Retail pizza and pizza product sales have seen lackluster growth in the past few years. In fact, pizza at retail in the United States experienced a 1.6 percent decline in sales between 2009 and 2014 (estimated), according to “Category Insight: Pizza and Pies,” a November 2014 report from global market research firm Mintel. And sales here are forecast to remain relatively flat into 2019.
Private brands, however, have been a recent bright spot in a couple of categories: frozen pizza and frozen pizza crusts/dough. According to data from Chicago-based research firm Information Resources Inc. (IRI), dollar sales of private label frozen pizza rose 7.8 percent during the 52 weeks ending Sept. 6, while unit sales grew 2.9 percent. And dollar sales of frozen pizza crusts/dough jumped 55.1 percent, while unit sales rose 33.9 percent. (See the table, p. 154.)
Busy consumers see pizza as both an indulgence and a convenience. But they are increasingly turning away from frozen pizzas and refrigerated take-and-bake varieties to the more expensive pizzeria experience as the economy recovers and they can afford what they perceive to be better products.
But retailers could take advantage of several opportunities to grow own-brand sales here. Pizza marketers “should target 18–34-year-old consumers with marketing that aligns with their interests, including pizza with hand-tossed or whole-grain crusts, all-natural/organic/gluten-free varieties, and low-fat/low-calorie types,” Mintel notes. “Brands have an opportunity to increase usage among households with kids by developing more family-friendly and sharing formats — e.g., with accompanying side dishes — and unusual flavor/topping options.”
Dan Gemeiner, director of sales for Russo’s New York Pizzeria, Houston, says retailers also should focus on store brand pizzas that include high-quality ingredients and styles consumers won’t find under a national brand label.
“Consumers are looking for more fresh and natural ingredients and are looking for the restaurant experience,” he says. “Break the traditional cycle of private label trying to knock off a national brand.”
Mike Pytlinski, senior brand director for Palermo’s Pizza, Milwaukee, says despite flat sales overall, there is upward movement in high-end pizzas that consumers consider to be of a better quality.
“That’s where the growth is happening,” he says. “The absolute bottom end is rapidly declining; the middle is churning, and the upper end is climbing.”
Still, even though sales are declining in traditional types of pizzas, pepperoni is still the top seller, and consumers expect it to be in the freezer case, says Justin Ring, director of sales for Nation Pizza and Foods, Schaumburg, Ill.
“The consumers still speak with their dollars, and they’re still buying the traditional ingredients,” he says. “If I can sell that pepperoni pizza, but make the consumer feels better by using minimally processed ingredients, that’s a win.”
Natural, premium rule
Mintel’s pizza report suggests that while consumers are tending to look for healthier options in stores, they see pizza as an indulgence. In fact, “relatively few” U.S. survey respondents say health-related product attributes are important when selecting store-bought pizzas.
Still, 20 percent are looking for all-natural or organic options, and more than half would pay more for premium ingredients that mimic a pizzeria experience, according to “Pizza — US,” a June 2014 report from Mintel.
“Brands that market restaurant-style attributes — e.g., authenticity, quality, greater topping and format variety — can help address foodservice competition,” Mintel states in its November 2014 category insight report.
Jenny Mazzaferro, sales and marketing director for Da Vinci Food Products, Montréal, Quebec, says retailers could build store brand products that meet all-natural preferences. She advises them to start with a good, simple crust.
“Pizza is an all-natural product. It shouldn’t be made with a lot of ingredients,” she says. “It’s flour, water, yeast and salt. The best crusts are the simplest. Everybody wants to get away from words they can’t pronounce.”
She adds that a stone-baked crust that looks hand-stretched also adds to the experience and will draw in shoppers.
Gemeiner says retailers could also tap into the gluten-free consumer base that might normally keep away from pizza. He says the key is to focus on a high-quality gluten-free crust, which will cost more, but will be worth it if consumers find it to be an acceptable alternative to crusts made with traditional flour.
Package, position it to sell
To attract shoppers to trial, retailers also will want to scrutinize own-brand pizza-related packaging and marketing efforts. Pytlinski says that brands that have opted for a pizzeria-style cardboard box have been doing well. He adds that those products should have a window so the product is visible.
“People have said that they like to see the product,” he says. “Consumers have said that reinforces the quality.”
In addition, Gemeiner says, one of the simplest things retailers could do to enhance sales of their pizzas — and of the entire category — is make sure the products are standing up in the case. A pizza lying flat is often overlooked.
“If it’s lying flat, you can’t see the label and you can’t see the product,” he says.
Since pizza is still seen as a meal of convenience for many consumers, Ring suggests pairing store brand frozen pizza with items normally eaten with pizza — salads and wings or other appetizers. Retailers could also stick coupons on pizza boxes giving discounts on beverages or other complementary products in the store.
Mazzaferro says retailers could also offer take-and-bake options or get into the business of making pizzas to order, often for considerably less cost than a pizzeria, while customers finish other shopping. She suggests enticing them just around dinner time.
“Come 5 o’clock, bake up a pizza. You will get that smell going, and then let people try it,” she says.
Annette Johnson, president of Talking Eats, Chicago, says one more key is making sure the store brand option is the more affordable option.
“Pizza is very price-point conscious. Make sure it doesn’t get too costly,” she says.
Do consider developing family-friendly accompanying sides for store brand pizza.
Don’t overdo it when it comes to the ingredient list.
Do consider gluten-free product development with an emphasis on high quality.
Don’t lay frozen pizzas down; showcase the package front.