Grand project on pizza industry Essay
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Today, the average American eats 46 slices of pizza per year (about 23 pounds). Buck Jones reports “The business is only expected to grow as the industry continues to expand its product base and revenue earnings through imaginative recipes and creative marketing concepts” (Jones, 177). Pizza producers are searching for additional pizza products that will appeal to new markets such as the croissant, French bread, and other specialty products showing up today. Most new pizza products are marketed to adult consumers. Adults are targeted because they make up the majority of the lunch crowd and when they take their families out to dinner.
Pizza consumption has many different consumers: professional people during lunch, single parent families, two income families, children, high school/college age kids, singles, and more specifically, bachelors. As consumers age, their desire for pizza declines as noted by the survey. Women are generally targeted by pizza chains because they are usually the providers of meals for their families. Currently, pizza carryout represents 46% of all pizza transactions, and home and office delivery account for 26% of delivery. During the week however, Friday through Sunday account for 59% of pizza sales (R&I, 88).
On average, individual pizza sales are on the rise while the portions sold remain the same. Pizza comes in many different crusts and is sold in the following percentages: regular pizza 56. 8% of pizza sold, deep dish or pan pizza 17. 5%, thick crust 11. 0%, and extra-thin pizza 8. 5%. Overall, beverages were not purchased 52. 9% of the time and carbonated drinks were the majority sold with 31. 1%. Salad bars are surprisingly only seen in 3. 3% of pizza sales. These new products will expand the current pizza markets and increase the average consumption of current pizza users with their new product innovation.
Pizza toppings vary geographically based on current trends within a geographic region. Squid is Japan’s most popular pizza topping and tuna and corn rank high in England followed by Australia’s affinity for eggs as a pizza topping. The introduction of new pizza toppings has and will continue to be an avenue for increased revenues. Consumers are becoming more drawn to natural ingredients, natural restaurant environments, openness in food preparation, and the need to experience the food ethnically. Presently, newer competitors in the pizza arena are using wood-burning pizza ovens such as Macaroni Bar and Grill, Mario’s, and Carraba’s.
Consumers also prefer an open view of the pizza-making process. Pizza consumption has also increased through the distribution of direct mail coupons both locally and globally (R&I, 88). These coupons amounted to a 12% increase for pizza chain sales in 1996. Cici’s Pizza is presently the pizza segments value leader with their $2. 99 adult buffet ($1. 99 for kids). Many grocery retailers feel inadequately equipped to compete with the major pizza chains and therefore decide to just offer the products demanded.
Most retail operators have identified two markets and have created two different product lines for the high quality pizza connoisseur and the price conscious consumer. Another new market in the pizza industry is the selling of raw pizzas. Consumers call in and specify the pizza toppings they wish for their pizza at Papa Murphy’s. The consumer pays for the convenience of having someone else prepare their pizza and they get to eat it in the privacy of their own home. Future Consumption Trends Consumption is expected to increase in the future due to increases in population and consumers lack of time to prepare their own meals.
The pizza industry will continue to expand globally and tap into new pizza markets. This growth will spur on new changes in adapting their pizza product to their environment. Round Table Pizza is the nation’s fourth largest pizza chain and has 500 restaurants in the Western U. S. and internationally in six Asian countries and the Middle East (Round Table Pizza website. This is a clear example that U. S. companies have great potential in the global market and this can be achieved through adapted or standardized products, depending on the product and its industry.
Consumption is also going to move toward more natural, fresh, and healthier pizza products. A shift is under way in the industry away from product novelty to high quality ingredients and an emphasis on taste. Round Table Pizza promotes their “Honest Pizza” made from dough mixed from scratch, freshly grated cheese, and new sauce. Round Table Pizza also created the “Salute Veggie”, a pizza piled high with three different cheeses and various vegetables. The “Salute Veggie” reaches out to the vegetarian consumer who may have previously shied away from the pizza industry due to the meat content.
In response to Papa John’s fresher pizza promotions, Pizza Hut has reformulated its entire line, now including more toppings, thicker sauce, and a crunchier crust. Consumption will also increase through the addition of smaller pizza stores/stands that sell pizza by the slice. Although these are smaller sales transactions, they are on the rise as proven by Genuardi’s Family Market sales, which 75% of its sales are sold by the slice. Smaller Pizza Hut units are being placed inside Stop n’ Go stores that reach out directly to the consumer on the go.
These locations bring the product directly to the consumer they are targeting. On average, there lies the common belief that pizza consumption will increase as a consumer gets married and has children. This is rationalized through decreased time allowed to prepare meals with a family and a desire for easy meals that save time. Another factor is that children on the average like pizza. When an individual thinks of pizza, one conjures up thoughts of a late night at the office, slumber parties, quick lunch meal, “pizza parties” during the workday in an office, and children’s pizza parlors like Chuck E. Cheese.
Pizza generally summons feeling of “happiness” or “fun” and is also viewed as a “really quick meal. ” This is a major advantage for pizza chain retailers in that not many foods carry such ideologies or feelings. These connotations generally have to be marketed much like Chuck E. Cheese (fun & pizza) or Dominos (quick and delivered to your door). Over the next 5 to 10 years, there will be increases in consumption as a result of more single parent families and two income families. There will be an increase in the amount of women working to support their families and this will add to the need for easy to prepare or fast meals.
As single parents continue to work, attend night school, and raise their children they will continue to utilize pizza delivery services to compensate for their lack of time to prepare their children dinner. As the population increases, there will be significant increases in high school and college age kids that order pizza. Another relationship pizza has is with beer. It is very common for students to get their buddies and order pizza to eat while drinking their beer both while studying or partying.
Pizza chains should further investigate marketing their products in establishments that serve beer. Retailers could target clubs and sports bars to increase their market share. As consumers go about their daily tasks another market lies in drive-thru pizza restaurants. As people go about their day, pizza chain retailers could better serve some of its customers through drive-thru services. Over time, consumers will remain as busy as they are now and maybe even more so, some consumers could utilize these quick service establishments that allow them to enjoy pizza without having to stop to eat it.