Pizza Gets Personal

C-store retailers can expect to see continued growth in the pizza category in 2012.

“Pizza has good hold times, is a consumer favorite and is relatively easy to prepare. Sales will be up in 2012,” said Tim Powell, director for Chicago-based research firm Technomic.

Trends to watch in 2012 include an increase in take-and-bake pizzas, largely based on the use of third-party commissaries that make them more readily available. In fact, take-and-bake pizzas accounted for 12% of the $479 million dollars in pizza sales in 2011, according to Technomic.

Another trend to watch is the addition of countertop high-speed ovens like TurboChef. “While larger chains have been the primary users, I expect we’ll see this begin to filter down into the mid-tier stores as well,” Powell said. “High-speed ovens not only allow for quick pizza preparation, but for cross-utilization of other products. The more versatile the equipment, the more options operators have to expand their menus and compete with QSRs, supermarkets and now drug stores.”

Pizza Partners
Mike Barry, president of Pennington Convenience Stores in Thief River Falls, Min., runs Hot Stuff Pizza programs in his two stores and has seen customers gravitating toward personal-sized pizzas followed by large-sized pies.

“The No. 1 pizza for us is pepperoni followed closely by our breakfast pizzas—we feature a western omelet pizza and a Denver pizza with ham. Between the two, they produce 80% of our pizza sales,” Barry said.

Pennington stores also offer a 52-inch Big Stuff Pizza that feeds up to 20 people for special events. “That takes us 20 minutes to prepare and a half hour to bake, but it’s my novelty signature and what I call my ‘Wow’ factor. We price it at $39.99, which is really inexpensive compared to the time invested,” Barry said. “We don’t make a lot of money on it, but to me it’s an advertising tool.”

The tactic is working. Pizza sales at Pennington stores were up in 2011, and again in January and February of 2012, which Barry attributes to a warmer winter that has kept customers out and about more than usual.
Chad Prast, foodservice director at Village Pantry stores, also reported growth in boxed pizza sales for 2011.

Village Pantry operates 146 Village Pantry stores in the Midwest and features Hunt Brothers Pizza at 19 locations. The chain also rolled out take-and-bake pizzas in 2009 at 50 of its sites.

Like Pennington Stores, Village Pantry has seen growing demand for breakfast pizzas. “Breakfast pizza is one of our top-selling pizza slices and continues to grow,” Prast said

To further build sales, Village Pantry is adding incremental items to complement its pizza offering, including breadsticks and wings.

Fast Facts About Pizza

• A recent Technomic report shows pizza was a $479 million category in 2011, with take and bake making up about 12% of total sales. The entire pizza category is expected to grow by 6% through 2014.

• A recent report from Chicago-based research firm Mintel International shows that pizza restaurants are focusing on “value” in order to draw customers and with this strategy expect to see a modest 2.9% sales increase in 2012.

• In order to remain competitive, the average pizza price has remained fairly flat (up only 1%) over the past three years, according to Mintel.

• 67% of customers prefer pepperoni as their topping of choice, followed by mushrooms (53%), sausage (53%) and onions (41%), according to Mintel.

• By 2015, Mintel expects pizza sales to increase by 31%.

• Deli pizzas are trending toward smaller portions, artisan pizzas with regional and ethnic flavors and local produce for toppings. Whole grain crusts, as well as all-natural, organic, and vegetarian options are catering to the newly sophisticated American palette, according to IDDBA’s “What’s In Store 2012” report.

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