Four independent pizzeria pioneers discussed a range of pressing industry topics—from wage woes to legal weed—at the Great Western Pizza Summit, hosted by PMQ at Wholly Stromboli (whollystromboli.com) in Fort Lupton, Colorado, on July 15. Summit panelists included Think Tank stalwarts and buddies Richard “Daddio” Ames, owner of Daddio’s Pizza (daddios.ca) in Grande Prairie, Alberta, Canada, and Steve “Bodega Highway” Hitchcock, founder of Soda Creek Pizza (sodacreekpizza.com) in Steamboat Springs, Colorado, plus Wholly Stromboli co-founder Melissa Rickman and Michael LaMarca, mastermind of Cleveland-based Master Pizza (masterpizza.com). Here are the highlights of the panel discussion—and don’t miss exclusive video coverage of the event this month at PizzaTV.com.
PMQ: Reports of significant minimum wage hikes around the country are in the news. What impact will these hikes have on your operations?
Richard Ames: Alberta just elected left-wing government on the promise of raising the minimum wage throughout Canada to $15 from the current $10.20 by 2018. I’m pushing hard to make a profit at the rate I pay employees today. My rough calculations are that I’ll have to raise prices by about 20% to stay profitable as these increases are implemented. Depending on fluctuations in the cost of oil, which is the biggest economic driver in my region, I may have no option but to cut staff or staff hours or depend on my family even more to operate the store.
Steve Hitchcock: Running a business in a resort community means I already pay my employees a higher wage. If $15 is the threshold, half my crew is already at that level. I’m more concerned with how wage requirements are implemented. Will pay regulations apply to all businesses no matter how big you are?
Melissa Rickman: If you’re required to pay a dishwasher $15, how much will a stromboli cost at our restaurant? Wage increases are all relative, because if you pay the dishwasher $15, your skilled worker is going to demand a pay raise.
Michael LaMarca: At Master Pizza, we’ve always started our drivers and servers above minimum wage, because they’re critical to our business model. We’ve tried to be creative, staying ahead of the curve by paying above the minimum wage within our 30% margins established for labor costs. We also identify key contributors and pay them at least $12 an hour as part of our lead team. We aren’t hesitant to build projected wage increases into our menu prices with incremental increases.
PMQ: The FDA has delayed implementation of nutritional menu labeling for a year. What’s your take on the mandate?
Ames: I think it’s a good thing. Consumers are much more conscious of what they’re eating. When customers ask for something in big numbers and you can do it (and your competitors can’t), they’ll come to you. There are numerous software products available to help you with nutritional analysis.
LaMarca: My food supplier, U.S. Foods, offers programs on its website that break down nutrition data. But I think this mandate is hard because when a 16-year-old orders a large pepperoni pizza with extra cheese, the data—whether it’s computed per slice or per pie—is almost impossible to make consistent. So I can easily calculate calories for a regular cheese pizza, but a deluxe pizza on a busy Friday night is going to be a problem.
PMQ’s Brian Hernandez stops in to say hello to Think Tank member Steve Hitchcock at Soda Creek Pizza in Steamboat Springs, Colorado, prior to the Western Pizza Summit.
PMQ: How is the fast-casual trend affecting your operation?
Rickman: In Boulder, fast-casual is starting to dominate the market. At Wholly Stromboli, we combat fast- casual with high-quality food delivered with a welcoming ambience. I believe if you offer customers a memorable dining experience, they will choose you every time. Sure, if you only have a half hour to eat, you’re not coming to Wholly Stromboli, and fast-casual may be the perfect choice for you.
Hitchcock: As a takeout and delivery operation, Soda Creek differentiates itself from other pizza providers with the freshness of our ingredients and some truly unconventional toppings. Since we opened, we’ve featured specialties like smoked trout, rattlesnake, sockeye salmon, alligator, buffalo, wild boar and elk. These items give us something to talk about in the market that’s different than any other competitor.
PMQ: Discuss the importance of POS systems and technology to your operations.
LaMarca: Master Pizza has been in business since 1955, and it was built on everything but technology. When I would have a business meeting with my dad, he would pull out a notebook and pencil, and I’d plug in my computer. Over the years, it has become apparent that technology is not going away. The installation of our POS system was a really pivotal point in the organization’s success. Online ordering makes the process so much easier for customers, and currently we’re seeing a 6% increase in sales per ticket average over phone ordering, up from 1% or 2% when we started with online ordering. Now 18% to 25% of our orders are online, which frees up the logjam on our phones and in our restaurant.
Hitchcock: I started with a three-part printed order form. When I opened Soda Creek, we had an integrated technology system called Prism by Microworks. It streamlines our business [and] offers accurate information on what we’re actually selling. At the same time, we can correlate our labor costs to pizza production and fine-tune our staff scheduling.
Ames: I would simply add that, when you are considering price points for different systems, analyze the cost value of the technology for your specific operation. It depends, to some degree, on how big you are and what you’re trying to do. There are Cadillac systems out there, but I suggest you start with the appropriate level you need.
