Surging Demand for Pizza

With so many national brands already well established in the marketplace, c-store retailers have to create a niche of their own by combining quality products and personal service.

By Marilyn Odesser-Torpey, Associate Editor.

Before the CENEX convenience store opened in Killdeer, N.D., the only pizzas readily available to the town’s residents were the ones in the local supermarket’s freezer case. Seeing an opportunity to establish itself as a store with a unique personality and focus on freshness, CENEX set out to introduce a baked-on-premise program, said franchise manager, Ann McKinney.

For ease of entry and brand name recognition, CENEX decided to go with a nationally-branded, licensed pizza program. But, while a turnkey program was the answer to ingredient accessibility and operational and marketing support that allowed the store to hit the ground running, the company wanted the freedom to have fun with its menu without being restricted by a litany of dos and don’ts and without foot-dragging approval processes by the licensor.

McKinney explained that one of the major reasons CENEX decided to partner with Piccadilly Circus Pizza was the company’s policy of allowing its licensees to come up with signature menu items to suit the sometimes quirky preferences of each marketplace and client base. As long as they use Piccadilly Circus products, the sky’s the limit as to what the CENEX chefs can put on their pies, she said.

“We’ve been known to come up with some pretty weird stuff, some of which would probably never work in other market areas,” McKinney noted. “But we know our customers and they love us for it.”

As one example, she cited a chicken, bacon and ranch dressing-topped pie that has become a customer favorite. Another, made with fajita-style chicken and bacon, was also well received. McKinney added that customers are also excited that the store allows to them to create their own pizzas for special order.

“With a supermarket frozen pizza, they would have to settle for what is available in the case or take the time to fuss with topping it themselves,” she said. “Here, all they have to do is ask for something and we do it for them.”

In addition to offering virtually unlimited variety, the hearty toppings offered at CENEX encourage customers to view their pizzas as a dinner meal replacement, as well as a by-the-slice snack. A pie topped with sausage, bacon, cheese and, if desired, pepper and onions has also made customers take a fresh look at breakfast.

Stronger Sales
According to a Technomic research company poll published last February, four out of 10 consumers said they are now eating pizza once a week. That’s up from just a little more than a quarter two years ago. Technomic attributed much of this increased consumption to the revamping of menus to include more specialty pizza and gourmet ingredients.

The Technomic report went on to note that 68% of consumers now order carryout pizza once a month or more. Thirty-seven percent of them said they order carryout from non-pizza limited-service and fast-casual restaurants once a month.

A survey published this year by Chicago-based research firm Mintel International revealed that variety was one of the four most important factors for choosing a pizza restaurant for the more than 80% of consumers who purchased pizza from a restaurant in past month. Equally important were convenient location, price and speed of service.

Meeting Consumer Demands
At Kwik Trip Inc. it all adds up to take-and-bake, which Technomic agreed is an increasingly popular category segment, as long as the product is high quality. Upscale is how Paul Servais, retail foodservice director for the more than 350-unit, La Crosse, Wis.-based Kwik Trip chain, described its proprietary, fresh, refrigerated Cheese Mountain-branded pie. The company also offers a frozen economy-priced pizza under its Urge brand.

Cheese Mountain is the chain’s first foray into the home meal replacement arena.

“It’s our answer to Papa Murphy’s Take ‘N’ Bake, which is very popular around here,” Servais said.

But Kwik Trip has other things that Papa Murphy’s does not, Servais noted.

“We have many more stores than Papa Murphy’s; in fact, we’re on just about every corner,” he said. “And we’re an established destination for gas, lottery tickets and cigarettes, so customers are already here.”

Kwik Trip also gives customers the opportunity to round out their meal with salads, sides and desserts, as well as to pick up snacks and other items they may have on the shopping list.

“Papa Murphy’s just has pizza and a few sides,” Servais said.

Larry Miller, president of Miller Management & Consulting Services, which specializes in foodservice and c-store management, said that while today’s retailers can have an extremely hard time trying to compete with national giants such as Pizza Hut and Papa John’s—even Costco and Sam’s Club are now grabbing a piece of the pie—a solid proprietary program can help make a c-store a hometown hero. That is, if the retailer is willing and able to really commit to the program.

Rutter’s Farm Stores, for example, initially partnered with a national brand, but felt stifled by menu limitations and other restrictions.

“We were frustrated because we couldn’t always offer the items that the brand advertised on television,” said Jerry Weiner, vice president of foodservice for the 57-store chain in York, Pa. “Our customers were frustrated as well because many times we just couldn’t give them what they wanted.”

Although customers liked the national brand product well enough, Rutter’s management thought the chain could further enhance its fresh foodservice category and strengthen its relationship with customers by launching a program of its own. This proprietary program was designed to allow Rutter’s to highlight specific market-centric flavor profiles and highlight the company’s signature personal service.

“We wanted to start with the basics—right down to the dough, sauce and even the cheese—and make them our own,” Weiner said. “Our pizza segment had to reflect our dedication to foodservice with products customers won’t be able to find anywhere else.”

Weiner emphasized he has nothing against national brands.

“I think many of them make excellent products that can work very well for other c-stores,” he said. “But we have worked hard to establish a special niche for our own brand.”

At $5.29 per pie ($5.79 with pepperoni), Weiner said he believes Rutter’s hot-to-go pizza program has also helped to enhance customer perception of the store as a go-to place for high value home replacement meals. Like Kwik Trip, Rutter’s is also tapping into the take-and-bake trend by offering a refrigerated pre-proofed crust topped with cheese and sauce or cheese, sauce and pepperoni.

When it comes to pizza, as well as other foodservice, one size does not fit all retailers or markets, Miller said. For generations, just about every neighborhood had at least one favorite mom and pop pizza place. Now, with the big brands dominating the market, most of those neighborhood spots have gone away in most parts of the country.

“C-stores have an opportunity to give customers the best of both worlds, the consistent quality they would expect from a big brand, along with personal service, including menu options created specifically for them,” Miller said.

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