Pizza remains among one of the most demanded foodservice options anywhere in the country. But it’s also one of the most competitive menu options. Customers are demanding high quality toppings and more exciting varieties in their pizza pies, as well as value-driven add-ons, such as beverages and side dishes that can complete a meal. Moving into 2014, convenience stores can expect increased competition from fast casual restaurants selling customizable pizzas and pizzerias attracting customers with craft beer options.
Chicago-based research firm Mintel International found in a recent study that the pizza restaurant market in the U.S. grew throughout the recession and is continuing to gain momentum. Pizza restaurant sales grew 10% from 2007 to 2011, and a growth of 16.7% is predicted from 2012 to 2017, reaching a projected $44 billion in 2017.
C-stores have ample opportunity to cash in on pizza’s popularity and take advantage of pizza trends coming out of other channels, from bundling beer and pizza to featuring more gourmet toppings and themed pizza options.
Italian Meats Pizza
Wade Mannino, president of Patoka Fast Stops in Patoka, Ill., and Stop and Go Marts in Marine, Ill., has been partnering with Hunt Brothers Pizza since 1996. He is seeing the latest trends in pizza first hand. “Customers are looking for specialty pizzas and add-ons—like bread sticks, chicken wings or calzones—anything they can add on to the pizza order,” he said.
Mannino’s stores witnessed customer excitement from the introduction of Hunt Brothers’ new Italian Meats Pizza (pictured above), which brought a bump in pizza sales with its debut during a test market launch earlier this year. “Anything new here sells,” Mannino said, noting that his stores offer all of the limited time only (LTO) pizzas, such as the Buffalo Chicken pizza, that Hunt Brothers offers to keep customer interest high year round.
The Italian Meats pizza uses Hunt Brothers’ original rising fresh crust, topped with a signature sauce, layered with slices of Italian-style ham, salami, pepperoni and 100% mozzarella cheese.
According to a recent Mintel report (see sidebar), pepperoni and sausage are the two most popular toppings. The Hunt Brothers’ varieties were tested in the Dallas and St. Louis markets (which includes Illinois) from Aug. 18 to Oct. 14, and rolls out nationwide this month. When introducing meat topping pizzas, c-stores often struggle with a low quality perception, but by elevating the quality of the meat and product, c-stores can not only increase price, but can break through that perception and increase sales, said Darren Tristano, executive vice president, for the Chicago-based research firm Technomic Inc.
“Customers like the Italian Meats pizza because it’s new and it’s more of a premium product,” Mannino said.
Just as important, the pizzas are delivered with all the toppings already in place, making it easy for employees to prepare. “All you have to do is add the seasonings and spices they use, and if the customer wants double cheese then you’d add the double cheese to that,” Mannino said.
Gier Oil Co., with 37 Eagle Stop Convenience Stores in Missouri, also partners with Hunt Brothers Pizza at a number of its locations.
Bethany Poe, operations supervisor for eight Eagle Stop stores, six of which offer the Hunt Brothers program, said her customers are also looking for variation, and are attracted by limited time offers. “Customers miss the LTOS when they are taken off the menu, but then they’re excited when they bring them back a few months later,” she said.
Poe’s stores also tested the Italian Meats pizza during the pilot period. “Some of our stores are in rural areas, and it’s especially beneficial to try to do something different in these locations to change up the offering for the customers,” she said. “With the Hunt Brothers offering, we have the option of selecting the pizzas we want to offer, but we normally go with what Hunt Brothers recommends to stay competitive with the other stores,” she noted.
Technomic found that when it comes to flavors, themed pizzas continue to trend, especially at the c-store level. “The Buffalo chicken pizza is popular because it has the protein—chicken—but also the Buffalo sauce that’s going to give it some spiciness, which customers love,” Tristano noted.
Hawaiian pizza—with ham and pineapple— is another example of a popular themed pizza. Themed pizzas are gaining traction because customers don’t have to decide what topping to add. “This is something that can be picked up by c-stores and leveraged as an opportunity to sell more pizza,” Tristano said.
When selecting a variety of themed pizzas it’s important to note that an increasing subset of the Millennial generation identifies as vegan, vegetarian or flexitarian (vegetarian most of the time but sometimes eats meat), making it wise to offer a non-meat pizza option alongside a meat-eaters option to capture customers in this demographic, Tristano noted.
Tristano pointed to two overarching trends set to impact pizza in 2014: the pizza pub concept of pairing pizza and alcohol together, and customizable pizza pies, made exactly how the customer desires.
Better fast casual pizza concepts are a key trend now emerging—not only on a regional basis—but soon to hit the national landscape as they gain momentum and capital for growth.
“In California, Blaze Pizza and Pieology are examples of concepts doing something similar to what Chipotle does. You pick a pizza they have or customize it as you interact with the person preparing the pizza,” Tristano said. “What these brands are doing is taking advantage of customization and speed, while leveraging quality and premium ingredients and flavors, which are all on target with what consumers are looking for from the pizza segment.”
Better With Beer
Craft beer is trending with both men and women—and especially with Millennial consumers. Pizzerias are tapping into this demand, showcasing an array of craft, domestic and premium beers alongside their pizza offerings.
“To some extent you have this already in a c-store, most of which sell beer,” Tristano said. “A lot of times a pizzeria isn’t going to have the same beer selection as you can find at a c-store, making this an opportunity for c-store retailers.”
Technomic consumer research shows customers continue to demand premium high quality toppings and convenience, and proximity and convenient location weigh as key factors in customer intent to purchase.
“That’s something c-stores have an incredible advantage with, not just because of the number of locations, but the ease of going in and out, parking and the ability to pick up other items, such as pop, candy snacks and desserts,” Tristano said.
Convenience stores that currently serve pizza can boost sales by making it easy for customers to select the types of items usually purchased with pizza. That could be chicken wings, but more likely it’s desserts, snacks and beverages—including beer—that can be offered as a bundle deal or simply merchandised nearby.
Chicago-based research firm Mintel International, recently polled consumers to discover the hottest pizza toppings. Pepperoni took the lead (65%), followed by sausage (54%) and mushroom (51%). Other winners included extra cheese (45%), onion (39%), green pepper (37%), olive (34%), bacon (31%), ham (29%) and pineapple (21%).
Men are much more likely than women to order bacon-topped pies (38% of men versus 24% of women), sausage (60% to 48%), pepperoni (71% to 60%), and ham pizzas (34% to 25%).
Age also impacts topping preferences. Those 18-24 prefer bacon-topped pizza (40% versus 31% on average), extra cheese (54% to 45%), ham (36% to 29%), and pineapple (26% to 21%).