Convenience, customization behind the rise of take-and-bake concepts

 
May 14, 2014

By Holly Freeland

Plenty of evidence suggests that take-and-bake is the fastest-growing segment in the crowded pizza space, and that’s why numerous concepts are trying to leverage the offering. Currently, Papa Murphy’s is the only national brand, while smaller regional and local TnBs are popping up and expanding their footprints.

Papa Murphy’s is a good model to follow, having recently gone public and growing its sales by 6.3 percent from 2012 to 2013, according to Technomic research. The concept, which first opened in 1981, had more than 1,400 stores in 38 states at the end of last year.

Other carry-out, dine-in and delivery concepts are jumping on the TnB bandwagon, such as Uncle Maddio’s (which has had TnB since it first opened in 2008) and zpizza, which added the option earlier this year.

Noble Roman’s added TnB in October 2012 and has since intensified its focus on the offering. CEO Paul Mobley said its first standalone TnB franchise generated an operating profit margin of 26.5 percent within the first month.

Consumer appeal

The growth of take-and-bake sales and concepts is largely driven by consumer demands. Mobley said his company is strategically positioning itself in the take-and-bake space for a number of reasons: carryout concepts are in step with consumers' time-pressed demands, startup costs are lower than traditional units, and take-and-bake concepts can accept food stamps, which are currently used by about 47 million Americans.

Eli Rosenberg, from market research firm Food Genius, adds that the rise in take-and-bake is fueled by consumers’ desire for a mix of convenience, freshness and customization without sacrificing too much on price.

"Take-and-bake pizza offers consumers the ability to customize their crust and, more importantly, how much or how little of each topping makes it onto the pizza. It also offers a higher level of freshness in contrast to delivery and take-out,” he said.

According to Technomic’s Darren Tristano, ease and handiness are big factors in the TnB movement, and also explain why Papa Murphy’s has been on a growth trajectory. 

“The popularity of take-and-bake pizza is based on the convenience of the product (cooked fresh in your own oven), the value (based on price vs. casual dining restaurants or delivery fees) and the quality of the product (perceived by customers as higher than major national chains). Ultimately the ability to order a customized pizza, pick it up conveniently, refrigerate the pizza and bake and serve it in your home and have fresh out-of-the-oven pizza that hasn’t been delivered is essential to Papa Murphy’s success,” he said.

In addition to convenience, putting the customers in control of the entire experience is also a big selling point, according to Jim Jagers, CEO of Mama Mimi’s, a regional TnB concept based out of Ohio.

“With most of our customers being high activity families, it is important to us that we can provide them with a quality meal that can be pulled hot out of the oven, on their time schedule. It is truly a homemade experience within their own kitchen, all they have to do is preheat the oven. There is really no comparison in putting one of our pizzas side by side with that of a delivery pie,” he said.

Jagers adds that many TnB’s offer more variety than traditional delivery concepts. Mama Mimi’s, for example, includes seven homemade sauces, three crusts (including gluten-free), and more than 40 ingredients. Papa Murphy’s also boasts choices such as ethnic pizzas and flavors, Chicago-style stuffed pizzas and mini pizzas for kids. Take-and-bake concepts are also adding sides, salads and desserts to provide a complete home-dining experience.

Operational simplicity

For the pizza makers themselves, the take-and-bake concept makes sense from an operational standpoint. Since the customers take over the majority of the experience, operational costs are kept to a minimum; there’s no need for ovens or other costly equipment.

There are also fewer employees at each location and there’s no need for delivery or service staff, keeping payrolls lower than the traditional pizza models. Lastly, from a brick-and-mortar standpoint, there are no dining spaces, keeping real estate costs lower.  

Difficult to replicate on a mass scale

While the pros of TnB seem to outweigh the cons, the threat of competition always looms large in the pizza space. However, that doesn’t mean the big delivery players or even smaller regionals are going to add TnB to their menus anytime soon.

“What makes Mama Mimi's different from the rest is that we provide a very high level of engagement with our customers. We have a relationship-based business, not a transactional based business – and therein lies the difference. Sometimes that can be a difficult thing for many to replicate on a mass scale,” Jagers said.

Tristano agrees it would be difficult for larger chains to add a take-and-bake model.

“The larger national chains would have to retool their programs and image to provide take-and-bake. It would likely cannibalize their baked pizza sales and confuse the customer,” he said, suggesting many of those concepts have instead relied on transitional strategies for success, such as retail.

Holly Freeland is a contributing writer for PizzaMarketplace.com.

 

 

 

 

 


Topics: Customer Service / Experience , Food & Beverage , Operations Management , Papa Murphy's Take 'N' Bake Pizza , Trends / Statistics


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