Older consumers who grew up in the small-town heartland of the U.S. likely got their first taste of the world’s greatest food from Pizza Hut. Today, you can find world-renowned non-chain pizzerias just about anywhere, from Righteous Slice in Rexburg, Idaho, to Leña Pizza + Bagels in Cleveland, Mississippi, and Lincoln Winebar in Mount Vernon, Iowa.
In fact, independent pizzerias outnumber chain locations across the country, challenging brands like Pizza Hut to keep up on the innovation side—although the chains still hold outsize advantages in national advertising, marketing and name recognition. Pizza Hut remains the No. 2 pizza chain, but it has struggled in the past year as same-store sales have declined and Domino’s continues to leverage technology to get more pizza to more customers faster. David Gibbs, CEO of Pizza Hut parent company Yum! Brands, recently said Pizza Hut’s value message wasn’t working as hoped, even with new deals like Wing Wednesdays and 2-Buck-Tuesdays coming online.
Pizza Hut’s latest offer is a limited-edition menu lineup called Crafted Flatzz, which represented the “largest simultaneous global menu launch” in the chain’s history.
As Pizza Hut CEO Aaron Powell recently told PMQ’s sister publication, QSR magazine, the flatbreads, designed for lunches and “solo pizza moments,” will anchor an ongoing category evolution for the brand. In the following Q&A with QSR’s editorial director, Danny Klein, Powell discussed Pizza Hut’s strategy for innovation and growth—and why it’s not about a “race to the bottom.”
Danny Klein: The “largest simultaneous global launch” is a pretty big headline for a brand that’s been around this long. What goes into something of that scale and what are you bringing forward with Crafted Flatzz?
Aaron Powell: I will share two things, Danny. First of all, why I’m so excited by the innovation itself. I’m excited because it is delicious, great-tasting, real pizza. It has sauce to it. It’s real. And it tastes great. The second thing is, it’s a spectacular value here in the U.S. It will be $5, and it will fill you up for $5, which is great, up until 5 p.m., then the pricing can vary.
And it’s new innovation. It’s a new way to pizza. It’s a flatbread shape, but with real pizza taste and flavors. That’s why I’m excited by the innovation.
Now, the global part of it is, we did research around the world and got a lot of consumer inputs. And we knew this thing could hunt in a lot of markets throughout the world. So this is a time when leveraging scale makes sense. I lean into this philosophy of “common as possible and different as necessary.” So the basics of this work and we do flex for local recipes and other things since it can really resonate in the local markets. Super excited.
Klein: Break down the flatbread angle and what Pizza Hut was trying to accomplish by diving into a new category of sorts.
Powell: Two different points. One is we are really driving at Pizza Hut to try to increase lunch and the individual occasion. My favorite fact there is [that] two-thirds of pizza is consumed after 4 p.m. But people love the taste of pizza, so it’s only the job of innovation and brands to answer the call. And at Pizza Hut, we are proud innovators to bring new forms of pizza so they can work at any hour of the day.
The second thing, and it’s why we call it Crafted Flatzz, is we want it to be elevated. It is a thin, crispy crust. The recipes are generously topped and have things like Nashville Hot. We have things in other markets like Tandoori Chicken. We actually took 11 global recipes inspired by a lot of places, and then markets choose from that recipe book, if you will, and they can even tweak it a little bit more.
It’s a combination of innovation for this new individual occasion that I see as an opportunity, and then, secondly, bringing it at an elevated taste with interesting recipes that, of course, have to taste great.
Klein: How much time went into this, from ideation to global rollout?
Powell: It generally varies. This one, in particular, has been less than eight months from the first prototype that we saw to rollout. Because I’ve been at Pizza Hut for a few years, sometimes it’s a year-and-a-half or two years. In this case, prototype came out, got with our different teams, talked to consumers—this thing works.
Klein: Let’s get deeper into the value play at work. That’s obviously a pulsing topic given the steady inflation over the past few years. How do you break through promotional clutter?
Powell: This is an environment where the consumer wants value. They’re being very choosy with every dollar they spend. The best way in, in my mind, is to bring something that’s delicious and exciting and a new and different way of delivering value.
By the way, pizza is always, on a per-eater basis, something that’s a pretty good value, but for the individual, it has not had a whole lot of solutions. So as opposed to a race-to-the-bottom of just seeing how many pennies off you could do for a pizza…that plays a role, but that’s not a way of really adding value. This is a way of giving a great benefit at a great cost in a new way to pizza.
I always believe in innovation to deliver value as a better way than just figuring out who can discount the deepest.
Klein: This “new way to pizza” mantra has been a part of who Pizza Hut is for decades. How is it still a guidepost?
Powell: I’d reflect this way: We started in 1958. We are the company that brought pizza to most of the world. The first pizza experience, most people throughout the world had, was either by Pizza Hut or inspired by Pizza Hut. Unless you’re from Italy or New York City, it was most likely inspired by us. When we’re at our best, we are the ones who are innovating and bringing excitement, and it’s our job as leaders to make sure that we stay focused on who we are and be the best version of ourselves. Having great pizza, both new innovation and iconic pizzas you can only get from Pizza Hut, is who we are when we’re at our best.
Klein: What kind of marketing campaign will support the launch, holistically speaking?
Powell: We always try to figure out what’s the right insight. And our insight and weigh-in here is about “adults-only pizza.” Here’s the insight—Gen Z have lots of things that they’re changing. They eat on-the-go all the time. They consume more hot sauce than ketchup. They are not tied to the day they want to eat. They are a lot more digital. They also want “me time.” There is so much crazy stuff going on, they want something for themselves.
So the inspiration here, both on the portion size and the recipes that we’re doing, are adult-focused pizza. Let the kids happily enjoy a large Stuffed Crust from Pizza Hut. And you also enjoy pizza just for you. Of course, kids can eat the pizza, but that’s what the marketing campaign is going to be all about.
Klein: Beyond value, is there check add-on potential here?
Powell: We want to roll it out and say, this is for you. This is a me occasion. You have a great lunch type of price. Over time, though, we are creating a category that’s a for-me party-of-one segment that’s going to have Crafted Flatzz, Personal Pan Pizza—almost everyone has a memory of personal pan pizza growing up—Melts, and great chicken wings.
Just like some other parts of limited-service restaurants try to establish breakfast, they do not just do one item for breakfast. We have this whole suite that can either be for lunch, individual occasion, or as an add-on. That’s absolutely the platform that we’re intentionally building.
