US pizza chains are enjoying a resurgence in consumption, thanks to answering nationwide calls for quality and uniqueness says Darren Tristano of Technomic
Following a dip several years ago, reported pizza consumption is at its highest level in the past four years in the US, according to Technomic’s 2016 Pizza Consumer Trend Report. Quick-service, fast-casual and full-service pizza chains are increasing turnover by catering to distinct occasions and carving their own niches. Fast casual in particular is a bright spot in the segment, gaining ground in a short amount of time and attracting investors to continue growth. As fast-casual chains become more significant players in the pizza space, menu innovation that caters to demands for quality and uniqueness will be crucial in the quest for capturing consumers.
Fast casual continues growth trajectory
Fast-casual concepts have experienced growth for several years now, and fast-casual pizza has seen even greater success: the segment increased turnover by 22% and store count by 27% in 2014 – more than any other category. In years to come, we expect to see more of these brands join the list of the Top 500 chains ranked by turnover, and some may even overtake spots previously held by quick-service chains. Patrons crave the build-your-own service format that is a mainstay at most fast-casual pizza chains; 44% of consumers say they order pizza from a certain location because they can customise their pizza there. Younger consumers, in particular, are impelling this trend: about 45% of 18 to 34-year-olds wish there were more fast-casual pizza restaurants offering build-your-own pizzas near them.
Investors are taking notice and financing emerging pizza players to aid expansion. In 2015, Blaze Pizza grew more than 200% in turnover, opened its 100th unit and expanded into Canada. The chain also has NBA basketball star LeBron James, who reportedly owns at least 10% of Blaze Pizza, as brand ambassador. Blaze anticipates an initial public offering in the coming years. California-based Pizza Studio more than doubled its US turnover in 2015; late in the year, the chain received an undisclosed investment led by foodservice contractor Thompson Hospitality.
We’re also beginning to see these chains move into non-traditional spaces, such as recreational venues and airports. Universal Studios at Universal Orlando Resort was one of the first recreational venues to house a fast-casual pizza concept when it opened a Red Oven Pizza Bakery in the park’s CityWalk area. Last year, Pizza Fusion entered into a National Test License Agreement with foodservice provider Aramark, which now has the rights to operate Pizza Fusion units within the US. The new Pizza Fusion sites in Aramark’s network may include locations such as colleges, universities, healthcare facilities and sports and entertainment venues.
Healthy, authentic and transparent ingredients
Limited-service pizza chains are increasing efforts to meet consumer calls for transparent sourcing and food with fewer artificial ingredients, as well as catering to special diets. More than half (58%) of consumers say they would like foodservice locations to offer all-natural pizza. In the past two years, a number of quick-service and fast-casual chains have announced the removal of additives, antibiotics and artificial flavours and colours from their pizzas. In January, Papa John’s removed artificial flavours and colours from its menu and announced plans to use antibiotic-free chicken in toppings and its Chicken Poppers by summer 2016. Late last year, Blaze Pizza removed nitrites from its pepperoni, salami, ham and bacon, and, this year, the chain aims to remove all additives from its olives, salad dressings and blood orange lemonade so that all of its pizza and salad ingredients are additive-free.
Many limited-service pizza chains are also adding gluten-free pizza dough. Jet’s Pizza recently launched a gluten-free crust, joining Papa Murphy’s and Pizza Hut, which began offering gluten-free pizza at certain sites last year. Younger consumers, 37% of whom would like more gluten-free pizza on menus, are behind the demand for gluten-free options.
Vegan cheese options are one area of opportunity for limited-service pizza chains – particularly in the quick-service sector. While several fast-casual chains, including Pieology Pizzeria, PizzaRev and Pizza Studio offer vegan cheese – vegan pizza cheese is still largely missing from quick-service pizza menus. According to Technomic MenuMonitor data, fewer than 10% of quick-service restaurant (QSR) pizza chains offer vegan cheese, despite research that shows 30% of 18 to 34-year-olds say they would like foodservice locations to offer this option for pizza. Expect several leading QSR chains to launch a vegan cheese option in the near future.
Innovation on the menu
Beyond build-your-own formats and ingredient sourcing, pizza chains are offering innovative pizzas and add-ons to entice consumers. Spicy flavours are arguably the biggest menu trend at pizza chains, and fast-casual and quick-service chains are leading flavour innovation, with hot pizza ingredients and flavour drizzles. Spicy red sauces will emerge at chains, along with hot seasonings such as Cajun and condiments like giardiniera. Men, in particular, are interested in spicy pizzas, according to Technomic data. On the horizon are bold and spicy drizzles, such as Sriracha, harissa and a variety of hot sauces. Hot Stuff Pizza recently offered its Spicy Chipotle Handcrafted Pizza with pepperoni, sausage, spicy chipotle sauce and jalapeños. For a limited time, Stevi B’s The Ultimate Pizza Buffet added the Sriracha Alfredo Chicken and Bacon pizza with Sriracha-Alfredo sauce, mozzarella, chicken, bacon and Sriracha sauce drizzled on top.
Some pizza chain patrons are also showing interest in pizza for breakfast. More than one quarter of 18 to 34-year-olds say they would likely order pizza for breakfast or brunch if it was offered. Overall, consumers expressed interest in breakfast items such as pizza toppings, including bacon (57%), eggs (15% of younger consumers), ham (46%), pork sausage (48%), and potato (14% of younger consumers). We predict that full-service pizza chains will develop brunch-themed pizzas for all day parts, and some may even test weekend brunch. Brunch pizzas could include varieties such as eggs Benedict; chorizo and potato; scrambled egg and Sriracha; ham and duck egg; and pancetta and cheese. As part of its autumn seasonal menu in 2015, California Pizza Kitchen added a Sunny Side Up Bacon + Potato Pizza with shaved fingerling potatoes, applewood-smoked bacon, caramelised leeks, Parmesan, mozzarella and black pepper on pizza dough, topped with two sunny-side-up eggs.
Many pizza chains are expanding their menus beyond pizza to differentiate. Sides, starters and beverages play an important role for many pizza occasions, especially among younger, more social consumers. These patrons drive demand for more non-pizza items at pizza establishments; in particular, this demographic leads interest in chicken wings, chips and pasta. But more healthful sides can help operators appeal to health-conscious consumers, as they seek to balance their indulgences with healthy dishes. Pizza chain Uncle Maddio’s rolled out a Thai Tastic Salad featuring mixed greens, grilled chicken, red onions, purple cabbage, peanuts, house-made Thai peanut sauce and honey-Sriracha dressing.
Staying ahead in a crowded space
To maintain the momentum of greater pizza consumption, operators must innovate and adapt to consumers’ demands for unique, high-quality and better-for-you pizza ingredients and add-ons. As competition between fast-casual and quick-service pizza increases, these segments can drive sales with transparency-focused initiatives, from removing additives from ingredients to offering more farm-fresh fare. Some operators will also need to promote differentiated and unique menu offerings to stay ahead in the increasingly crowded pizza space.
■ Darren Tristano is president at Technomic Inc, a Chicago-based foodservice consultancy and research firm owned by Winsight. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations. For more information, visit www.technomic.com.
