'Co-opetition' crucial for pizza industry to thrive

'Co-opetition' crucial for pizza industry to thrive
Tags: Associations, NAPICS, National Restaurant Association, Operations Management
March 2, 2009 - Richard Slawsky

Dawn Sweeney, president and CEO of the National Restaurant Association, delivered the keynote address, "Collaboration is the Key," at the North American Pizza and Ice Cream Show, held Feb. 22-23 in Columbus, Ohio.

In her address, Sweeney talked about "co-opetition" and the importance of operators working together to survive. "The success of this aggregate industry is built restaurant by restaurant," Sweeney said. "There is no question we are weathering stiff challenges," she said. "Leveraging our collective assets in a situation like this is key, and never more key than when facing these types of economic challenges."

The term "co-opetition," which Seeney mentioned in her address, comes from a 1997 book of the same name written by business school professors Adam Brandenburger and Barry Nalebuff.

According to the authors, although some people see business as waging war and assume they can't win unless somebody else loses, competitors can actually work together on some issues in order to thrive.

The industry is facing its toughest time in 40 years, and one-time competitors can find themselves united against common foes. Operators must find new and creative ways to bring people back into restaurants and to fend off changes that may prove costly, Sweeney said.

"The only way I think we can fully be effective is through deeper and more earnest collaboration," she said. "(That means) working across the whole chain from supplier to distributor to operator to consumer and identifying how we can come together in brand new ways."

There are critical issues facing the industry, including labor and food safety issues, and recent action by state and local governments related to menu labeling. Anything that has the potential to raise costs for the industry is of concern to everyone, she said.

"Although we are lying awake at night trying to figure out solutions for ourselves, someone else is lying awake trying to come up with solutions that ultimately may not be intended to hurt us, but that are going to hurt us," she said. "We have to solve these problems before somebody else tries to solve them."

Helping the competition

For Ann Reichle, chairwoman of the NAPICS show and operator of Angelina's Pizza in Olmstead Falls, Ohio, the concept of collaboration has been top of mind lately.

As show chairwoman and a fixture with the Ohio Restaurant Association, Reichle often finds herself providing advice or support to an operator who may also be a competitor.

"I can't think of anything I enjoy more than helping others succeed," she said. "I'm probably in the wrong business. I should probably take up missionary work. I feel we all need each other."

Likewise, Scott Anthony, operator of Fox's Pizza Den in Punxsutawney, Pa., spends what little free time he has offering tips to operators at restaurant show seminars, particularly on how an operator can better manage and promote their business.

He isn't worried about somebody using those tips to compete with him, he said.

"I feel that a copycat will not be a threat as they will never be taken seriously, while someone who applies sound principles to their business does have something to offer," he said. "Hopefully, new businesses will find their unique niche and be able to make their own contribution to the industry."

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Craig Moore, CEO of CiCi's Pizza, believes operators can build their business in part by building the restaurant industry as a whole and in particular the pizza segment. Moore gave a speech on the topic at the 2007 International Pizza Expo in Las Vegas. This week, CiCi's is sponsoring a Restaurant Business Conference at the Hyatt Regency Lake Tahoe Resort, Spa and Casino in Nevada.

While the first day of the conference is devoted to CiCi's operators, the second day is open to the public and will feature sessions on SBA lending, a commodity outlook, loss prevention and other seminars designed specifically for the restaurant industry.

"We need to work together to strengthen our industry," Moore said. "It's important to us, as an industry leader, to offer a powerful agenda that positions our industry to prosper."

And this summer, the Pizza Executive Summit (sponsored in part by Pizza Marketplace parent company Networld Alliance) will bring together C-level executives from pizzeria chains throughout the country to collaborate on finding solutions to the common problems facing the industry.

"With challenging times in front of us, the restaurant industry is in a new era of management tactics," said Paul Barron, publisher of Fast Casual magazine and one of the organizers of the Pizza Executive Summit.

"What that means is that you have the potential for special events like the Pizza Executive Summit and the CiCi's event to start the process of creating a global village inside the restaurant industry," he said. "The concept of competitors sharing information has happened in a lot of industries. In most cases, it's simply the sharing of ideas that can lead to bigger ideas within each organization."