In 1990's Teenage Mutant Ninja Turtles, Michaelangelo gives his delivery man some sage advise: "Forgiveness is divine, but never pay full price for late pizza." Although he was speaking to a local pizza delivery man, he was right: Americans want their pizza, and they want it now. According to Technomic's Darren Tristano, fast-casual pizza chains are on the rise across the nation.
According to the research firm's Top 500 Chain Restaurant Report, fast-casual restaurant sales grew at a rate of 11.5% as a whole in 2015, while the rest of the industry grew at a rate of only 4.1%. Tristano argues that while certain segments, including Chicken and Asian cuisine, helped propel that growth, assembly, line-style, custom-built pizza chains were the most important growth factor. In a piece for Forbes, Tristano writes:
"Three of the five fastest-growing brands in the Top 500 were fast-casual pizza chains—Blaze Pizza (with year-over-year sales up 205% in 2015), MOD Pizza (up 131%) and Pieology Pizzeria (up 67%). These stellar sales performances propelled Blaze Pizza and MOD Pizza into the Top 500 Chain Restaurants ranking (determined by U.S. sales) for the first time. Their and Pieology’s explosive growth is even more impressive when considering the short amount of time it took these chains to reach these numbers. Just five years ago, MOD Pizza had only five locations and Pieology Pizzeria was gearing up to open its first unit. Segment leader Blaze Pizza—which toppled past $100 million in sales in 2015—didn’t debut its first restaurant until 2012."
A number of factors converged to help power this explosive growth: customization plays a key role in the popularity of fast-casual pizza brands. But unlike other fast-casual segments, customization has long been associated with pizza. Tristano argues that assembly-line style ordering gives customers the opportunity to enjoy their favorite crust, sauce and toppings with an emphasis on freshness that can be handed to the customer in a relatively quick amount of time. Pizzas are typically ready in under three minutes, a timeline I'm sure even the voracious Michaelangelo would be okay with.
Their growth also coincides with a spike in pizza consumption across the U.S. According to Technomic's 2016 Pizza Consumer Trend Report, pizza consumption is at it's highest level in the past four years. Consumers averaged 4.0 pizza occassion per month in 2015, up from the 3.4 occassions encountered in 2014. These customers are also a bit more sophisticated, looking for offerings beyond the typical large, cheese pie. As Deanna Jordan, manager of consumer insights at Technomic, explains:
“Today’s consumers are less beholden to their standard pizza orders, as emerging players push the envelope of what’s expected on a pizza menu...New chef-designed specialty pizzas positioned as customizable thought-starters will serve to convey kitchen skills and allow for the personalization these consumers increasingly expect.”
The report elaborated on consumer tastes as 39% of consumers reported that new and innovative toppings are highly important in creating a good pizza in 2015, up from 32% in 2013. In addition, more consumers are demanding transparency in the pizza occasion with 32% of consumers saying it’s important to know the nutritional content of the pizza they eat, up from 25% in 2014.
The fast-casual custom-built pizza segment remains in its infancy, it representing a very small share of the overall, mature pizza market. It seems unlikely that the dozens of fast-casual pizza eateries popping up in regional markets will be able to survive on a national scale, and the best will likely partner with strong developers to gain the experienced leadership to expand at a sustainable pace. If these fast-casual restaurants want people to keep returning to fuel further sales growth, Michaelangelo's friend Leonardo can offer some advice on how fast customers will return:
"Well, that depends on how fast you restock your pizza..."