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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.

(page 2 of 4)

Store Counts per Capita Charts 

PMQ 2012 Reader Census Stat: 
63% of respondents report sales increasing over last year.

The Big Three

Pizza Hut, Domino’s Pizza and Papa John’s once again rank first in sales and unit counts. According to Technomic, Pizza Hut holds the top spot, with 7,595 U.S. units, up slightly from last year’s 7,542, and accounting for 10.57% of all pizzerias in the United States. With these locations, Pizza Hut captures 14.68% of all U.S. pizza sales. 

The Big Three worked hard this year to grab consumers’ attention. Pizza Hut continues to promote its Book It Reading Program, now celebrating its 28th year, and recently teamed up with Christina Aguilera for a PSA to promote its annual World Hunger Relief campaign. Papa John’s gave away millions of pizzas last year to football fans during a Super Bowl XLVI coin toss promotion. The company also signed a multiyear deal to be the official pizza sponsor of the NFL in Canada, Mexico and the U.K. and promises to give away two million free pizzas in its PapaRewards program. Meanwhile, Domino’s unveiled a new logo; debuted stuffed cheesy bread, Parmesan bread bites and the first gluten-free crust from a chain; told customers that “no additions or substitutions” were allowed in its Artisan Pizza line; celebrated selling $1 billion online in the span of one year; and introduced a handmade pan pizza.

 PMQ 2012 Reader Census Stat:
18% of respondents receive orders through the Internet, and another 18% plan to add the option during the next 12 months.

Watching the Trends

Fads come and go in the pizza industry, but lasting trends can have a big effect on your bottom line if you know how to capitalize on them. PMQ recently sat down with Scott Wiener, owner of Scott’s Pizza Tours in New York, to compare notes on what’s hot in the industry. “The industry is popping right now,” Wiener says. “The economy is bouncing back, and people see pizza as an affordable meal for any budget and any cuisine—from gourmet to street food.”

Speaking of street food, since we announced the emergence of pizza trucks and mobile pizzeria units in last year’s report, their growth has only sped up. “We’re just seeing the beginning of pizza trucks,” Wiener predicts. “Where we used to get a reheated pie, we’re now receiving full-bake pizzas from trucks and mobile units. Some are even offering delivery!”

Customizable pizza concepts (think MOD Pizza, Uncle Maddio’s and Top That!) continue to open at a steady clip as consumers embrace the build-your-own concept and the freedom to add as many toppings as they like for one set price. Wiener says it gives pizza the fast-food convenience that was attempted in the past with drive-through windows but didn’t really take off. “This concept is spreading, and I don’t see it slowing down,” he says. “People will always love convenience and speed and the ability to walk in, grab their pizza and walk out.”

We continue to see growth in gluten-free pizza offerings as well. According to Mintel, a leading market research company, gluten-free menu items increased 280% from Q3 2008 to Q3 2011, and the gluten-free industry is exploding, growing 27% since 2009 and exceeding $6 billion in 2011. The latest PMQ Reader Census reveals that 25% of operators now offer gluten-free crusts to customers (up from 16% last year).

Although not considered a trend anymore, online ordering continues to grow and expand. And while some pizzeria operators are still a bit gun-shy about it, one look at the success of some of the top chains in this area can attest to its viability.

Other trends noted by Wiener include the emergence of brewpub-pizzeria combos; an increasing consumer interest in what type of oven operators are using; and novelty toppings to grab consumer attention, from hot-dog-stuffed crusts to snake venom.

“Gluten-free crust is now expected by the consumer, but staff must be trained to understand how to prevent or minimize cross-contamination,” says Peter Reinhart, author, baking instructor at Johnson & Wales University and founder of PizzaQuest.com from Charlotte, North Carolina. He encourages the use of local ingredients whenever possible and reminds operators to acknowledge vendors and sources on store literature. “Whole-grain options are also expected now,” Reinhart adds. “But it needs to taste good. Flavor always wins over healthfulness.”

Reader Insights

Throughout the year, information continually flows through PMQ via interviews with pizzeria operators, informal surveys on social media sites and by way of our annual reader survey. In PMQ’s 2012 Pizza Industry Census, which pooled responses from nearly 300 readers, we were able to pull out some interesting statistics to compare to last year’s results.

PMQ 2012 Reader Census Stat: 
83% of those surveyed say they make their own dough, with an additional 57% creating their own sauce.PMQ 2012 Reader Census Stat: 
83% of those surveyed say they make their own dough, with an additional 57% creating their own sauce.

You’ll find statistics from the census peppered throughout this report, such as how many operators are making their own dough, how much is being charged for delivery, and what percentage accept orders online. Ninety-nine percent of those who responded to this year’s census are independent operators (owning less than 10 units), helping to provide a vivid snapshot of the state of the independent sector.

We’re watching the industry grow from old-school techniques to one that is heartily embracing the Internet and social media. An overwhelming 89% of respondents report using Facebook on a regular basis, while more than half of those surveyed say they use their cell phone to access the Internet every day. And what may be surprising to many is that the operators who have been in business the longest (more than 50 years) are on board with everyone else. Nearly all of the long-time operators who answered our survey are utilizing Facebook, and 50% are even on trend by offering gluten-free pizza.

Visit PMQ.com/census12 to view PMQ’s 2012 Pizza Industry Census.

Additional Insights

In a December 2011 report titled “Pizza Restaurants—U.S.,” Mintel, a leading market research company, revealed the following insights about the industry and its consumers:

  • Pizza Hut is the most-visited brand among survey respondents, while independent, local pizzerias are the second most-visited.
  • Issues surrounding diet, health and weight could affect the industry, with nearly 1/3 of women indicating that they expect nutrition labeling to change what they order.
  • Nearly half (47%) of survey respondents consider an online ordering option important. Among them are those aged 25 to 34 (57%) and those with three or more children (55%).
  • Cheese pizza remains the leading pizza type in menu mentions, followed by vegetable pizza.
  • The core pizza consumer is aged 18 to 44, with 75% to 77% of this age group being a pizza restaurant customer.
  • Those with an annual income of $75,000 to $99,900 are the biggest pizza users, as are households with children.
  • Most survey respondents (84%) agree that pizza from a pizzeria is higher-quality than frozen pizza.
  • When deciding to order from a pizzeria, 71% of women consider having a coupon important vs. 59% of men.

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