Pizza Powered Through the Pandemic Some may argue

Pizza Powered Through the Pandemic § Some may argue pizza is the ultimate comfort food, but, according to a March 2020 survey from research firm Datassential, pizza was consumers’ first choice when they had to stay at home during the early-pandemic period. § Data from another market research company, Sense 360, clearly indicated pizza chains were the early survivors of the pandemic, as March sales only decreased 5%, compared to 20% for all quick-service restaurants and -33% for the fastcasual sector. § Fast-forward to November when Black Box Intelligence reported a 10. 3% decrease in same-store sales for all US restaurants; however, the good news for the pizza sector was consumers said their best food experience was with pizza.

Pandemic Casualties § CHD Expert reported 43, 836 US restaurants closed during the first three quarters of 2020. Many were small, local restaurants, including many pizzerias. According to Kalinowski Equity Research, 7. 5% of independent, momand-pop restaurants will close during 2020. § Several chains also suffered, such as California Pizza Kitchen, which filed for bankruptcy during July, but couldn’t interest any bidders during an October auction; however, the chain emerged from its bankruptcy during November. § During Q 3, Pizza Hut closed 672 restaurants because of the bankruptcy of NPC International Inc. , its largest franchisee, which was planning to buy those locations as well as hundreds of Wendy’s locations.

Major Pizza Players Enjoy Sales Increases § Because the major pizza chains have been developing their delivery model for years, they were better positioned to withstand the negative effects of the pandemic. For example, Domino’s Q 1 2020 same-store sales increased 1. 6%, and then +7. 1% for Q 2. § Papa John’s performance has been even better. North American Q 1 same-store sales increased 5. 3%, exploded to +28. 0% during Q 2 continued the record performance, with a 23. 8% increase during Q 3 for North American same -store sales. § Pizza Hut’s Q 1 2020 same-store US sales decreased 7. 0%, but increased 5. 0% for Q 2 and another +6. 0% for Q 3. A positive trend for Pizza Hut is the pandemic helped improve its delivery business as it continues to pivot from a dine-in pizzeria.

Pizza Patron Profile § According to The Media Audit 60 -Market 2020 Aggregate Survey, most of which were conducted during the pandemic, 20. 3% of all adults 18+ said they had eaten at any pizza restaurant during the past 4 weeks, and 23. 5% were 18– 49, compared to 16. 2% 50+. § That statistics don’t include the many children and teens who love pizza. Changing the base to adults with children at home age 6– 12 increases the total target of families to 28. 1%, and 28. 4% for children at home age 13– 17. § In the adults 18+ demographic, African Americans and Latinx Americans ate at any pizza restaurant during the past 4 weeks 24% and 38% more than Caucasian Americans, and for adults 18– 49, 12% and 21% more, respectively.

Plant-Based Pizza Trends § According to a 2020 poll from One. Poll and Eat Just, Inc. , 60% of Americans are eating more plant-based foods during the pandemic and young adults are leading the trend with 39% of those 18– 25 and 23% of those 26– 41 having eliminated animal products from their diets. § This trend has resulted in major pizza chains introducing plant-based pizza choices, such as Pizza Hut’s partnership with Beyond Meat to include the Beyond Italian Sausage Pizza and the Great Beyond Pizza on the menus of all Pizza Hut locations. § Papa Murphy’s and Hormel, with its Happy Little Plants pepperoni-style topping, added the plant-based option to selected locations during September. Smaller chains, such as Fresh Brothers and Toppers Pizza, have also responded to the plant-based food trend.

More Technology for Future Success § Ghost kitchens, of which approximately 1, 500 are operating in the US, became a pandemic option for many restaurants and pizzerias. Chef. Ready is pioneering another ghost-kitchen technology: a customizable, single facility with 10 ghost kitchen spaces. § Although drone and autonomous-vehicle technologies to deliver pizza are still in development, independent pizzerias that maintain an awareness of these technologies and have a plan to use them will have an advantage when they enter the mainstream. § More restaurants of the future, including pizzerias, may become modular units with smaller footprints. They will emphasize delivery, takeout, drive-thru and mobile units to serve the increasing number of consumers who prefer offpremise purchases.

Advertising Strategies § Although the pandemic caused many independent pizzerias to close, those that remain will be positioned to maintain and even expand their customer base with aggressive advertising of their delivery and takeout services and special discounts as the pandemic abates. § As many people and families will be stuck at home until the COVID-19 vaccines are widely administered, pizzerias should continue to promote family/group meals/packages. § With many people participating in outdoor activities as pandemic panaceas, pizzerias, which already deliver to outdoor locations, may want to partner with hobby and/or sporting goods stores to offer a coupon for outdoor equipment/games with a qualifying pizza purchase.

New Media Strategies § Use social media to conduct a survey asking visitors what kind of special pizza they would order to celebrate the end of the pandemic. Ask everyone to vote for their favorite, which will be added to the menu at the appropriate time and provide all with a digital coupon. § The era of the plant-based pizza has begun. Pizzerias can use social media to explain how they are using plant-based meat substitutes and their reduced fat content and promote them with digital coupons targeting young adults. § Ask visitors/customers of social media platforms to express their interest in having their pizzas delivered by drone and/or autonomous vehicles. Pizzerias can also share content about the development of these technologies.