Take-and-Bake Test

May 6, 2004

Step into the Kroger supermarket in Dublin, Ohio, and you'll find a heavily branded take-and-bake pizza kiosk dubbed "Alla Casa From Donatos."

Less than a month old, the kiosk marks the initial leap into the take-and-bake segment by 181-unit Donatos Pizzeria, based nearby in Columbus. Company spokesman Tom Santor called the effort "only a test for now," but it's clear this first run is serious.

The 300-square-foot unit has eye-catching signage, custom holding cases and a full makeline that's visible to customers. Pizza packaging includes slick, branded die-cut boxes with see-through tops and perforated aluminum baking trays. To make transport easy, pizza are covered in plastic and vacuum-sealed.

This is not your average take-and-bake unit according to Jeff Aufdencamp, co-owner of four-unit Mama Mimi's Take 'N Bake Pizza, in Columbus, Ohio. Packaging for his pizzas includes cardboard circles wrapped in heat-shrunk plastic and branded with a Mama Mimi's baking instructions sticker.

"The amount of money they've put into it is pretty amazing," said Aufdencamp, who visited Donatos' kiosk during its second week in operation.

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Is he concerned Donatos will slice into the business he and wife, Jodi, founded four years ago?

"Not in the least bit," said Aufdencamp, who said the same about Papa Murphy's Take 'N' Bake Pizza, which entered the Columbus market in March. "I think we're very comfortable with our company and what we do and the products we sell."

Donatos is one of at least three formidable pizza players testing take and bake in recent months. Papa John's has two market-wide experiments underway in Colorado, and Pizza Inn said in a recent Securities and Exchange Commission filing that it's testing take and bake as well.

Rob Elliott, executive vice president of marketing at segment-leading Papa Murphy's, said his company is watching those competitors' tests carefully.

"Anytime a competitor like Papa John's enters the market, it concerns us," said Elliott. "We certainly respect the marketing muscle of a company like that."

But does he worry it will hurt Papa Murphy's business? Like Aufdencamp, Elliott believes those companies have some catching up to do if they're going to have an impact in the take-and-bake segment.

"We've kind of invented the category and we understand take and bake well," Elliott said. "Being that's all we do, we're best positioned to serve our customers a great take-and-bake pizza."

Having it both ways

Multiple traditional pizza companies, including Pizza Hut and Little Caesars, have experimented with take-and-bake pizza in the past, but most abandoned the effort. Midsize players such as Nancy's Pizzeria (45 units) and Figaro's Italian Pizza (100 units), however, have mastered the

Donatos' new Alla Casa kiosk at Kroger.

sale of both cooked and raw pizzas.

According to Figaro's marketing director Jerry Doty, one key is using a single type of dough for both types of pizzas. (In contrast, Donatos uses a separate dough in its take-and-bake kiosk, but that product goes only to Kroger, not its traditional stores.)

"We had to make a crust that is ready right now out of our oven, or ready to bake four hours later in (the customer's) oven," said Doty, whose company is based in Salem, Ore. "In take and bake, the crust has to be abuse-able, because the customers will put their pizzas in their cars and drive around a while before putting it in the refrigerator."

The question of whether to have separate doughs for baked and take-and-bake pizzas can be solved with parbaked crusts, said Chris Presutti, sales manager for Tomanetti's Pizza. The Oakmont, Pa., manufacturer company sells hand-formed parbaked crusts to operations seeking ease of use and consistency.

"Our product is already

Tomanetti's parbaked Homestyle, handformed pizza crusts.

finished, so when the customer puts it in the oven, they're just toasting it, getting the toppings hot and melting the cheese," Presutti said. "It also gives a better shelf life for people who take it home. They don't have to bake it immediately."

Parbaked crusts are beneficial inside the store as well, Presutti said, since less dough has to be made, and it's easy to handle.

"It's idiot-proof, really," he said. "Shape, taste, bake, weight ... everything is consistent. There's no guess work involved."

