Pizza Hut is launching what it calls the biggest-ever reformulation of its most-popular pie: the hand-tossed pizza.
The chain Thursday is introducing a new version of its hand-tossed pizza with what the company says in ads consists of a "lighter, airier crust, cheese blended with five Italian flavors and now brushed with garlic-buttery goodness." The sauce will remain the same, and the reformulated pizza will have an introductory price of $10, including toppings.
Marketing for the new pizza was created by the chain's agency, Dentsu's McGarryBowen, which picked up the account in September. Since McGarryBowen has been on board, Pizza Hut has been marketing itself around the idea of "greatness." In one TV spot introducing reformulated pizza, a voice-over says, " When it comes to pizza, you don't want the same old, same old -- you want greatness. Which is why at Pizza Hut we're blowing the world of hand-tossed pizza sky high." As the voice-over is narrating, an explosion of a pile of pizza boxes occurs.
The campaign will include advertising, social media, PR, point-of-sale, a new box and an internal training program for the chain's crew. The chain is expected to up its digital, social media and mobile marketing for the push.
Pizza Hut claims the pizza looks noticeably different and less formulaic. "[The new pizza] completely different," said the chain's Chief Marketing Officer Carrie Walsh, who took the post just this month. "It has imperfections. Customers definitely noticed a difference. We believe it's a game-changer."
Millennial appeal
The new product comes as chain restaurants scramble to appeal to millennials and adapt to changing consumer preferences in general. Research on millennials generally finds that they favor fast-casual chains over fast-food chains and that they like convenience, premium ingredients, choice and healthier offerings.
"We think this pizza will really appeal to everyone, including the millennials who are driving a lot of the cultural and taste changes," said Ms. Walsh. (It's non-hand-tossed offerings include pan, thin' n crispy and stuffed-crust pizza.)
Many major chains have been marketing food as more artisan and handmade. It remains to be seen how consumers will respond to Pizza Hut's new pizza with "imperfections," but "consumers at large are more interested in the artisan trend," said Kelly Weikel, senior consumer-research manager at Technomic. "Consumers are interested in the idea of 'real' and 'unprocessed,' and if the crust looks more artisan it could be connecting on those levels."
Of course in the chain-restaurant business, the key is product innovation. Pizza chains like Pizza Hut and Domino's have over the years branched out with sandwiches and desserts. "The fact that they're bringing something new is the big thing because it's such an established brand. Bringing something new is important in creating customer interest, and this might be needed to reinvigorate the brand," said Ms. Weikel.
By the slice
Aside from the reformulated pizza, the chain this week began testing pizza by the slice in two markets in Nebraska and Rhode Island. Each slice coasts between $2 and $3 and take around three to four minutes to heat. It's not yet clear when or whether the slices will be offered nationally.
Reformulating a core product can be a risk if a chain has a loyal customer base. But Domino's launched its reformulated pizza in December 2009, and marketed it with admission that its previous pizza was terrible. That move helped turn Domino's sales around. In the first full quarter the pizza was available, sales were up 14%.
Pizza Hut is by far the category leader. In 2012, it commanded the pizza segment with 17.1% share and a 4.2% U.S. systemwide sales increase to $5.7 billion, according to Technomic. Domino's is the No. 2 player in the category with 10.5% market share and a 3.1% increase in sales to $3.5 billion. Papa John's is No. 3 with 7.3% market share and $2.4 billion in sales.
The most recent quarter, however, did not fare as well for Pizza Hut. The third quarter saw a 1% decline in same-store sales in the U.S. while Yum Brands siblings Taco Bell and KFC saw 2% growth and a 4% decline, respectively.
Pizza Hut spent about $239 million on U.S. measured media in 2012, up 8.6% from $220.4 million in 2011, according to Kanta Media. From January through September 2013, the chain spent about $183 million. In 2012, Taco Bell spent $280 million and KFC spent $263 million.
