At the end of the year, Ken Calwell, president of take-and-bake pizza chain operator Papa Murphy’s International, will take the reins as chief executive.
He replaces John Barr, who will remain chairman, and plans to focus on the strategic growth of the 1,290-unit chain, which was acquired by New York-based Lee Equity Partners last year.
Calwell plans to build on Papa Murphy’s “food forward” focus and differentiation as a take-and-bake pizza brand that brings families together for a made-at-home meal.
Calwell recently spoke with Nation’s Restaurant News about Papa Murphy’s future.
What are your priorities as you step into the chief executive role?
I want to continue to keep us very focused on doing what we do best.
Consumers love Papa Murphy’s. But what do they love? They love the quality of our product. We don’t spend money on ovens or freezers, so we can put all that money into our food and preparing it fresh. And we do that at a really fair price.
We are a simple concept that’s very focused on pizza, on ingredients and preparation to make it great tasting. That’s the strength of our brand.
It’s so tempting for people to change up the game. I think it’s almost harder to stay focused on the core values of the brand and make it great.
That doesn’t mean everything will stay the same. We have opportunities. We are incredibly strong in the Pacific Northwest. In Oregon, Washington, Idaho and Northern California, people have grown up with this brand and they love it. Like In-N-Out Burger in California or Chick-fil-A in the South, that’s how we are in the Pacific Northwest.
We have to figure out how to expand smartly and strategically across the U.S. We’ve got to make sure we don’t expand too broadly, too fast. We have to choose markets very selectively that we’ll move into and focus our resources.
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Are you a fan of In-N-Out and Chick-fil-A?
I really respect In-N-Out within the burger category. They have a very strong brand. I respect Chick-fil-A and Chipotle.
What they have in common is they do one thing and do it well. Chick-fil-A is all about a great chicken sandwich. In-N-Out is all about a great burger and fries. Chipotle’s commitment to high-quality food is phenomenal.
When they come into a market, everyone knows about it and they have lines around the block when they open a store. That’s what I see for Papa Murphy’s.
How many states is Papa Murphy’s in now?
We are in about 37 states. But the real opportunity is to not measure by how many states we’re in, but by how well we’re doing in the states we’re in. We have opportunity there to focus our resources, to come in with more stores at a time, with more franchisees at a time and more advertising at a time.
Papa Murphy’s average unit volumes dipped in 2010. How have sales been this year?
I would say 2011 has been much stronger. Our sales are growing very well. We’re seeing very good momentum from a sales and transaction perspective.
In 2010, we discovered we spread a bit too broadly. We want to choose our markets more carefully and use our resources more carefully.
Are you planning other management personnel changes?
We made some strategic changes this summer and fall. We are interviewing for a new senior vice president for operations, which is a key role for us. That’s to replace Kevin King, who’s now our chief development officer. We’ll also make some more investments in our development team to support Kevin.
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Papa Murphy’s marked its 30th anniversary this year and launched a new ad campaign focused on value and customization. Is that the brand’s focus going forward?
Our campaign, the Take ’N Bake Revolution, was designed to drive awareness of who we are, and also awareness of take-and-bake pizza. Linking those two makes a lot of sense.
We call it a revolution to help people understand what take-and-bake is. It makes them ask what’s revolutionary about it.
And the answer is what I shared earlier about what growing concepts like Chipotle, In-N-Out and Chick-fil-A have in common. What’s really popular right now is the idea of food-forward design. It’s high-integrity ingredients, food prepared in front of you, and focus. They’re brands that don’t try to be all things to all people.
When you see who comes and goes [in the industry], the real trends right now are moving toward food and the wholesomeness of food.
It fits our brand well and it’s a good first start. We want to continue to grow and build that message.
How have commodity costs affected Papa Murphy’s?
Cheese costs are high right now. We use a high-quality cheese and we use a lot of cheese on our pizzas. Other ingredients like beef are high as well, but cheese is probably biggest challenge.
When you get pressured by commodity costs, you need to do two things: you need to keep a long-term perspective and don’t compromise product quality.
Higher commodity costs challenge franchisee profits, so we have kicked off a franchisee profitability initiative. It’s about strategically looking for opportunities, whether that’s in menu mix, or the new product pipeline, or store contributions and how you educate franchisees on how they can run more efficiently. We set up a task force team and we’re developing and testing initiatives to help us from a profitability standpoint.
We also have some very strong entrepreneurs in our system, and, as I get out to visit them, I’m amazed at the different ideas that some do in their markets, but not nationally. To me, there’s a whole new layer of sales growth possible by asking them to share their ideas on a national basis.