Pizza Popularity Drives Food Sales

Some version of pizza has been around ever since a working man in Ancient Greece discovered that a flat round bread (plankuntos) embellished with assorted toppings made a hearty, thrifty and convenient dining experience. Little did that anonymous cook suspect that his humble meal would one day launch a major industry.

According to Blumenfeld and Associates, a New York-area public relations agency, pizza has grown into a $30 billion industry, with approximately 3 billion pies sold in the U.S. annually. Opportunities to enjoy pizza are endless. Consumers can choose from boxed pizzas in their grocer’s frozen food case, fresh take-and-bake pizzas or heat-at-home to single-slice servings,  eat-on-the-go or family-size pies served at sit-down restaurants.

Pizza People Speak Out
Steve Green, publisher of Pizza Quarterly Magazine conducts regular surveys of people in the pizza business to see how the industry is faring. According to its 2009 survey of pizza retailers, 43% of respondents have seen the most growth in their business during the past year in take-out pizza, and  24% reported an increased demand for gourmet toppings. In terms of ingredients, 80% said they make their own dough, while 10% opt for frozen dough. When it comes to coupons, 42% use them to stimulate business, but only “moderately.”

As for the current recession, 40% reported that business is up compared to 2008, 32% said business was decreasing and 28% said it was the same.

Proprietary Pizza
One of the longest running and most successful c- store pizza programs belongs to Casey’s General Stores, the Ankeny, Iowa-based chain with almost 1,500 locations across the Midwest.

Casey’s first began serving customers made-from-scratch pizzas in 1981. “It’s a proprietary prepared food program,” said William J. Walljasper, senior vice president and CFO of the chain. “It does really well. We’re among the top pizza retailers in the nation.”

Customers can choose from traditional pepperoni and hamburger pizzas or go for something more unique, such as the bacon-cheeseburger or taco pizza, in small, medium or large sizes. Beginning at 6 a.m. daily, customers can order breakfast pizzas in many combinations of eggs, cheese, sausage and bacon on the same crust used for all Casey’s pies. “Some people even order a vegetable breakfast pizza,” Walljasper said.

A key ingredient of the Casey’s program is the homemade dough, which is not tossed, but run through a dough roller to create the properly sized pizza base. “Few convenience stores offer customers handmade pizzas,” said PQM’s Green. “I’ve seen some that do, but most use pre-formed pizzas.”

Is frozen dough inferior to a product made from scratch? “I’d say yes, personally, but there are probably people who’d disagree with me,” he said. “I’ve seen frozen crusts win pizza contests. It comes down to what your customers want most.”

Pizza Pies Plus

Officials at 7-Eleven don’t see pizza as a standalone food offering, but as part of a comprehensive hot foods program that includes chicken tenders, BBQ and Asian-style wings, spicy wings, soft pretzels and potato wedges.

“These are popular foods that our customers want to pick up hot while they’re and on the go,” said Jolie Lawrence, category manager for 7-Eleven. “It’s a great menu that is ubiquitous in its popularity among many customer groups, so we are seeing a good mix of males, females and kids (buying them).”

7-Eleven pizza is created from a proprietary recipe developed by the company’s research and development chefs and produced by Great Kitchens, a large private-label food manufacturer in Romeoville, Ill. There are two flavors—pepperoni and deluxe four-cheese—and customers can take home a whole pizza or purchase just a slice.

“We also offer meal deals such as pizza and soft drinks or multi-packs for parties or tailgating with pizza and wings,” Lawrence said.

Pizza Partners
Developing a proprietary pizza program is daunting for even the most daring retailers, so the majority team up with a company that offers a turn-key operation. One of those is Kim Doyle of Vergas, Minn., who with her dad, Denny Iverson, operates Vergas 66 convenience stores. Along with bait, propane and typical c-store items, the father-daughter team sells pizza from Hot Stuff Foods. Vergas 66 had a pizza program prior to adding Hot Stuff to the store’s deli menu a year ago. “But this is a better program,” Doyle said of Hot Stuff. “They have the food costs all figured out.”

Doyle owned existing pizza production equipment and bought used equipment from other sources. Although Hot Stuff is a franchise system, “they were fine with this,” she said. “They are geared toward smaller operations.”

Hot Stuff provides training, marketing and operational support, along with all pizza-making products. The company sends the store frozen dough discs that have a two-and-a-half-day shelf life once they are thawed in a refrigerator. Then the disc is heated and shaped in a dough press. It is about eight minutes from taking the customer’s order until the pizza is served. “We use a higher speed, higher heat oven,” Doyle said of her Turbo Chef.

The store also has a warmer. “At lunch, we might put 10 or 12 (prepared) pizzas in it,” Doyle said, adding that she began offering take-and-bake pizzas last winter and that has grown to be 15% of her total pizza business.

Shoppers also can custom order pizza, and Doyle’s staff will do their best to prepare it. Not long ago, she admits, they turned down a request to make a peanut butter and jelly pizza.

Customers Demand It
Seth Kahn, owner of Darla-K Food Marts in Cameron, La., didn’t plan to add pizza to his foodservice program, but “customers demanded it,” he said.

A store owner for 20 years, Kahn sold cold sandwiches and provided microwaves, but customers said they wanted something hot—something like pizza. So he signed up with Hunt Brothers Pizza and “it did great,” he said of the program. “We immediately started selling 150 pizzas a day.”

Hunt provided all equipment, point-of-sale (POS) materials and staff training, but did not charge franchise or royalty fees. The company offers typical topping combinations, but comes up with seasonal specialties, such as Buffalo chicken pizza, a product that was on Kahn’s menu for three months. “People still ask for it,” he said.

Although Kahn owns two stores, he is not able to get the Hunt Brothers program at his second location because Hunt ensures exclusive territories, and his second store is a mile from an existing distributor. Does his pizza-selling store do better than his non-pizza store? “Of course,” Kahn said.

According to Convenience Store Decisions’ 2009 Brand Preference Study, Hunt Brothers and Hot Stuff Foods were Top Performers in the category. Popular industry brand, Piccadilly Circus Pizza, received  an honorable mention.

Green of PQM said retailers can expect pizza to continue to be an American staple and, thanks to technology, the ability to produce piping hot pies will become easier and faster.

“Pizza prep is getting better with self-rising crusts and more shortcuts,” he said. “There are better heating systems, display cases and assembly line processes. Plus, pizza is a good wholesome four-food-group product. We can’t help that it tastes so good.” CSD

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