Pizza Fusion: From green to black

Pizza Fusion: From green to black
Tags: Operations Management
September 19, 2007 - Richard Slawsky

In the business world, the term "environmentally friendly" often goes hand in hand with the term "government subsidies," but organic pizza chain Pizza Fusion is working to prove that doesn't have to be the case.

Pizza Fusion cofounders Mike Gordon and Vaughan Lazar are working to build their business on the motto, "Saving the Earth, One Pizza at a Time." Along the way, they're working to prove that green environmental practices can be used to generate green of a different sort.

"Preserving the environment is something we're passionate about," Lazar said. "We went to great lengths to develop a business model where social responsibility is just as important as profitability."

The Fort Lauderdale, Fla.-based chain, which opened its first restaurant in February 2006, has two units in operation and two more slated to open by the end of 2007. The company has contracts for more than 60 franchised units in seven states.

Pizza Fusion serves a variety of sandwiches, wraps, salads, desserts, beer and wine all made with all-natural and organic ingredients. The restaurant's specialty is organic pizza available with an assortment of gourmet toppings, such as wild-caught Key West shrimp, New York strip steak, prosciutto, artichokes and arugula.

The restaurant also offers gluten-free pizza crusts and soy mozzarella cheese.

Along with its organic menu, Pizza Fusion's environmental efforts include using only eco-friendly cleaners to sanitize its stores, providing organic cotton uniforms to employees, constructing restaurants with renewable, recycled and reused products, recycling restaurant waste and giving customers discounts for bringing pizza boxes back for recycling.

Additionally, Pizza Fusion purchases renewable wind energy certificates to offset 100 percent of power consumption at its stores and corporate office. Even its Web site is hosted by a "green web hosting" service provider that's powered by renewable energy.

"We were living our lives this way before we started the concept," Gordon said. "This just came natural to us."

Learning a simple business the hard way

Lazar and Gordon, friends since college, had been searching for ways to translate their interest in environmental causes into a business opportunity. Both had prior restaurant experience, and both felt that a pizzeria would be the easiest way to start.

The pair hired pizzeria consultant "Big Dave" Ostrander to assist in developing the menu.

"We had the marketing down, we had the concept, and we just assumed that pizza would be fairly simple," Lazar said. "We were sadly mistaken."

In addition to facing pizza-business challenges, Gordon and Lazar had to persuade vendors to carry the types of environmentally friendly products the pair wanted to use. They met with officials from Riviera Beach, Fla.-based food distributors Cheney Bros. Inc., who agreed to stock the supplies need to support the fledgling operation.

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"We were the new kid on the block, with one 850-square-foot store and we were trying to demand that they bring in a whole different line of food, a whole different sector, really," Lazar said. "Just like everything else we had done up to this point, we were determined to keep working with people until we found people that really believed in what we were doing."

By all indications, Gordon and Lazar adopted their environmentally friendly business model at an opportune time. According to a report in the Wall Street Journal, green equals black when it comes to the bottom line. And companies ranging from mom-and-pop outfits to General Electric are hopping on the green bus in an effort to drive profits.

GE expects to sell $14 billion worth of environmentally friendly products this year and projects at least 10 percent annual growth in the category.

"The idea of using environmentally friendly products is getting out to operators and pretty soon everyone is going to be riding the wave," said Tom Ryan, supply specialist with Odenton, Md.-based KeyImpact Sales & Systems. KeyImpact supplies restaurant operators with biodegradable containers similar to those used by Pizza Fusion.

Taking green nationwide

Earlier this year, Gordon and Lazar decided to try their hand at franchising the Pizza Fusion concept.

Michael Block, along with Jeffrey and Sandra Yagoda, opened the first franchise Pizza Fusion on March 24, 2007, in Fort Lauderdale.

In August, Pizza Fusion partnered with real-estate firm CB Richard Ellis to help drive the company's expansion across the country.

Lazar and Gordon don't plan to grow the business by trying to compete on price. They would rather position Pizza Fusion as a lifestyle place as well as a pizzeria, Gordon said. A large Surf & Turf pizza, topped with strip steak, shrimp and lobster, sells for $48.

The pair also is eyeing other premium menu additions as well, he said.

"We are not trying to be competitive with price; we are trying to be competitive with value," Gordon said. "That's why our brand is so strong, because it was developed not from a cost standpoint but from the standpoint that this was the correct way to run our business."