If you study the history of pizza's success in America, it is really a history of the success of America's factories. Sure, there was pizza in New York, but the real mainstream success occurred around the Great Lakes. Auto production was booming in the 1950's and spawned hundreds of other factories, parts manufactures, machine tools, but also washing machines and refrigerators as America flexed its industrial muscle.
The "Big 4" have their roots in Detroit but also in Louisville, Ky., the home of General Electric's gigantic Appliance Park. In the early 50's, Appliance Park was so big, it had its own fire department and zip code. There were 16,000 workers building 60,000 appliances per week. Employment peaked at 23,000 in 1973 and began a steep decline after. Offshore manufacturing became the rage in American business and factory workers lost jobs and income. Pizza's meteoric rise was over and since, a saturated business continues to sputter along.
Fast forward to 2013 and a funny thing is happening, manufacturing is returning to the U.S. There are many factors, a glut of domestically produced natural gas, rising costs in China but most important, the realization by American management, that labor cost is a small component of overall manufacturing costs and American ingenuity and faster to market response is a better mousetrap. In addition, because of the lack of respect for Intellectual Property in other parts of the world, designing and BUILDING at home protects business processes and trade secrets.
After decades of decline, Louisville's Appliance Park has seen employment rise from a low of 1,700 to 3,600. More important, GE recently hired 500 new designers to build new stuff HERE. Ditto auto manufacturing in South Carolina. What does the rise of manufacturing mean for pizza?
Foodservice success depends on disposable income. No one NEEDS to go to restaurants, we CHOOSE to go because our time is short and we have some money in our wallet. It is well documented that as personal incomes rises, restaurant sales increase. A return of "good jobs" to America will increase restaurant sales. If you are in the pizza business, how do you capture this rising tide?
- Improve Quality - the cheapest ingredients are just that – cheap
- Tout Healthy - fresh vegetables – low fat – local produce – gluten-free options
- Increase Variety - more than pizza – entrée salads, fast Italian fare like Panini and baked pasta
- Offer Convenience - online ordering
- Ramp Marketing – new school and old school
- Sell – go out in your community, meet with people and organizations
Life is cyclical, the pendulum swings and America is returning to an age of manufacturing lead by invention and low energy costs. Now is the time to prepare for our back to the future.
Wishing you success in pizza – Ed
Ed Zimmerman is a pizza industry veteran and President of The Food Connector. His almost four decades of foodservice experience includes food manufacturing and distribution leadership, food industry technology, marketing services and restaurant and grocery operations management.