Pizza is a staple meal in the American diet. It’s a food category that isn’t going anywhere; that, however, is both blessing and curse. Pizza may be here to stay, ingrained in a family’s meal plan rotation, but the category is also saturated and doesn’t have much room to grow.
“Pizza has matured to the point where the majority of Americans eat it, but it’s hard to grow it,” said Dave Foran, vice-president, sales and marketing, Little Lady Foods, Inc., Elk Grove Village, IL.
According to a June 2014 report on pizza by Mintel, Chicago, pizza at the retail level experienced flat sales between 2009 and 2014. Frozen pizzas controlled 82% of the market in 2014, but Mintel forecasted those sales would decline into 2019. Analysts at Mintel attribute all of this to a recovering economy and growing consumer confidence. When consumers have the money, they will splurge for restaurant pizza rather than “settling” for store-bought.
Pizza manufacturers can use this to their advantage if they invest in quality. Consumers today are looking for upscale food and bringing the restaurant experience home. “Once you start tasting what’s good, you don’t want to go back,” said David Mafoud, principal, Damascus Bakery, Newark, NJ. “Your palate knows it, and you’re not going to go backwards on quality.”
This is most notable among millennials who crave upscale food and innovative flavor combinations. According to Mintel, they are also the most likely to purchase frozen or refrigerated store-bought pizza.
Households with children also offer another demographic for pizza manufacturers to tap for sales. Between children’s love of pizza and parents’ love of convenience, families are ripe for increased pizza sales.
Despite these two interested demographics, market saturation makes it difficult for pizza manufacturers to break through the noise. In order to gain some ground in sales, bakers have to get creative with new products to gain consumer attention.
“We’re also seeing category growth resulting from more experimentation with a variety of types and styles of pizza doughs, crusts and flatbreads,” said Donna Reeves-Collins, director of marketing for pizza and flatbreads, Rich Products Corp., Buffalo, NY. “Innovation continues to characterize the category and is being driven by authenticity, ethnic varieties and flavors from around the globe.”
This creative innovation has manifested itself in the form of new flavors, crusts, sizes and formats. Some innovations are aimed at making healthy claims; others try simply to make mouths water.
Stake a healthy claim
Consumers continue to be intrigued by healthy alternatives and ingredients, but pizza remains semi-immune. According to Mintel’s report, only 22% of respondents said they consider health-related attributes to be important when shopping for store-bought pizza. More than half of the respondents said that it is worth it to pay more for higher-quality store-bought pizza, indicating that consumers are more concerned with quality over nutrition.
However, pizza with better-for-you ingredients or claims can often go hand-in-hand with quality, and nutrition can be a point of differentiation on a supermarket shelf overcrowded with options. A better-for-you option can come in the form of smaller pizzas or labels promoting nutritional value and quality.
Little Lady Foods is finding that shoppers, particularly baby boomers dealing with empty nests, are just not that interested in traditional 7-, 8-, 9- or 12-in. pizzas. They want single-serve and handheld products.
“The bigger pizzas are just not what’s growing anymore,” Mr. Foran said. “The products that are growing are single-serve pizzas, especially 6-in. pizzas with a healthy connotation to them.”
That healthy connotation most often takes the form of a claim or a clean ingredient list. Mintel reported that the top three health-related attributes consumers look for in refrigerated or frozen pizzas are no artificial additives, preservatives, colors, sweeteners; all-natural or organic ingredients; and whole grain crust.
Mr. Foran echoed that finding, saying that all-natural is a claim used extensively across the category, but that gluten-free is also a claim that persists alongside natural and organic — all of which Little Lady Foods is capable of producing.
Organic and gluten-free, however, do not come without challenges. “You have the issue of securing supply as well as storage and handling concerns,” said Vince Nasti, vice-president, operations, Nation Pizza and Food, Schaumburg, IL. That goes for both organic and gluten-free claims. Though both can separate a pizza from the pack and gain the attention of niche consumer groups.
