Jan. 10, 2010
Last year and the beginning of this one has been an interesting mix of highs and lows for many in the pizzeria industry.
The new year brought in a new CEO for Domino's, having just lost their former one to the University of Michigan's athletic department on the eve of an earthshaking recipe change. Meanwhile, Pizza Hut's profitability has floundered for what its largest franchisee, NPC's Jim Schwartz, conveyed as a failure to connect with its customers, leaving the company's chief marketing officer, Brian Niccol, with a lot of work to do. Can he and our other contentious leaders do what's necessary in 2010?
Read on for more on who and what to watch in 2010.
Papa Murphy's -- John Barr, CEO
While most of the pizza industry crept along the past two recessionary years, Papa Murphy's has bounded. In 2008, it achieved the third-highest growth in estimated sales per unit among the country's 100 largest foodservice chains. That translated into four times the growth of its nearest competitor. And last year, a Zagat reader survey placed the chain with the likes of In-N-Out Burger, Chipotle and Panera Bread, as one of the top best-in-class chains nationwide.
Make no mistake -- it is Barr's six-year reign that's ushered this well-positioned take 'n bake leader along. After president Clarice Turner and CMO Ann Stone both resigned in early June 2009, Franchise Business Review's Eric Stites said he expected franchisee satisfaction to plummet, as often happens. That didn't happen, because of Barr's continued reign.
"We surveyed their franchisees in late June and July of this year and their satisfaction is extremely high across the board -- 14 percent above our QSR benchmark, which is significant," Stites said.
News came earlier this fall of Papa Murphy's International's impending sale, for reasons undisclosed. Though Barr won't reveal any potential buyers, he does say his continued reign depends on how much of a "good fit" the potential buyer has with his leadership style. If it's not, expect to see this fearless leader making major headway with his next company (and not necessarily in the food industry; Barr was formerly President and COO of Quaker State oil).
In the meantime, we asked Barr if we could expect to see any diversification or augmentation from the company, given the wild popularity of both retail and take â€˜n' bake pizza this year.
"We're always pushing ourselves on new product development, trying to speed up our process, make our testing methods as sound as possible, and we have several new product intros slated for the next 12-18 months," he said. "Stay tuned!"
Pizza Hut –- Brian Niccol, CMO
Brian Niccol, Pizza Hut's chief marketing officer of two years, is a busy man. Though it's said he spearheaded the development of Pizza Hut's award-winning iPhone app and introduced the idea of the now-popular "Twintern" (or Twitter intern) in 2009, some still gave his area of operation bad marks. Jim Schwartz, CEO of NPC International, Pizza Hut's largest franchise group, called for the company to find better ways to connect with customers after last year's poor financial performance.
Niccol just wrapped up a hunt for the company's new ad agency, deciding on New York-based The Martin Agency in November. Exactly what Niccol is planning with them isn't clear, but a theme of transparency certainly resonates with the shell-shocked American public and contemporaries' current strategies. Plus, it seems a natural next step for Niccol's efforts heretofore. Maybe we'll see some commercials of people squealing with joy over that wildly popular ordering app.
Domino's Pizza –- Patrick Doyle, CEO
|story continues below... ||advertisement|| |
| || |
|This story and all of our great free content is supported by: || |
| || ||Speedline Successful restaurant professionals know that solid systems drive profits. That's why SpeedLine is the #1 most recommended pizza POS of the top pizza companies. || |
| || |
Patrick Doyle has just replaced David A. Brandon as CEO of Domino's, after the latter announced his decision to leave the pizza company to work as athletic director at University of Michigan.
But Doyle and Brandon couldn't have more different backgrounds. Whereas Brandon came to the company as a CEO, Doyle has been with the pizza company for 12 years, having started in marketing.
It makes sense, then, that he assumes the helm during the ad campaign highlighting customers' dissastisfaction with the previous pizza recipe. It appears Doyle had a lot of participation in the decision to launch a new pizza and campaign. He says we can see more of that open communication from the company in the near future.
"You will absolutely continue to see us be honest and transparent with people," he said. "This is a huge change with our business."
But whether he will continue to stay the campaign course after the criticism rolls in remains to be seen. Such "openness" with customers inevitably opens a company to ridicule. Steven Colbert recently made light of the new commercials, for example, saying they admit having willfully sold a subpar product, then marketed as tasty.
Which begs the ironic question for consumers: Why should they believe the brand now?
Pizza Patron – Guillermo Estrada, president, and Antonio Swad, founder
Guillermo Estrada was made president of Pizza Patron in the fall of 2009. Now he and founder Antonio Swad share an office, where they've been calling successful shots of this recession-bucking eatery.
They're going to need the dual braintrust. Hope in and eyes on "alternative markets" are currently high due to a post-recessionary call to diversify. Lucky for Estrada and Swad, the Hispanic market and spending trends are actually only nominally "alternative." In fact, The Latinum Network recently published a report that attributed an inordinate amount of food spending to Latin Americans: From 2007 to 2008, U.S. Hispanic consumers were responsible for 30 percent of the $40 billion growth in the food business.
The two are also pushing Pizza Patron into unconquered subgenres of their demographic -- beyond the brand's stronghold of Mexican areas. We expect some impressive gains in brand recognition and expansion this year. Estrada and Swad just introduced the company to Cuban-heavy Florida.
Estrada has said they're still perfecting the flavor profiles for their expanding demographic, so expect to see new locations and innovative toppings and sides that could reinvigorate the segment in the coming year.
Cici's –- Michael Shumsky, CEO
Michael Shumsky's first item of business after he became CEO last October included a mission to meet directly with the majority of Cici's franchisees. A major company restructuring was the result, aimed at achieving quality control across the board and to be especially responsive and standardized to consumers.
That solid foundation will help support the tweaks Shumsky will inevitably start making this year. Some problems that have plagued the company include the temptation to raise its low prices as the economy starts to rebound. Some have criticized Cici's for what they deem a subpar buffet lineup and taste profile. Perhaps Shumsky's previous experience at La Madeleine, Johnny Rockets and Sonic will provide for some cross-referenced inspiration. We wouldn't be surprised if Shumsky and co. solved these two problems by introducing some premium higher-priced menu items, leaving the rest of the menu mostly intact.