Pandemic pizza boom has brands competing for larger slices of the pie
Panera Bread is adding flatbread pizza to its menu, diving into a competitive space as pizza sellers from restaurants to frozen brands have seen sales soar during the pandemic.
Panera’s flatbread pizza is a way for the chain, which already sells plenty of bread and has cheese and other toppings in its other menu items, to use on-hand ingredients in a different way.
Pizza is also an easier dish than others for carryout and delivery, which have taken on new prominence as people spend more time at home. Chains including Domino’s have been posting record sales. At the same time, frozen pizzas, including those with some better-for-you traits, have been hot sellers.
Panera tried to sell a pizza-like product more than a decade ago, but struggled with the prep time it required and speed of service, says Sara Burnett, VP of wellness, food policy and public affairs, So, why does Panera think that it can play a role in the pizza category?
“Our guests have been asking us to launch into that category, into pizzas, for quite some time now,” says Panera Bread Chief Brand & Concept Officer Eduardo Luz.
Panera saw very promising interest and results from a flatbread pizza test in 2019 into 2020, Luz says. Then, the coronavirus pandemic disrupted the restaurant industry, leading to the rise of more delivery and carryout, as well as a drop in lunchtime orders across chains including Panera because office workers were staying home.
The sudden spark in “off-premise” dining made it a more compelling time to launch pizzas, says Luz. At Panera, which doesn’t disclose total sales, delivery is growing at a triple-digit clip, while rapid pickup and drive-thru orders are up double digits, says Luz.
“Propelled by off-premise, we are seeing sequential improvement every week on our business,” he says.
As people are at home, more orders are shifting later in the day.
“We believe that flatbread pizza is a great solution,” says Luz, who contends Panera’s lineup is differentiated from other pizzas in the U.S. He says Panera's use of “00” flour finished with olive oil, fontina cheese and grape tomatoes makes it more like the pies found in Italy.
Luz—who joined Panera in May—says that rather than focusing on rivals including long-established pizza chains or pizzas purchased in grocery stores, Panera is focused on winning over diners, including those who might add a flatbread pizza to an existing order. The chain’s marketing comes from Goodby, Silverstein & Partners.
The products, which start at $7.99, are positioned as a generous portion for one, or something to share, perhaps with a salad or soup on the side—items that are already strong sellers for the chain.
Panera teased the products on social media. A post on Monday stated, “Something new is coming. And it's cheesy.” On Tuesday, it posted, “Planning to dress up as our new menu item for Halloween? Hint: It’s gonna be saucy.”
Panera’s pizza flatbreads—cheese, margherita and chipotle chicken-and-bacon—face plenty of competition from pizza purveyors, which have already proven pizza’s delivery prowess. Domino’s even called out the poor delivery of other items, namely soggy burgers and tacos, in a “designed for delivery” campaign that began running in August for its cheeseburger and chicken taco pies.
Sales across the industry are solid. Domino’s U.S. same-store sales jumped 17.5% in the third quarter, marking the chain’s 38th consecutive quarter of U.S. same-store sales growth. Pizza Hut’s second-quarter U.S. same-store sales rose a less impressive 5%. And smaller rivals are growing fast. Papa John’s preliminary third-quarter U.S. same-store sales soared 23.8% from a year earlier.
At-home competition rises
Meanwhile, frozen pizza has also been a go-to item during COVID-19. Dollar sales across the category jumped 18.1% to $5.94 billion in the 52 weeks ended Oct. 4, according to data from Chicago-based IRI. Nestlé, the top marketer in the category led by brands such as DiGiorno—which has been promoting a pizza with a croissant-style crust—controls more than 39% of the market.
Banza, a brand best known for chickpea-based pasta, just entered frozen pizza with pies and pizza crusts featuring chickpeas—and no traditional flour. Banza began working on pizza in late 2019, says Nicole Landsman, VP of marketing. “Our product strategy is really trying to understand the different foods people love most but often avoid,” she says.
Banza’s pizza marketing, cooked up in-house, suggests that rather than designating one night per week for pizza, people can have pizza nightly because it has fewer net carbs and more protein than traditional pizza, and is gluten-free.
Banza's push includes YouTube ads, taxi-style ads topping Lyft vehicles in New York and social media. Banza counts Enlightened Hospitality Investments, an investor affiliated with Danny Meyer's Union Square Hospitality Group, as one of its backers. Meyer posted about the pizza this month on Instagram.
Even brands that have long held their spots in the pizza industry are stepping up their game. Hormel introduced pepperoni that cups and crisps more like pepperoni on a pizzeria’s specialty pie. Cup N’ Crisp, which curls as it cooks, was announced in March, just before people began spending more time at home. In October, Hormel held a Zoom cooking class for bloggers, chefs and others who prepared their own pizzas at home, using the product as pandemic cooking boredom set in.
And Caulipower, which launched its cauliflower crust frozen pizzas in 2017, is among the frozen brands seeing sales rise during the pandemic.
“We’re very fortunate to be a frozen pizza brand during this time,” says Jaimee Padveen, head of brand creative and experience at Caulipower.
Caulipower’s crust sales jumped 107% in the 52 weeks ended Oct. 4, Padveen says, citing SPINS Mulo data. And according to IRI, its frozen pizza sales rose 7.4% during the 52 week period.
Now, Caulipower is hyping its pizza, chicken tenders, tortillas and now riced cauliflower bowls, for people seeking more variety in at-home dining. A new spot thought up in-house running on Hulu marks the brand’s largest media buy to date.
Caulipower is also shipping $39.95 kits including its new riced cauliflower, a cookbook, three coupons and accessories including a candle, marking its first direct-to-consumer sales. The move follows trends it saw in research, which found nearly 40% of Americans were sick of their own cooking. It also introduced two new pizza flavors, buffalo style chicken and sriracha veggie.
Padveen expects there is enough room for competitors to focus on different nutritional aspects. After all, people clearly like pizza.
“From a consumer standpoint, brands are finally innovating and listening to what consumers want,” she says.