- WHITE PAPERS
When you think of pizza, you don’t generally think of a drive-thru (a few Little Caesars exempted). Same case for the fast casual segment. But Chicago's Home Run Inn has experienced preliminary success with its weeks-old Melrose Park model, which combines features of fast casual pizza in a drive-thru setting.
But the hybrid shouldn’t be a surprise to those who have followed Home Run Inn, which tends to defy norms. For one, its frozen pizza has the largest market share of any in the Chicagoland area, outperforming national brands such as California Pizza Kitchen and DiGiorno. Its own house label wine brand has also been gaining popularity off premise through a concerted sampling program. What's the latest on these fronts? Plenty.
Home Run Inn has about eight stores in the Chicagoland area, most of them focused on a casual dining experience with a lengthy menu and full bar. But a few locations had been experimenting with some limited-service concepts, and Daniel Costello, president of Home Run Inn, had been itching to do something in the fast casual realm.
The chance came earlier this year, when one of the limited service model’s lease came up at the Jewel-Osco grocery chain, where the brand had been doing a lot of pizza-by-the-slice business that Costello hadn’t felt was reaching its full potential. An Arby’s store in Melrose Park went out of business at about the same time, and Costello and company were intrigued by the possibilities of moving into the space.
“We said, 'let’s run this thing without servers and bartenders, but now we’re going to have a drive-thru,'” he said. “Inside, let’s bring the fast casual concept – we display our pizzas, we’ve got salads, we’re bringing that stuff more up front, so they can see it.”
The fast casual aspects would come from a focus on a simple menu, with freshness of the food being paramount. Costello cited Five Guys as a loose inspiration for such simplicity, and Potbelly or Corner Bakery as the model for the inside look, which he described as “clean and comfy, still tying in all the elements of a traditional restaurant.”
The drive-thru played right into the positioning. Its menu features five flavor slices, and a boiled-down menu of the rest of the brand’s offerings – desserts, pasta and sandwiches – to help speed of service. This helps with the fresh factor. For once the pizza starts to cool down, beyond the 30-minute threshold, Costello said the brand won’t serve it.
“People don’t usually eat [pizza] until about 20 minutes [after they receive it],” Costello said. “So to get it 5 or 6 minutes out of the oven in this drive-thru scenario – it’s good.”
So far, this fast-and-fresh emphasis has worked well for the new “Express” location, which Costello said is in a high-volume area. In the future, they’ll start emphasizing combo meals to build check averages.
The new Express Locations, if successful, could play into the brand’s growth strategy for more units in the future. As it stands now, restaurants make about 30 percent of the brand’s total sales. The other 70 come from the brand’s frozen pizza, which dominates the Chicago market, and also has a presence in Midwestern and Western states, including North Carolina, Colorado, Wisconsin and more.
Director of marketing Gina Bolger said the newest thing in this realm is the way its numbers are turning around. For despite DiGiorno’s high-profile growth at the beginning of the recession, by last spring, the entire frozen pizza category was down by 6 percent. According to Chicago Nielsen data, by this summer, the 26-week ending July 10, results were varied and unstable: Tombstone was down 13.4 percent, Jack’s down 7.2, DiGiorno up almost 4 percent and Home Run Inn up almost 8.8 percent.
But the last four-week period, Bolger said, signified a possible new trend for the brand: Home Run Inn jumped from 25 percent market share to 30 percent market share - a record for the brand. The closest competitor was Tombstone, which came in at 10 percent of the market.
But no elaborate, designer pizza has helped the brand secure this milestone. “In Chicago, our sausage in the most popular pizza,” Bolger said. Outside of the state, it's cheese or pepperoni. The fancier they get with their toppings, she said, the less the product sells.
Bolger said the brand has new products launching in the fall, the details of which are still being worked out and can’t be discussed.
“Healthier options are something we’re watching,” she said. “Not to say we’re launching anything [along those lines].” She notes that the brand was first to use all-natural pepperoni in the frozen pizza retail platform.
Such retail prowess has spilled over into the world of wine. Home Run Inn debuted its house label wine about three years ago in-store; earlier this year, they introduced it to a local grocer. Vice president of sales and finance Kevin Costello said retail marketing efforts to sample the brand alongside pizza in the grocery aisle finally paid off in the third quarter sales. Costello said the chain is looking at the possibility of expanding to other chains in 2011.
He said the crux of the product – and its growth source – has been highlighting how the wines’ formulation complements their pizza. The red is a Cabernet Sauvignon proprietary blend developed with specific varietals for a particular flavor profile, as is the Chardonnay blend.
“They just do a good job of working with pizzas at a price point that is very in line with family dinner at home,” Costello said.
In fact, much that this family does concentrates on the family experience. It’s family-owned and run, something highlighted by Dan Costello’s whole rationale behind the drive-thru concept.
“It’s been great with moms,” Costello, a father, said. “It can be a bear, once you get a child out of the car seat, to get him or her back in.”