- WHITE PAPERS
n August 2012 Packaged Facts survey shows that 97 percent of U.S. adults eat pizza, and 93 percent have gotten food from a pizza restaurant in the past 12 months.
On a monthly basis, 27 percent get pizza through restaurant delivery/pickup (which translates to about 410 million pizzas a year), 26 percent through restaurant dine-in, and 24 percent from the frozen food cases.
According to Packaged Facts' new report, "The Pizza Market in the U.S.: Foodservice and Retail," sales at pizza restaurants will reach $36.1 billion in 2012, up 3.8 percent from 2011. At retail, U.S. frozen and refrigerated pizza will register sales of $4.91 billion.
On the restaurant side, although pizza concepts are losing share to other cuisine formats, major pizza chains have continued to grow sales.
On the retail side, private label continues to gain sales -- and steal share -- in each of three mass-market pizza segments (frozen pizza, pizza products and refrigerated pizza).
On store shelves, category growth is primarily on the natural and organic front: Among the top 12 frozen pizza manufacturers, significant growth has come only from Newman's Own and Amy's Kitchen. Others may be catching on to the growth opportunities. For example, Annie's today announced the launch of its new organic rising crust line and Naked Pizza recently jumped into the frozen space.
Additionally, more food retailers are offering partially-baked pizzas in the refrigerated section, attracting price-conscious, convenience-seeking consumers who crave a quality pizza at a lower price, according to a recent report from IBISWorld.
Food consumption has clearly trended toward healthier options and home-based cost savings, which can come at the expense of pizza, according to David Sprinkle, publisher of Packaged Facts. He said the main messages to pizza purveyors from this survey are: enhance the overall healthfulness of your pizza, and experiment with options providing more clear-cut healthfulness without sacrificing taste.
Additional cuisine-driven growth opportunities, according to Packaged Facts' new report include:
Packaged Facts' data is a bit short of CHD Expert's recently released numbers, which estimated the away-from-home pizza segment as a $46 billion market. CHD Expert predicts the segment to continue experiencing growth in the next few years.
IBISWorld has also predicted pizza segment revenues to jump to an average of 2.9 percent per year from now through 2017 – doubling its growth from the previous five years.
Big three expected to grow market share
If the pizza segment does hit this growth projection, much of it will come from the big three -- Pizza Hut, Domino's and Papa John's. According to Bloomberg, Gregory Badishkanian, a Citi analyst, said those three chains are in a position to take a bigger share of the market as independents continue to struggle in an uncertain economy.
His estimation of the pizza market is $35 billion, however that doesn't include retail/frozen. The top three chains account for 30 percent of the entire segment.
Badishkanian predicts sales trends overall to slow a bit, which will offer the big three an opportunity to take more business away from smaller establishments by leveraging their brand names, advertising budgets and technology features. Pizza concepts that offer value positioning will fare better moving ahead, he wrote.
Read more about trends and statistics.