Pizza Industry Report 2011 - Product Diversity, Market Leaders & Business Models

Pizza is at the top of the list when it comes to variety in product offerings. A few of the more popular varieties include:

• Chicago Style: Commonly referred to deep dish pizza, Chicago style pizza is made with a heavy, thick crust and large amounts of cheese, sauce and toppings.
• Detroit Style: A crispy, deep-dish pizza served as a square with toppings such as pepperoni and olives and the sauce on top of the pizza.
• New York Style: The features that distinguish New York style pizza from others are that it’s typically large, wide, thin and foldable.
• Neapolitan: A very traditional way of preparing pizza. Neapolitan pizza is prepared in a unique way to preserve the original flavors of its ingredients. The guidelines are so strict for this form of pizza preparation that there is a certification process for pizzerias through VPN Americas,³ the official American organization representing the Associazione Vera Pizza Napoletana (AVPN), a nonprofit association that strictly safeguards the craft of making Neapolitan pizza. Approximately 50 pizzerias in the United States are VPN certified.⁴

Market Leaders

U.S. Pizza Sales (January 2009-December 2009)

Sources: The NPD Group via PMQ Pizza Magazine, September 2010 Issue

U.S. Pizza Outlets (as of March 2010)

Sources: infoUSA and The NPD Group via PMQ Pizza Magazine, September 2010 Issue

The pizza industry is fairly fragmented: independent pizzerias own roughly 58% of the market. However, the other 42% is made up by the top 50 pizza chains. The top 50 make approximately 48% of the sales, and of these top 50 four companies stand out. They’re known as “The Big Four.”⁵

Pizza Hut

• Largest pizza chain in the U.S.
• Founded in Wichita, Kansas in 1958.
• Operates over 13,000 units.
• Located in nearly 100 countries.

Domino’s

• Second largest pizza chain in the U.S.
• Founded in Ypsilanti, Michigan in 1960.
• Operates over 9,000 units.
• Located in over 60 countries in addition to the U.S.

Papa John’s

• Third largest pizza chain in the U.S.
• Founded in Jeffersonville, Indiana in 1984.
• Operates over 3,600 units.
• Located in all 50 states as well as over 30 other countries.

Little Caesars

• Fourth largest pizza chain in the U.S.
• Founded in Garden City, Michigan in 1959.
• Operates over 2,500 units.
• Located in more than 20 international markets along with the U.S.

Business Models

There are three main types of pizzerias:

• Full service: A full service pizzeria is a sit-down restaurant where the food is served to the table. Many full service pizzerias also offer take-out and delivery services.
• Limited service: A limited service, or fast food, pizzeria usually doesn’t offer table service. Instead the customer will order, pay and collect their food at the counter. There may be casual diner-style seating available.
• Non-traditional location: These pizzerias offer products and services at non-traditional locations including office buildings, shopping malls, stadiums, airports, zoos, convenience stores and similar retail facilities. Non-traditional locations will ordinarily only offer take-out and/or delivery services, but may have sit-down facilities depending on the location.

In addition to the top three business models, there is another way consumers are gaining access to the products of pizza franchises: take ‘n’ bake.

This concept is epitomized by Papa Murphy’s Take ‘N’ Bake Pizza. Papa Murphy gives consumers a Subway-esque experience by offering customers the “unique experience of watching their pizza being made fresh before their eyes and then taken home to bake to perfection – hot out of the oven when they want it.”

³http://www.verapizzanapoletana.org/home.html

⁴http://www.pizzamarketplace.com/article/181981/The-rise-of-Neapolitan-pizza?rc_id=312

⁵http://pmq.com/digital/201009/56.html