Thursday, May 19, 2022
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Entrepreneur in the making: Junior finance major to start frozen yogurt business in Ecuador

The Quitocentro mall in Quito, Ecuador, will be one of two initial kiosk locations for Andres Rivera’s frozen yogurt enterprise.
The Quitocentro mall in Quito, Ecuador, will be one of two initial kiosk locations for Andres Rivera’s frozen yogurt enterprise.

Andres Rivera’s ambitious personality could be seen at an early age.

The junior finance major moved to the U.S. from Quito, Ecuador at age four, but has remained in contact with friends and relatives back home. His twice-a-year visits during summer and winter break allow him to experience the best of both cultures.

An honor student, athlete and entrepreneur in the making, he hopes to make his first fortune at an early age with YO-GU, a frozen yogurt business concept he created that will soon open in his hometown of Quito. It combines months of research in the Bloch School’s Entrepreneurship Scholars (E-Scholars) Program with a lifelong experience in both cultures.

He became a fan of frozen yogurt as a kid.

“There was a TCBY in Prairie Village where I used to live,” he said. “My dad would always take me there after playing tennis.”

When he arrived at UMKC in fall 2010, he took a liking to Red Mango’s self-service frozen yogurt format, which allowed customers to mix flavors and toppings and pay by the ounce. It was faster and easier than ordering off a menu at TCBY, Rivera said.

In Quito, which saw its first frozen yogurt franchise open recently, Rivera saw potential to enter a new market.

With a metro population of 2.5 million, Quito is Ecuador’s second-largest city and capital. It became UNESCO’s first World Heritage Site 32 years ago, and is acclaimed for its elaborate Spanish colonial architecture, which predates nearly every American city.

“Quito’s more fast-paced and family-oriented [than Kansas City],” Rivera said. “It’s beautiful. Some of the old churches were built with gold from Spain.”

Its temperate climate, between 60 and 85 degrees Fahrenheit, is ideal for refreshing frozen treats.

In mid-August, Rivera plans to open two self-service mall kiosk locations, each with three self-serve machines.

A junior studying finance, Rivera has used his experience in the E-Scholars Program to incorporate a competitive grab strategy into his business plan.
A junior studying finance, Rivera has used his experience in the E-Scholars Program to incorporate a competitive grab strategy into his business plan.

The kiosks will offer 20 toppings and will combine 12 traditional flavors with six rotating seasonal flavors and three uniquely Ecuadorian tropical fruit flavors: Naranjilla, Guanabana and Guayaba.

Rivera said the custom-ordered, self-serve machines will allow customers to combine as many flavors as they desire.

At $.40/ounce, Rivera is confident his frozen yogurt will sell.

That’s the price at which most U.S. franchises sell yogurt, as well as the price of his local competitor, Yogurt de la Amazonas.

In the U.S., frozen yogurt stores average $275,000 in gross sales and $45,000 in profit per location each year.With significant savings on labor and product costs in Ecuador, Rivera expects his business to be even more lucrative than U.S. ventures, which also face more cutthroat competition in a well-established national market.

Rivera’s months of extensive research were a collaborative effort with cousins in Ecuador. Together, they collected data on pricing, suppliers, competition and the Ecuadorian tax and legal systems.

“I went there during winter break and looked at all of the competitors, including ice cream shops,” Rivera said. “I paid careful attention to the frozen yogurt franchises when I went there and carefully observed the customers’ buying behavior.”

Rivera said his E-Scholar mentors, Tom Boozer and Becky Sandring, encouraged him to see the larger picture and pursue an aggressive ‘grab strategy.’

“They told me how to take a small idea and turn it into a big one,” he said. “In my case, this could be an industry leader.”

Once his concept catches on, he hopes to expand to three other Ecuadorian cities (Guayaquil, Cuenca and Salinas Beach) with market penetration in South America as his ultimate goal.

“It [YO-GU] would not be the idea it was without the [E-Scholars] Program,” Rivera said. “The program helped me achieve the goal of a franchise operation in all of South America in five years.”

His wouldn’t be the first ambitious enterprise to achieve rapid growth in South America.

Juan Valdez Café, a Colombian coffee shop and proven industry grabber, opened 18 Ecuadorian locations in only two years.

While much of the financing will come from family members, Rivera is also pursuing funds from the E-Scholars program and angel investors.

He is currently pursuing other funding sources to expand the concept.

“This is not the first business I want to start,” Rivera said. “My inspiration comes from my dad’s work in different industries and my grandfather’s work as an attorney and a business executive.”

His parents are enthusiastic about their son’s ambitions.

“It’s a great experience for him,” mother Ana Hurtado said of her son’s plans. “It’s great that he is studying and using the skills he learned in a real world experience.”

Sharing her son’s entrepreneurial knack, Hurtado started her own deli business at age 23, but later left Ecuador to study and work in the U.S.

“This is why I am encouraging my 19-year-old son to start the business and grow it,” she said.

Luis Rivera, whom his son described as a key role model, said that his son reminds him of himself growing up.

“I thought the same way as Andres,” he said. “We shared the same ideas and sought the same opportunities. I also wanted to start my own business.”

Luis Rivera said he is pleased with his son’s progress.

“I think he’s doing great and is going to make success his No. 1 goal no matter what,” he said. “He has to follow his dreams, and those dreams are going to come true someday no matter what.”

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