a list of the top 20 important trends / items for 2007. Both fine-dining and casual and family dining operators also projected that organic foods would represent a larger portion of their 2007 sales (Source: National Restaurant Association’s 2007 Restaurant Industry Forecast).

Armed with those facts (and more), Kim says she worked with a food and beverage development consulting firm to create the proprietary organic and fortified frozen yogurt mix that she envisioned. Once they perfected the formula (after nearly a year), Kim selected a USDA-certified organic dairy to co-pack her product.

The dairy produces Cloud Top’s two mixes in small batches and packs them in half-gallon cartons with six cartons per case. Kim says the fresh liquid mixes are ready to use and require no further store-level mixing or adjustment.

“Something I’m very proud of is the fact that we took the time in creating a brand that was visually and thematically attractive,” she notes. “We also decided that even though our half-gallon cartons would never be seen by the direct consumer, it was still very important to us that the packaging looked special and branded.

“We wanted to make sure that whoever had their hands on our product could learn about our product’s special attributes and eventually spread that knowledge and information to their customers. We see it as a simple way of reinforcing key product highlights and educating operators along the way.” 

Cloud Top directly supplies a few end-user operators and ships to foodservice distributors. The distributors now represent Cloud Top more broadly to frozen yogurt shops, restaurants, schools and other institutional commissaries interested in organics.

Kim says the ATO show also helped connect Cloud Top to a major West Coast frozen yogurt / smoothie distributor who now handles the brand in nine western states. Looking forward, she says the company is pursuing southeast distribution as well as a direct supply relationship with an organic restaurant chain.
 
For her part, Kim says she is working on a flavor system with organic fruit flavor bottles that can be mixed with either of Cloud Top’s two base flavors.

“Our complementary organic flavor system will provide maximum flexibility and ease of use for the operator,” she notes. “Instead of ordering additional cases of half-gallon cartons – which they’ll have to store in their in-store freezer shelves – they can simply order our base flavors and the shelf-stable organic flavor bottles (as needed) to create different organic frozen yogurt flavors.”

For that matter, Kim admits that she’s still getting a taste for the flavor of running her own company.

“I’m constantly striving for ways to improve and grow our business and have had my share of discouraging moments along the way. That’s when I have to step back and remind myself of all that we have accomplished in a year and half,” she says. “We have developed a great, differentiated product that is on-trend with current and projected food trends; we have won industry recognition for our achievements in the form of a ‘Best New Product’ award. And we have signed with a major west coast distributor. Things are looking up for us.”

FAST FACTS
Cloud Top

Location: Pasadena, Calif.

Top executive(s): Kathy Kim, founder

Founded: 2007

Product line(s): Organic frozen yogurt mix

Brands: Cloud Top

Distribution: Nine western states

Web site: www.cloudtopyogurt.com