Whole grain pizza crusts aren’t as simple anymore as just switching from white flour to whole wheat. Bakers are branching out to try other healthful options. “People are looking at sprouted wheat, white whole wheat, quinoa,” said Randy Charles, CEO, Alive and Kickin’ Pizza Crust, Green Bay, WI, which has incorporated both quinoa and sprouted wheat into its crusts.
In an effort to make a better whole grain crust, Damascus Bakery started experimenting with whole grains other than whole wheat to find something that would deliver the same bite people expect from pizza crust and an acceptable flavor. After working with quinoa and amaranth, the bakery settled on khorasan wheat, also known as Kamut, which Mr. Mafoud said had the best taste while still delivering a bubbly bite.
Pizza manufacturers can let their creativity take over when it comes to toppings and crust flavors in this over-saturated category. Flavor innovation will be what ropes in the elusive millennial dollars. “Millennials are going to determine the next 20 years in the pizza category,” Mr. Foran said.
According to Technomic’s 2014 The Pizza Consumer Trend Report, millennials were the most likely of any age group to try new regional or themed pizzas, noting their adventurous palates.
All the ways millennials have influenced the food industry are also hitting pizza. “Anything you see in other food categories is what we’re seeing as a trend in the pizza aisle,” he continued. “It’s not directed toward healthy but what millennials looking for.”
This means swapping out mozzarella with goat cheese and casting sriracha as a viable topping. It also means looking outside of pizza’s native Italy for inspiration.
“Pizzas made from the traditional tomato-and-mozzarella foundation are giving way to more complex Mediterranean, Latin and Asian flavors, like tapenade, aioli and Thai prepared on non-traditional bases such as flatbreads, thin crusts, naan and other ethnic breads,” Ms. Reeves-Collins said.
Variety and global/ethnic inspirations are dominating the pizza industry as exhibited by Pizza Hut, Wichita, KS, and a part of Yum! Brands, which just last year overhauled its menu in order to grab these trends by the horns. The pizza chain expanded its crust choices from one to 10, including salted pretzel and honey sriracha; one sauce choice to six; and zero premium toppings to five, including Peruvian cherry peppers. Pizza Hut also incorporated sauces such as Buffalo or balsamic vinegar lightly drizzled on a pizza after it’s baked — a symbol of an upscale, premium product, an attribute that appeals to consumers today.
“Today’s ‘next generation’ pizza consumer is seeking a much more upscale, elegant and one-of-a-kind taste experience, so all these new pizza industry participants will need to ensure they are able to meet the demand consistently,” Ms. Reeves-Collins said.
The importance of quality rings true in the data as well. According to Mintel, in April 2014, 41% of survey respondents said they buy pizzas with naturally rising crusts; 36% looked for pizzas with hand-tossed crusts; 25% buy craft/artisanal pizzas; and 20% buy pizzas with toppings they haven’t tried before. All of this suggests that quality is a priority for shoppers when they purchase store-bought pizza.
Those numbers also indicate that the crust is crucial to purchasing decisions. Pizza manufacturers are finding value in leveraging this importance with crust innovations. Bakers aren’t only getting creative with toppings but also with types of crusts, whether flavored, wood-fired or artisan-style.
“Wood-fired, stone-deck and Neapolitan pizzas are becoming all the rage again in restaurants,” Mr. Charles said. “That’s spurring demand across the channels we service for similar items.”
According to Mr. Mafoud, this can be attributed to consumers wanting to bring restaurant quality home during the Great Recession and also to the globalization of popular culture. “In the past 20 years, people have gotten to know pizza by traveling to New York and Europe, and now we see more artisan pizzerias and bistros,” he said.
To facilitate bringing that pizzeria quality home, Damascus Bakery introduced Brooklyn Bred, a crusty fermented pizza base that consumers can purchase to create their own pizzas at home. “Every pizza starts and ends with the crust,” Mr. Mafoud explained. “Everyone has ideas about pizza, so we’re giving them the most important and difficult component, the crust. The rest is simple.”
