CHICAGO —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
In its 2009 “Top 100 Limited-Service Pizza Chains Restaurant Report,” released late last month, the Chicago-based consulting firm found that the fastest-growing chains in the heavily saturated pizza segment are those with highly focused positioning. The largest brands, including segment leaders Pizza Hut, Domino’s and Papa John’s, are using new menu items to help expand market share, but may only find real growth overseas, Technomic notes. —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
“Most successful pizza chains have staked out highly defined market positions that allow them to stand out from the pack,” said Darren Tristano, Technomic executive vice president. “The key to growth in the slow economy will be differentiation. Top players will have to understand the competition, successfully identify emerging trends, and find and execute a strong position in the market.” —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
According to Technomic, the limited-service pizza segment had sales growth of about 0.4 percent in 2008, totaling $29 billion. —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
The fastest-growing pizza chain in terms of sales was Little Caesars, with 2008 sales of $1.06 billion, which represented a 13.4-percent increase over 2007. Papa Murphy’s was second in terms of growth at 7.9 percent, followed by Pizza Hut and Papa John’s with increases of 3.9 percent and 3.2 percent, respectively. The other pizza chain with positive sales growth was CiCi’s, at 2.6 percent. —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
Technomic has identified several trends or niches powering certain restaurant chains to high rates of growth, including a healthful and environmentally friendly positioning for Pizza Fusion and a focus on the Hispanic demographic for Pizza Patrón. Technomic also recognized Papa Murphy’s for leading the take-and-bake pizza niche and pointed to Little Caesars as a leader in value for that chain’s $5 Hot-N-Ready Pizza. —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
For all the smaller chains’ strong rates of growth, however, those upstart brands are not likely to reach nationwide mega-chain status due to the pizza segment’s heavy saturation, Tristano said. —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
“It’s very unlikely you’ll see a chain grow to the size of a Pizza Hut in the next 10 years,” he said. “ZPizza has done a great job, and it’s still just at 100 units or so, and even a Pizza Patrón has limited markets to go after. The more differentiated you are, the less opportunity there is. The pizza segment is saturated, and it’s not likely to increase by 50 percent.” —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
Don’t tell that to executives at growing pizza brands, however. —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
“Most of the time that’s true,” Andy Gamm, director of brand development for Pizza Patrón, said of a chain’s growth opportunities being limited by its defined focus. “But our point of differentiation, our laser focus on the Hispanic demographic, represents the largest niche audience out there. We have an opportunity to be a nationally recognized brand even with our narrow focus.” —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
Dallas-based Pizza Patrón currently has 92 units open and 14 under construction in six states. —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
Pizza Fusion’s founder and president, Vaughan Lazar, echoes Gamm’s sentiment. He said his chain’s commitment to organic food and green business practices are core brand values that can stand up to any competitor trying to mimic them. —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
“If you put yourself in a market just to be different, you’re setting yourself up for failure down the road,” he said, “but if you’re in the right place at the right time and answer a need, it’s a whole different story. We didn’t do these things just to be different; it wasn’t our angle.” —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
Consumers are more sophisticated these days, Lazar added, and they can tell when a brand isn’t being genuine in green practices or any other differentiation efforts. Pizza Fusion, based in Fort Lauderdale, Fla., has 21 restaurants in 10 states. —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
Tristano said that big pizza players Pizza Hut, Domino’s and Papa John’s aren’t standing put, either. Pizza Hut has moved toward more catering with its Tuscani Pastas line, Domino’s is differentiating itself with Oven Toasted Subs and Pasta Bread Bowls, and Papa John’s continues to market its “Better ingredients, better pizza” positioning. —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
Still, Tristano noted, the big three’s biggest opportunity for unit growth will be outside the United States. —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
“When you hit the level of maturity that those brands have, you have to look to other ways of growing,” he said. “As a result, they’ve been growing much more internationally, playing in a global market instead of just the U.S. market.”— [email protected] —Even though sales in the pizza segment have been hard hit during the recession, some specialized chains have carved out a bigger slice of the pie thanks to differentiated branding, according to a recent report from Technomic Inc.
