The pizza business in America is strong. According to the Smart Flour Foods study, titled Pizza Lovers in America 2015: Unexpected Findings from a Generational Look at Pizza Trends, 35% of Americans go out for pizza and buy grocery-store pizza at least once per month. These customers are also beginning to defy old stereotypes. The study found that 63% of pizza lovers are women, and 41% of those women are millennials. 68% of pizza lovers exercise two or more times a week, and 53% are ages 25-44.
What these numbers are telling us is that the typical pizza fan is evolving. In order to keep up with market tastes, successful pizza restaurants will have to evolve with them. Here are some ways to do that.
According to LevelUp, an American mobile payments platform, customers who have placed an online order visit the restaurant 67% more frequently than customers who haven’t. Major chains have already adapted to this trend, but many independents remain reluctant. Nationwide, independent operators (those with >10 stores) saw sales drop 5.01% while chain operators (<10 stores) saw an increase of 3.38%. Chains also added more stores, with a 7.33% increase to a total of 35,888 stores, while independents saw the number of stores drop 1.85% from 2014 to a total of 38,924. All this data points to a rapidly shrinking market share for independents. They account for roughly 39% of all pizza sales, to 61% for chains.
It’s largely speculative, but it’s a safe bet that online ordering is a big factor. About 50% of all Domino’s sales now come via digital ordering methods, with studies showing that online customers tend to spend more money per order. Essentially, if you’re an independent pizza restaurant that wants to remain relevant in the market, your customers need to be able to place orders online.
Millennials are a generation of foodies. A 2013 study by advertising firm BBDO found that close to 50% of millennials consider themselves a gourmand. These millennial food lovers engage with their food in a much different way than past generations. According to Smart Flour Foods, 54% of millennial have taken a photo of their pizza and posted it online. Smart Flour also suggests that millennials are hugely loyal to brands and restaurants to which they feel a connection. That means that independent pizzerias that move beyond traditional advertising and incorporate online ordering, social media interaction, and mobile technologies into their marketing plan have an opportunity to secure a huge chunk of their potential customer base.
Don't Be Afraid to Raise Prices
From a menu standpoint, targeting millennials means offering fresh, natural, artisanal, and sometimes exotic ingredients. Chances are, these are going to be more expensive than the run-of-the-mill pepperoni you’ve been using. Smart Flour’s study says 77% of pizza lovers said natural ingredients are important to them. 29% avoid meat with added hormones and 28% shun high fructose corn syrup. Cater to these needs and gradually raise your menu prices accordingly. Millennial customers have demonstrated a willingness to pay more money per check if it means a better overall product. Just look at the fast-casual boom!
If you ‘re looking for more news about the Pizza industry, The International Pizza Expo 2016 at the Las Vegas Convention Center, March 7th-10th is a wonderful opportunity. We’ll definitely be there. Check us out at the SinglePlatform booth (#1124) and we can talk about how we can help you.