- WHITE PAPERS
CHICAGO -- Nearly 1,800 pizza professionals filed into Chicago's Navy Pier to take in the smells, sights and sounds of the second-annual Chicago Pizza Expo, held July 31 to Aug. 1.
Despite an estimated 30 percent fewer exhibitors than at last year's inaugural show, sources close to the event said attendance was 9 percent higher than last year's count. (Show officials hadn't released official figures at press time.)
It also appeared that representatives of companies that did exhibit were pleased with show floor traffic and the quality of the contacts.
"Pizza Expos in general have a higher percentage of buyers than other shows (like the NRA) do," said Ken Clark, director of sales at oven manufacturer Middleby Marshall in Elgin, Ill. "The independents in particular go to these shows to kick the tires and try to make some decisions. And the chains more are touching base, seeing if anything's new and doing a little research."
Everything needed to operate a pizzeria could be found on the show floor of the 2002 Chicago Pizza Expo.
Fidelity Communication's Rick Stanbridge said the soft economy was having a small impact on his company, which manufactures telephone call management and marketing systems in Novi, Mich. Still, he said he was neither surprised nor concerned because buyers for products like his typically are slower to purchase in lean times.
"Business is good this year, but it still seems that people aren't purchasing a lot of things that they think don't pay off immediately," said Stanbridge, whose company recently sewed up an exclusive deal with the International Organization of Little Caesars Franchisees. "Our traffic at the show has been good, though."
While pizzeria operators have enjoyed bargain-basement cheese prices all summer, cheese makers like Sorrento Lactalis have had to ride out a margin-crushing market. A warm winter boosted milk and ultiimately cheese production to record levels, forcing producers to unload excess inventory at low market prices and, in some cases, sell directly to the government.
Frank Spina, a Sorrento representative, said he expects strong dairy demand in the upcoming school year will cause prices to fluctuate favorably, but stay below last year's numbers.
"Dairy producers aren't making any money and the cheese companies aren't making any money," said Spina, whose company is based in Buffalo, N.Y. "You can only push off so much to the government. Milk production is up and consumption is down. There's only so much you can do."
Spina called the market prices for both cheese (which have hovered around $1.12 for most of the summer) and milk "unrealistic" and said he expects dairy farmers to take action that will drive prices north again.
"Prices have got to get someplace back to the $1.40 to $1.45 (per pound on the 40-pound block)," Spina said. "The price is so low that the producers can't make money on their milk. And if they can't do that, the producers are going to kill off some of their herds and create a shortage of milk. And with the weather conditions the way they are -- heavy rains in some areas and dry in other areas -- what's going to happen to the cost of feed this fall? It's going to skyrocket."
The buzz among many operators at the show was that the used pizza equipment market is saturated, and that there were bargains aplenty. But Mike Brockman, corporate chef at Wood Stone Corp. said overall demand for the company's wood-and gas-fired ovens is strong.
"We're way up this year, and we've seen a lot more people getting into" hearth-fired ovens, said Brockman, whose company is headquartered in Bellingham, Wash. "Our international sales are doing really well, and our biggest customer is Safeway in England."
National Systems Corporation unveiled its new TMS/Quik Touch POS terminal.
The British supermarket chain is making hand-tossed pizzas at display kitchens in its stores, which also have sit-down restaurants and pizza delivery.
"It's a hot concept right now," said Brockman. "They (in-store restaurants) even stay open after the grocery stores close."
Chicago-based National Systems Corporation introduced its brand-new TMS/Quick Touch POS system. Its president, Jim Kargman, said the product has patent-pending features that greatly simplify touch-screen ordering and is vastly improved over the company's widely used "green screen" systems.
The DOS-based system is a "plug-and-play" product that can be installed on some existing touch-screen POS systems' servers. Without an existing system, the cost of a TMS/Quick Touch starts at $17,000 for a server and four terminals. Upgrading a system, Kargman said, costs about $2,500 per terminal.
"That way they don't have to buy an entirely new system, and that reduces the cost significantly," said Kargman. The product also prints out color street maps and directions for delivery drivers. "It makes it all incredibly easy. We believe it's quite an advance for the industry."
Eighteen different seminars were offered over both days for operators seeking to fine-tune their businesses. Issues such as traditional and Internet marketing were discussed, as were customer service, problem solving, franchising and portion control.
Speaking on hiring great employees, Jim Laube, founder of the Restaurant Consulting Group in Houston, recommended operators make the effort to learn as much as possible about each applicant before the interview, rather than winging it when one arrives.
Pizza expert and Chicago Sun-Times food critic Pat Bruno led a seminar on deep-dish pizza.
During interviews, he suggested operators ask multiple open-ended questions, such as why he or she applied (Did they want to work in a pizza place or just make some spending money?), how they would handle a challenging customer (Would they run for the manager or let the customer air his concern and then try to solve the problem?), and what sort of activities they're involved in (If they're involved in sports, for instance, they likely have a high level of energy and may even lead you to other potential employees on their team.)
"Let them do the talking and you be silent," Laube said. "Give them your total attention. Look at their job application before the interview so you know who you're talking to. That way you can make eye contact, and watch how they react to your questions. Their body language may tell you a lot."
Laube said that while no two restaurant employees are alike, studies by large chains have shown that certain personality characteristics commonly are found in the best hires: They're typically extroverted, have a strong sense of pride in their work, are responsible and do what they say they'll do, and they're energetic.
In one of the better-attended seminars, former operator "Big Dave" Ostrander affirmed his belief that take-and-bake pizza is not only the hottest food trend in American pizza, but one independent operators can capitalize on quickly and profitably.
Ostrander, an operational consultant in Oscoda, Mich., mentioned how one of his clients, 38-store Nancy's Pizzeria in Tinley Park, Ill., cross-markets with a hair salon near one of its stores; on a specified day each week, any customer getting a cut or perm at the salon gets a coupon for a free take-and-bake pizza at a nearby Nancy's.
The same chain also uses continuous loop TV-VCR combos in its stores to educate customers on baking their pizzas properly at home.
Ostrander admitted that not every pizza customer will use take-and-bake, but he stressed that two key demographics both need and want the product: those short on money and time.
"The fastest adapters are those with high to middle incomes and those with lower incomes," Ostrander said. "One doesn't have the time, and the other is stretching his dollar a long way. Those are the people who will try you out because they need to."
When one audience member asked Ostrander to forecast which top-four U.S. pizza chain would be the first to roll out a take-and-bake product, Ostrander said he didn't know for sure, but he does believe it's just a matter of time before it happens.
"I believe at least one of them will do it, and maybe even by 2003," he said. "Just wait until Papa Murphy's becomes number three, and then watch the others adapt. ... Nobody can ignore their success."
The key for independents, he added, is to add take-and-bake to their operations before larger competitors do it. Being reactive instead of proactive will only make what he believes to be an inevitable transition harder. "I'd rather force them to work to take away mine (market share) rather than try to take away theirs, because they've got so many more marketing dollars than the independents."