The 2014 Pizza Power Report
Loaded with facts and figures and spotlighting the hottest pizza trends, PMQ’s state-of-the-industry report provides an in-depth survey of the wide world of pizza.
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So what’s our final total? By our estimates, total sales for the period ending September 2013 amount to $37,375,108,000. We derived this sum by taking last year’s total sales of $36,786,524,044 (according to CHD Expert) and factoring in our estimated growth figure of 1.16% over the past year.
Store Counts and Averages
We have used CHD Expert’s data relating to total store counts. The total number of stores, according to these figures, is 71,387. About 53% of all pizza stores are independents, while 47% are chains. (For the record, we are defining independents as pizzerias with fewer than 10 units; any company with more than 10 stores is referred to as a chain.)
According to our calculations, based on CHD’s total number of pizza stores and our estimated total sales figure for 2013, the average per-unit sales for all U.S. pizzerias (chains and independents combined) equaled $523,556, compared to $511,948 in the previous year.
According to CHD, the chains’ total sales amounted to $22,301,349,410 in 2013. The chains’ average per-unit sales equaled $668,125 in 2013, an increase from $653,859 in 2012.
According to PMQ’s estimates, independent pizzerias’ total sales amounted to $15,073,758,590, compared to $14,557,100,260 in the previous year. The average annual sales for independents amounted to $396,594, compared to $380,111 in the previous year.
Finally, the total sales for the Top 50 pizzeria chains in 2012 was $19,753,075,000, with per-unit sales averaging $721,995 (among 27,359 units), according to Technomic. In 2011, the Top 50 sales equaled $18,472,166,000, with total per-unit sales averaging $653,859 (among 28,251 units). That means the Top 50 experienced a total sales increase of nearly $1,280,909,000, while store counts fell by 892 in 2012.
The Cold War
The economy appears to have hit a “sweet spot” as far as the pizza restaurant business is concerned. While the recovery has been slow, it’s been strong enough to make pizza more attractive as an affordable dining-out option, while the frozen pizza segment, according to Mintel, has declined by 1.1%. Mintel projects that frozen pizza sales will continue to drop through 2018 “as consumers rediscover their spending power and open their wallets for food away from home.” According to a survey of 2,000 pizza-eating households released by Mintel in July 2013, consumers cited taste and healthfulness as barriers to frozen pizza growth. Mintel also states that, although black consumers and families with kids are more likely to eat frozen pizza, these two groups will likely grow only modestly between 2013 and 2018.
Overall Restaurant Growth
On the whole, the restaurant industry continues to enjoy modest growth and is the nation’s second-largest private-sector employer, according to NRA research. The NRA projects restaurant-industry sales of $660.5 billion for 2013, an increase of 3.8% from 2012’s figure of $636 billion and equal to 4% of the U.S. gross domestic product. This was the fourth straight year that sales went up for the restaurant industry. Meanwhile, restaurant job growth in 2013 continued to outpace national employment growth for the 14th straight year, adding jobs at a projected rate of 2.4% and topping the national rate of 1.5%. Nearly 10% of American workers—or 13.1 million people—drew paychecks from the restaurant industry in 2013. The NRA also reports that the restaurant industry is expected to add 1.3 million jobs over the next decade for a total of 14.4 million by 2023.
The “Better Pizza” Movement
Pizza, the old joke goes, is like sex: When it’s good, it’s great, and when it’s bad, it’s still pretty good. Fortunately, with the rising popularity of artisan pizza, bad pies are getting harder to find. Many consumers today simply demand more from pizza makers, and pizzerias have stepped up to the challenge. It’s all part of the so-called “better pizza” movement, which has kept pace with the “better beer” and “better burger” trends. Cheap and basic often just doesn’t cut it anymore. The freshness of farm-to-table ingredients creates the perception of a healthier pie, while exotic cheeses and meats—think Gruyère and sopressata—convey an aura of sophistication and provide a new experience in flavor profiles.
“The consumer is really starting to figure things out, and everybody’s looking at quality,” says Scott Wiener, owner of Scott’s Pizza Tours in New York. “In part, I think that’s because the consumer base is more educated today. People know more about what they’re eating. When they walk into a pizzeria now, they’ll ask you if you’re using San Marzano tomatoes or buffalo mozzarella cheese.”
Ethnic Flavor Trends
According to research firm Technomic, ethnic flavors are coming to the fore in the pizza industry, including:
Thai Breaker—Top That! Pizza offers this Thai-themed treat, made with Thai peanut sauce, whole milk mozzarella, marinated chicken, roasted garlic, caramelized onions, chopped scallions, julienne carrots, sharp cheddar and roasted peanuts.
Jamaican Jerk—A popular specialty pie at Uncle Maddio’s Pizza Joint, this exotic pizza features tomato-basil sauce, mozzarella, grilled jerk chicken, red onions, green peppers, pineapples and cilantro.
Athenian—Pie Five Pizza Company serves up this thin-crust Greek pizza with Italian herbs, fresh garlic, chicken, Kalamata olives, red onions, banana peppers, crumbled feta, fresh basil, sun-dried tomatoes and a mozzarella/provolone blend.
Aging baby boomers also play a role, helping to fuel the “better pizza” movement with their higher expectations, refined tastes and disposable cash. Born after WWII, they were the first generation of Americans to grow up on pizza, and, unlike their parents who had to pinch pennies in the Great Depression, baby boomers will typically pay more for higher quality, although good value remains important to them.
In general, most consumers haven’t let a sluggish economy get in the way of pleasing their palates; if anything, they’re getting pickier about quality. In a 2012 survey by research firm Technomic, 34% of diners said they were willing to pay more for gourmet ingredients, compared to 26% in 2010, while 27% said they’d shell out more for natural or organic ingredients, up from 21% two years earlier. In the same study, 33% said they were “interested in trying pizza with highly innovative toppings,” a big jump from 13% in 2010.
“I think people are still holding back on their dining-out budgets, but they see an upscale pizza as a better value than a midscale steakhouse or seafood,” Wiener notes. “A high-end pizza is still quite affordable—the high point is probably about $22 for a personal pizza. And that’s still pretty inexpensive when you’re comparing an entrée at a nice restaurant.”
For proof of artisan pizza’s growing popularity, look no further than the country’s largest chains, including Domino’s (dominos.com), which leapt into the market a couple of years ago and offers such selections as the Chicken & Bacon Carbonara, the Tuscan Salami & Roasted Veggie and the Spinach & Feta. Meanwhile, take-and-bake giant Papa Murphy’s (papamurphys.com) tested a premium line of pizzas made with gourmet ingredients ranging from fennel sausage and goat cheese to prosciutto and arugula.