The rectangular shape of the crust even facilitates creativity in toppings, he asserted. When confronted with a round pizza crust, people default to tomato sauce and mozzarella. When confronted with Damascus Bakery’s rectangular crust, consumers feel free to use their imagination in creating their pizzas.
“They’re incorporating their secret recipes,” Mr. Mafoud said. “They’re putting duck on it, or eggs. They’re opening cookbooks and turning on the Food Network. Now, pizza is a creative entrée. Consumers have taken the most iconic meal on the globe and reinvented it.”
Pizza manufacturers are experimenting with new stuffed crusts as well as flavors incorporated into a crust. These can be any combination of herbs or vegetables, whether powdered or diced. The millennials’ anything-goes mentality gives pizza manufacturers the freedom to try any combination they think will catch consumers’ attention.
“It’s not your standard frozen pizza anymore,” Mr. Nasti said. “It has become more artisan, more authentic looking. It doesn’t look cookie-cutter.”
Beyond the traditional crust
Flavored and rustic crusts can add some interest and authenticity to pizza products, but a complete revamp of the pizza base shakes things up in an otherwise stagnant category. “The carrier remains the number one reason consumers choose the pizza,” Ms. Reeves-Collins said. By rethinking the carrier, or crust, pizza manufacturers can open the door for more opportunities.
Flatbread has been the obvious next step in pizza crust evolution. Traditional pizza crust itself is a type of flatbread, so swapping it out for another type is a logical jump that can add some sophistication and expansion to pizzas. “More often than not, flatbread is associated with pizza,” Mr. Foran said. “It has some kind of connection.”
Flatbreads can take pizza from a gut-filling entrée to a lighter appetizer or sophisticated meal. This variety gives bakers an arsenal of new ways they can adjust pizza toppings to freshen up product lines.
“There is a variety of flatbreads. They’re all a little different, and they are all here to stay,” Mr. Charles said. “People want something unique, which expands the channels we operate in now more than ever.”
New formats of the pizza concept provide the biggest shake up in the category. Mintel’s survey showed that 41% of respondents are interested in refrigerated or frozen pizza that comes in different formats. This most often manifests itself in smaller sizes and hand-held pizza products, often popular with parents as snacks for their children. These new products force manufacturers to branch out from their traditional round products and expand processing capabilities. “Especially for manufacturers who have been running standard pizzas and want to go into snacking or handheld categories. Whether it’s a 3-in. flatbread pizza or an extruded-type product, it’s getting into a different niche, something that may be unknown for that specific plant,” Mr. Nasti said.
Even different meal parts, such as breakfast, provide pizza producers a place to seek out new opportunities. These pizzas often are loaded with cheddar cheese, traditional breakfast meats and even eggs. While they can come in a traditional pizza size and shape, Mr. Nasti said they are more often offered in hand-held formats for convenience.
When it comes to the snack side of pizza, Mintel’s research pointed to protein as a way for the pizza category to gain some ground. While protein remains a powerhouse nutrient in the consumer mindset, in 2014, pizza introductions touting their high-protein content ranked just 0.5% of all new products claiming to be high in protein. With 37% of US refrigerated/frozen pizza users interested in added nutritional benefits and nearly one in five citing protein as an important attribute, Mintel analysts expected this to be a place where pizza manufacturers can grow. Annie’s Homegrown, Berkeley, CA, took advantage of this with the launch of its Mini Pizza Bagels, which boast 10 g protein per serving. This and similar products appeal to consumers’ desires for on-the-go sustenance.
Pizza’s place as a dominant choice for meal times isn’t going anywhere anytime soon, but to keep the category growing, manufacturers have to step it up in quality and variety. “People are becoming more discerning,” Mr. Mafoud said. “People know the difference between different crusts. They aren’t seeing pizza as a cheap filler anymore.”
Opportunity will be found in high-quality ingredients, creative toppings and new ways to eat pizza. Bakers are going to have to be on their toes, in tune with the pulse of consumer tastes, to keep up. “We’re trying to stay versatile and give the market what it wants,” Mr. Charles said. “We don’t know how the pizza category is going to change; we just know that it always is going to change.”