Rickman: Good point-of-service technology helps you engineer your menu. It tells you what’s selling, what’s not selling, what high-margin items move off the shelf. Instead of an emotional decision, you can make menu decisions based on black and white. My advice is, don’t go cheap.
Soda Creek Pizza’s Pesto Cali is a great spinach- and artichoke-loaded option in a lineup ofpies that include nature-celebrating favorite toppings like elk and sockeye salmon.
PMQ: As a pizzeria operator, how important is it to pay attention to your quality of life?
LaMarca: Having hobbies, getting away from work on a regular basis, is absolutely critical to success. At my stores, I want you 100% when you’re on the clock. If you don’t get the proper rest and time away from the grind of this business, it’s so easy to get short and rude with customers and co-workers. You may not know you’re not functioning at 100%.
Ames: When I started my pizzeria, we were open every day except Christmas. When I took a breath to think about it, I realized there’s a reason the Canadian government establishes all these holidays: We all need time off. Now I close every holiday. We may be leaving some money on the table but, in a highly competitive hiring environment, my employees appreciate the time to be with their families, and they’re better employees because of it.
Hitchcock: For a pizzeria in a resort community, holidays are some of our busiest days of the year, so closing isn’t really an option. That said, I believe it’s vital that you hire the kind of employees you can trust so you can walk out the door and let go. This may require budgeting in some extra costs so that you can get the distance you need with the confidence that your employees have the skills and training to make the right decisions. I see this as related to the idea of not being too shortsighted. You need to get away from the store regularly to get the perspective you need to make informed decisions. I suggest that pizzeria owners carve out a defined time every week to get out into the community and visit with other businesspeople.
PMQ: How have your pizzerias responded to the demand for gluten-free options?
LaMarca: We do nothing with gluten-free or low-carb. We feel that, when our customers put their hard-earned money on the table, we’re going to give them the best product we can give them. We’ve been building our brand for many years. Our specialty is pizza, not health food, and we try to do it very well.
Rickman: We had Mike’s philosophy, but when I began struggling with health issues based on all the wheat I was consuming as a pizza operator, I had to rethink it. At the same time, we were so inundated with requests for gluten-free options that we decided to develop some
gluten-free recipes, and now we offer a whole line of pizzas, stromboli and even dessert items. It costs more to produce gluten-free dishes in terms of utensils, ingredients, time and training. But we don’t gouge. We do pass on that additional $4 in costs to the customer.
PMQ: For you Colorado operators, how has the state’s legalization of marijuana affected sales?
Rickman: I get questions all the time: “Do you put pot on your pizza?” The answer is no. Sale of marijuana is very heavily regulated in the state. For us, the biggest change has been an occasional businessperson associated with the myriad of legal marijuana dispensaries coming in and spending some of those pot revenues at Wholly Stromboli.
Hitchcock: The benefit of legalization for us is that it simplifies our stance with our employees. We treat alcohol use and pot use exactly the same. If you come to work under the influence of pot or alcohol, you’re gone. If you’re a manager and you knowingly allow an employee to work under the influence of either pot or alcohol, you’re gone.
PMQ’s Brian Hernandez and Western Pizza Summit panel member Richard Ames enjoy the hospitality at WhollyStromboliwhere pizza insiders gathered to discuss the state of independent pizzerias.
PMQ: What is the hottest social media tactic you’ve employed recently?
Ames: I’ve found that my most effective social media tool is video. I recently put up a video of a guy dancing in a thunderstorm while waiting for the train to pass. It was taken with the dashcam fixed to a Daddio’s delivery vehicle, while I waited one car behind the guy for 25 minutes. When I put the video on our Facebook page, it received 2,000 views in under 24 hours.
Hitchcock: I got the idea to feature Steamboat Springs’ businesses one time after I walked out of a local shop feeling really good about the service I got there. We sent a couple of free pizzas to that business and then challenged our fans to post about great experiences they’ve had at other businesses so we can recognize that effort with free pizza and a photo on our Facebook page. We don’t care if the business has three or 50 employees—we’ll deliver the pizza. The cost to us is well worth the benefit in goodwill in the community and reinforcing our own reputation as a solid local citizen.
PMQ: How has the Think Tank helped you in your operation?
Ames: When I started my restaurant in 2005, I had never worked in a kitchen. I had a problem I couldn’t figure out, and eventually I landed on the Think Tank page on PMQ.com and logged on. It wasn’t 24 hours later, and the problem I had struggled with for three months was solved. Think Tank is an extended family. Steve [Hitchcock] and I met for the first time tonight, although we’ve exchanged barbs and ideas for years on Think Tank. It’s simply one of the most valuable business tools you’ll ever come across in this business, populated by an incredible group of people. Years ago, I had a customer who was a special-needs youth, and he loved magnets from Daddio’s. I thought he might like magnets from other pizzerias, and I put the request on Think Tank. In a matter of weeks, my friend and customer had been sent 40 square feet of magnets to put on his refrigerator from pizzerias all over the world. Think Tank members are the heart and soul of the pizza industry.