Doty admits Figaro's has struggled some in explaining to customers that they could have their pizzas raw or cooked. It eventually dropped its "we bake it or you bake it" tagline and had its order-takers ask, "Would you like us to bake it, or would you like to bake it home?" to avoid misunderstandings.

"We had customers saying, 'Who's we? You or me? Or, 'Am I supposed to bake it or are you going to?' " Doty said.

Mama Mimi's Aufdencamp said he has no interest in having it both ways. Communicating to customers that Mama Mimi's doesn't bake pizzas has been a hard-fought effort, and "cooking pizza is just a hassle we don't want," he added. Selling baked pies, he added, "would probably be confusing."

Doty said doing both isn't that daunting, rather it's a simple matter of offering another choice.

"We started as a take-and-bake chain 22 years ago, and then we added ovens in 1987. So we know both ends," he said. "When people call in to order, it's just another thing we ask: 'Would you like us to bake that?' "

Papa John's began its take-and-bake test earlier this year in Denver and Colorado Springs, but conclusive results aren't yet available, said Karen Sherman, the company's spokesperson. Asked why the Louisville, Ky.-based chain conducted its test in a market well-infiltrated by Papa Murphy's and Nick-N-Willy's World Famous Take-N-Bake Pizza, she said Papa John's wanted immediate feedback on how its product stood up against the industry's leaders. So far, she said, results are satisfactory enough to continue testing.

Like Figaro's, Papa John's uses its standard dough and makes the full menu available for take-and-bake options. In stores where take and bake is a carryout-only option, the price is discounted slightly, but where it's delivered, pizzas fetch the full menu price, Sherman said.

Doty said Figaro's delivery customers always get the take-and-bake pizza discount, but that the bulk

Boxed take-and-bake pizzas in the case at Donatos' Alla Casa kiosk.

of the company's delivery orders are for cooked pizzas. "People are ready to eat the pizza when they call for delivery. We don't deliver that much take and bake."

It's about choice

Donatos' Santor said the company has no visions of becoming another Papa Murphy's by adding take and bake. The company's goal is much more simple: "Put more pizza in more mouths," he said.

But at what price? Donatos isn't sharing the details of its kiosk investment, but Mama Mimi's Aufdencamp suspects it's an amount he could use to "open four stores."

Additionally, though Donatos' name is on the kiosk, the pizza making is done by Kroger employees, not its own. The supermarket's store manager said Kroger is, for all intents and purposes, a Donatos franchisee that buys raw materials from the parent, sells its finished products and returns a cut of the proceeds.

But if this project fails, could it hurt Donatos' image? The same question surely is under exam at Papa John's and Pizza Inn, which did not return calls for this story.

As Santor asserted, the test is just a month old and no one at Donatos has even had the chance to portend visions of wild success or doom. For now, everyone's in the observation mode.

"Seeing that this is the alpha test, we need to be close at hand and watch everything," he said.

Papa Murphy's Elliott said his chain is conducting a similar test grocery kiosk test at one Wal-Mart and at one Smith's Food & Drug Stores (which, ironically, is a division of Kroger), both of which are in the Midwest. However, those operations mirror standard Papa Murphy's stores, he said.

"Ours is a store inside a store, and we do what we've always done," Elliott said. "We're not filing cases with pre-made pizzas. We don't want it perceived as a grocery store pizza. It's all done right in front of customers' eyes."

Aufdencamp and Figaro's Doty said supermarkets have wanted to do the same with their companies' pizzas, but both firms shied away. Still, both believe that experiments underway at their competitors' will benefit them in the end through increased exposure for take-and-bake pizza in general.

"If everyone gets interested in take and bake because Donatos does a national ad campaign about it, then that's great," said Doty. "That kind of attention could bring the whole category up."

Topics: Little Caesars , Papa Murphy's Take 'N' Bake Pizza

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