Pizza Power 2013 State of the Industry Report
Make plans for 2013 with PMQ’s report on the pizza industry—both domestic and worldwide—along with a forecast for the coming year.
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It’s time again for PMQ’s yearly wrap-up of the state of the industry as well as our forecast for 2013. Each year since it began in 2000, our goal has been to continually enhance this annual report. This time around, in addition to data from key industry sources such as Technomic, Mintel, the National Restaurant Association (NRA), our annual Pizza Industry Census, CHD Expert and IBISWorldwide, we’ve also included information about international pizza growth, thanks to Euromonitor International and the editors at FoodService Europe & Middle East.
In addition to numerical data, you’ll find an overview of major food trends from and consumer opinions about the restaurant industry as a whole. Bring out this report any time you’re strategizing marketing projects, planning new menus or considering franchising.
Understanding the Numbers
To determine industry figures for this report, overall sales and store counts were provided by CHD Expert, which obtains its data from more than 80 sources, including Web, government and online listings. Technomic provided sales and unit information on the Top 50 Chains.
Before we get into the data, it’s important to note that last year’s report covered a period from January 2010 to December 2010, while this year’s report covers the year ending September 2012, providing a more current read of where the industry stands in store counts and sales.
An Industry On the Rise
Data gathered from all sources this year points to an industry that continues to grow at a rate of just about 1.6%. This is in line with the growth rate of the restaurant industry as a whole, which was projected by the NRA to rise by more than 3% in 2012 to $632 billion. This is the third consecutive year that sales have increased for the restaurant industry. The industry also continues to outpace overall U.S. job growth at a rate of two to one, according to the NRA, further suggesting a growing industry. And PMQ’s recent reader census shows that more than 60% of pizzeria operators report increasing sales over the previous year. All signs point to a continuing recovery from the recession for the foreseeable future.
Sales and Store Counts
New data provided by CHD Expert shows this year’s industry sales for the period ending September 2012 to be $36,786,524,044 and the total pizzeria store count for September 2012 to be 71,856.
For the period ending September 2012, the average per-unit sales for all U.S. pizzerias (chains and independents combined) equaled $511,948. The Top 50 chains’ per-unit sales numbers decreased slightly, from $661,053 in 2010 to $653,859 in 2011.
For this year’s report, we’re able to provide a more detailed picture of the division between chains and independents. Throughout the report, when you see the word “independent,” it refers to all pizzerias with less than 10 units; any business with more than 10 outlets is referred to as a chain.
This year’s numbers show that 53% of pizza outlets are independently owned and control 40% of total pizza industry sales. With total sales for independents at $14,557,100,260 and a unit count of 38,297, the average annual sales for independents for the period ending September 2012 was $380,111.
Ranking the Top 50
The Top 50 Pizza Chains, courtesy of Technomic, includes total U.S. sales and store counts for pizzeria chains ranked among a larger list of the nation’s Top 500 Restaurants, the result of more than four decades of sales and trend tracking research. The total 2011 combined sales from the Top 50 equaled $18,472,166,000, with total per-unit sales averaging $653,859 (among 28,251 units). In 2010, the top 50 sales equaled $18,350,160,000, with total per-unit sales averaging $661,053 (out of 27,759 units). Compared to the Top 50 performance in 2010 (a gain in sales of more than $800,000,000), the 2011 rise in sales of $122,006,000 reflects a focus on unit growth for the year. Meanwhile, store counts rose by 492 in 2011 (compared to 203 in 2010).
Newcomers to the Top 50 list this year include Gambino’s Pizza; Snappy Tomato Pizza; Lou Malnati’s; Nancy’s Pizza; Sarpino’s Pizzeria; Amato’s Pizza; and Dion’s Pizza. Pizza chains that were dropped from the list this year included Donato’s; Wolfgang Puck Express; Zpizza; Straw Hat Pizza; RedBrick Pizza; Brixx Wood Fired Pizza; and CPK ASAP.
The Big Picture
According to Technomic’s 2012 Top 500 Chain Restaurant Report, U.S. commercial chain restaurant industry sales grew to $370.2 billion in 2011, an increase of 2.5% over 2010. The number of restaurant units, however, showed a decline of 0.8% from 2010 to 2011. Technomic’s chain restaurant sales forecast for 2012 was an increase of 2.9%, to $381 billion.
Looking at the restaurant industry by segment showed that limited-service grew sales 3.1% to more than $200 billion in 2011, while units declined by 0.3%. The full-service segment grew sales 1.8% to just over $169 billion and also saw a reduction in the number of units—down 1.5% from 2010.
Experts at Technomic acknowledge that, while disposable income remained low in 2011 due to high unemployment and a less-than-speedy economic recovery, restaurants weren’t as affected as other sectors because their customers tend to be more affluent. While the industry is trending upward, Technomic insiders also advise that restaurateurs who want to stay ahead of the curve will do so only through brand evolution; concept freshness; attention to the needs of their customers; creativity in pricing structure; attention to social media and third-party online deals such as Groupon and LivingSocial; the offering of value beyond price (i.e., food quality); attentive service; order accuracy; and speed and convenience.
PMQ caught up with Adam Kuban, founder and editor at large of pizza blog Slice, to get his opinions on current trends in the industry. Here’s what he had to say:
Mobile Units: Trailer-based wood-fired-oven operations have surged in the last year, and I think they’ll continue to proliferate at weekend festivals and in particular at local farmers’ markets, where operators tend to top pies with produce from neighboring vendors.
The Neapolitan Surge: I’m also seeing owners of traditional wood-fired Neapolitan pizzerias spin off new concepts. Giulio Adriani tried this with La Montanara (now closed), a deep-fried-pizza offshoot of his New York City-based Forcella, and Ann Kim of Minneapolis’s Pizzeria Lola (pizzerialola.com) plans to open Hello Pizza in 2013, serving New York-style, by-the-slice pizza rather than the wood-fired pies she’s known for.
Amateur Success: At Slice, we’ve also seen a fair amount of serious-amateur-to-owner success stories. Brooklyn-based Paulie Gee’s (pauliegee.com) was born of Paul Giannone’s backyard pizza making passion. Caleb Schiff also went from hosting backyard-oven pizza parties to realizing his dream at Pizzicletta (pizzicletta.com) in Flagstaff, Arizona. Brooklyn’s David Sheridan has a similar story; he’s opening Wheated in 2013 after practicing in his self-built wood oven. And in Baltimore, word is that Pizzeria Ruby will open soon, the culmination of years of research and testing by a man who goes by the moniker of “Pizzablogger” on the online forum Pizzamaking.com.