Pizza is rapidly moving toward a fast casual format, said Darren Tristano, executive vice president of market research firm Technomic, during his keynote address Sunday at the North American Pizza and Ice Cream Show in Columbus, Ohio, where he also discussed frozen dessert trends.
"We're starting to see a 'better pizza' category (similar to the 'better-burger' category created by Five Guys, Smashburger, etc.). These pizzas are made in 3 minutes and they're made to order and this is really an area pizza hasn't seen before, but it's what consumers want," he said. "This will be very strong especially at lunchtime."
Consumers are driving the emergence of "better pizza," artisan and gourmet concepts as they demand more bang for their buck.
"Value-conscious consumers are making judgments about pizza based on what they're actually getting," Tristano said. "Quality is more important than ever."
Tristano outlined other emerging menu trends in the pizza segment, including a bigger focus on chicken as a topping, particularly as barbecue chicken and buffalo chicken offerings. Not only is chicken more cost effective as the price of beef rises, it is also adaptable.
He also said more pizzerias are experimenting with seafood toppings such as shrimp.
"Fresh toppings" requests have risen 6 percent since 2010. Diners also want a large quantity of toppings and cheese, a variety of toppings from which to choose, and new and innovative toppings.
Consumers are also seeking out more premium ingredients than they were in recent years.
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"They want more health-halo descriptors such as all-natural, locally-sourced, healthier components like whole wheat crusts, organic, artisan, gluten-free," Tristano said. "This is good news because it means they're willing to spend more."
Other pizza menu trends include:
- Ethnic toppings moving into the mainstream, such as Papa Murphy's Thai Chicken deLite.
- Artisan and upscale; pushed into the mainstream by Domino's artisan line. "This allows you to sell pizza at a higher price point," Tristano said.
- Pizza providing a platform for other comfort foods, such as meatloaf pizza and mac and cheese pizza.
- Breafast. Some pizza chains, such as Chicago-based Rosati's, are offering morning options to add sales. "This also gives them an opportunity to innovate and will add value to the bottom line," Tristano said.
- Gluten-free is still growing fast. Chuck E. Cheese mainstreamed gluten-free last year, allowing groups to easier choose where to eat if one person is on a gluten-free diet.
- Combo meals have emerged, particularly from Pizza Hut with its Big Dinner Box. "They generate value and put that value in front of the consumer," Tristano said.
- Restaurant to retail. Donato's and Noble Roman's are two examples of brands that have added a take-and-bake line for grocery stores.
- Adult beverage. Tristano said there is a shift toward brewpubs and craft beer. Adding these options to the menu provides a "big opportunity to attract younger consumers with a high-margin item."
Off the menu, consumers want pizza available from a convenient location, good-tasting pizza and pizza at a value.
"Convenience is the primary traffic driver, but it won't provide a strong edge if you don't have a better-tasting pizza," Tristano said.
What about dessert?
The frozen dessert space has gotten increasingly crowded within the past 10 years and competition has flattened sales since 2010, Tristano said.
"The better news is consumers are more optimistic about 2013, by about 4 percent more than they were last year at this time," he said.
Consumers' primary concerns are gas prices (27 percent), grocery costs (26 percent), and their own financial health (26 percent).
"Grocery prices are rising faster than restaurant prices, so for consumers, restaurants are now actually a better value," Tristano said.
While consumers are more optimistic for the New Year, operators have the opposite mentality. The big concern is commodity prices.
"Fifty-four percent (of operators) said they will raise their prices this year. They don't want to, but most will have to," Tristano said. He added that all eyes will be on McDonald's. As the chain bumps its value offerings from $1 to $1.29, it makes other brands more comfortable to inch up prices as well.
Tristano also pointed out that while sales are rebounding from the economic fallout, they're still well below pre-Recession levels. For example, the restaurant industry as a whole experienced 13.5 percent growth in 2007 versus 3.6 percent expected for 2013.
"It will likely take until 2020 to achieve 2007 levels," Tristano said. "But we're headed in a positive direction and that is better than a decline."
Concepts and consumer trends
For the dessert segment as a whole, nothing is more popular than frozen yogurt. Pinkberry kicked off a high-end influx of these concepts in 2005, and was eventually joined by self-service and lower price-point brands such as Orange Leaf.
Also on trend and poised to grow are old-fashioned ice cream parlor concepts (such as Oberweis) and Pino Gelato, as well as international concepts finding their way stateside, like Costa Rica's POPS.
"Many of these provide authenticity, which is what people want," Tristano said. Other trends include:
- Broadening menus to add winter weather business; for example Cold Stone Creamery's cupcakes and novelties lineup. Also, adding complementary offerings such as crepes to go with a gelato, provides more chances to sell during any season.
- The acceleration of breakfast offerings, such as Greek yogurt with fruit.
- Smoothies and other specialty beverages. "They offer portability, and they can benefit from the lifestyle-oriented marketing people want now," Tristano said.
- Catering. Ben & Jerry's is now offering catering, as is Cold Stone. "They said, 'if you're not going to come to us, we will come to you,' and it's a great option for business events, charity events, etc.," Tristano said.
- Super premium. "Raising the indulgence factor and playing with flavor innovation adds an element of sophistication," Tristano said, pointing to Columbus-based Jeni's Splendid Ice Cream as an example.
- Healthy promoted as a lifestyle.
- Letting consumers control expenditures; for example, frozen yogurt concepts, like Menchie's, that allow guests to mix, weigh and pay.
- Community outreach. Yogurtland is a good example of providing philanthropic opportunities for its guests. "It won't necessarily build sales, but it builds an emotional connection for guests and that makes them feel good. It also builds brand awareness," Tristano said.
"Ultimately what operators need to keep in mind is consumers indulge when they go out to eat — they can eat healthy at home. But they want to have healthful options when they are out because it gives them more control over their decisions," Tristano concluded. "Frozen dessert concepts need to be broadening their options to serve more occasions and differentiate."