Domino's Introduces 'Gourmet' Cheesy Bread

Citing Product's Value, Ads Warn Against Rivals 'Under-Cheesing'

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In an effort to tempt changing consumer palates, Domino's is revamping yet another product: its cheesy bread. The chain today begins selling three "gourmet" varieties -- spinach and feta, bacon and jalapeno and cheese only -- to replace its existing cheesy bread.

"Consumers' palates are evolving to these kinds of tastes, and they're not once-in-a-while things anymore," said Domino's CMO Russell Weiner, referring to ingredients such as spinach and feta. "When we looked to develop these we wanted to appeal to the broadest customer base. We wanted gourmet, and we wanted to have people like it."

Domino's cheesy bread
Domino's cheesy bread

The hope, Mr. Weiner said, is that the new product, along with the artisan pizza line it unveiled earlier this fall, will generate interest in the chain's standard pizza as well.

A national TV campaign from CP&B, Boulder, Colo.,will begin airing Nov. 28 and include Domino's execs Brandon Solano, who recently became VP-franchise development, along with Tate Dillow, program leader-product research and development. In the ad they talk about how "under-cheesing" has swept the industry.

"In this economy, things are bad, people are cutting budgets," said Mr. Weiner. "The normal thing to do is raise prices and reduce quality. We're making a purposeful effort to be on the side of consumers. We could take cheese out, but we put more cheese in and added more gourmet-type flavors."

In this economy, "restaurant-goers are more demanding than ever, closely watching their food-service dollars and actively seeking the best overall value," according to Technomic's recent Flavor Consumer Trend Report. "In this way, flavor is more important than ever before, driving customer traffic, shaping the overall dining experience and helping operators stand out."

The report found that "more than two out of five consumers (42%) say they are more likely to try new flavors than they were a year ago, while 52% express a preference for restaurants that offer unique or original flavors, up from 42% of those polled two years ago."

Mary Chapman, Technomic's director-product innovation, said that the Domino's product may score points with parents who want more upscale taste who are dining out with kids that prefer plain pizza.

Domino's is the No. 2 pizza chain in the U.S., with 11.2% share, according to Technomic. Pizza Hut is the category leader, with about 18.3% share, and Papa John's is third with 7.1% share. The chain in its most recent quarter posted a 3% U.S. same-store sales gain. International same-store sales were up 8.1%.

In a recent note, Janney analyst Mark Kalinowski said: "Domino's appears to be doing an excellent job of retaining new customers who tried the reformulated core product last year, and/or building frequency with its existing customer base."

When asked if any critics scoffed at Domino's use of the word "artisan" for its new pizza, Mr. Weiner was quick to point out that the chain did not take itself too seriously, as evidenced in the marketing. "We're trying to be honest with our customers."

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