NAPICS wrap-up: A slice of the independent pizza market

 
April 4, 2006

For the first time in a few years, inclement weather didn't threaten attendance at the North America Pizza & Ice Cream Show, held Feb. 19-20. Show organizers announced that 4,500 pizza and ice cream operators came to the event, held at the Columbus Convention Center.

"I'm not one of those people who can look at a crowd and make a good estimate, but what I can tell you is I've never seen a Monday at NAPICS that was this busy," said Ann Reichle, NAPICS chairwoman and co-owner of Angelina's Pizza in Olmsted Falls, Ohio, referring to the Feb. 20 turnout. Indeed, second-day attendance was sparse at last year's event, when a predicted snowstorm likely scared off some attendees.

NAPICS bills itself as "a show by independents, for independents," and that theme was echoed in its extensive offerings including a daylong pre-event Pizza Operators Workshop on Feb. 18, seminars on operational basics such as portion controls, evolving tax laws, marketing through community service, insurance issues and getting along with one's spouse-business partner. One of three members of a Presidents Panel featured the independent owner of one of the busiest pizzerias in the world, and industry experts held court in the Pizza Test Kitchen, a one-of-a-kind, hands-on area where attendees talked, made, baked, tweaked and tasted pizzas.

Sensational seminars

It's taken one-unit Pizza Shuttle 21 years to hit the $5 million annual sales mark, but co-owner Mark Gold said most people assume it happened overnight.

"It took us 10 years to get to a million in sales, and after that it really picked up," said Gold, one of three men on the panel. He was joined by Siler Champan, co-owner of Pizza Works in Fort Mills, S.C., and Jack Butorac, president of Marco's Pizza Franchising in Toledo, Ohio. "It's been crazy getting to where we are now. I wanted to quit a million times, but I owed too much money to do it. ... Plus, I guess I like what I'm doing. It is a fun business."

Gold originally set out to "clone a Domino's" when he and partner Louie Sicinski opened in 1985, but the two saw that menu variety would draw more customers.

"I'd love to sell just pizza, but if five people are coming to our place and two of them don't want pizza, what are we going to sell them?" he said. "It gives them options and that gives us business."

Though Champan's business is one-fifth the size of Gold's, he told the audience that an investment in a POS system is crucial for any operator who wants to grow.

"I don't know how people could operate without one," said the 22-year-old, who is close to opening his second store. "When somebody says, 'My business is too small for a POS,' I don't buy that. That's a tool that will help you compete against the chains. I can't stress that enough."

Butorac, the lone franchise concept representative on the panel, held that buying into an established chain such as 147-unit Marco's is the best way to build a pizza business quickly.

"We take the guesswork out of running a pizza business by putting together a proven system," said Butorac, a veteran of such chains as KFC. "A recognizable brand presence is more important now than ever because of all the competition out there."

In a session titled, "Working with Your Spouse & Living with Your Business Partner," Jodi and Jeff Aufdencamp stressed repeatedly that frequent communication between spouses is the key to balancing business life and love life. They said each must share the same goals and review them at least annually to ensure they haven't changed.

"We're talking goals for yourself, goals for your kids, for your house, the business, all of it," said Jodi, who co-owns four-unit Mama Mimi's Take 'N Bake Pizza with Jeff. "It's normal: a woman starts thinking one way and a man starts thinking another way. It could be your goal on how you're going to grow your business, or his goal on how many hours a week he wants to work. You have to talk about it."

Be willing to discuss and debate proposed changes to your business, and when both parties can't come to the same conclusion, simply agree to disagree to maintain respect for each other.

"Even then we have to make a decision, and we've learned to walk away saying, 'That's the decision we're going to make and we're going to stick with that,'" said Jeff.

The Aufdencamp's "never-do/always-do" short list included:

· Never argue in front of employees or overrule a spouse's decision. "I might tell the employee, 'If that's what she said, that's what we'll do,' but I'll wait to talk to Jodi before I say, 'Why in the heck did she tell them to do that?'"

· Never keep score on who was right or wrong. Be quick to admit you're wrong.

· Never force one person to be the business's bad cop; share that burden.

· Set a time at home when neither spouse can discuss business.

· Schedule time away from the business and from each other.

The show floor

Many exhibitors, as well as long-time attendees of NAPICS, said the exhibit hall show floor has rarely been busier. The crowd is unique from other pizza tradeshows, several exhibitors added, in that most attendees represent independent operations.

Gary Peek, president of Intura Solutions, a POS software developer in Arlington, Texas, said independent operators in 2006 are more inclined to start with or step up to a POS system than in the past.

"People are much more open to trying to do things like this than they were 10 years ago," said Peek, one of several POS vendors at the show. "Some of that's driven by a change of ownership in a family business, and maybe because the children are more willing to adapt to new technology."

Peek said his sales pitch has changed with the times as well. "We try to talk to people about how much time they have in their lives for their family and their personal schedules, and how a POS system can increase that. We've learned that's very valuable to them."

The potential POS buyer is more sophisticated as well.

"They're asking very specific question about features, about food cost or pricing methodologies; they're asking more knowledgeable questions about hardware and software — questions they didn't ask five years ago," he said.

Mark Mizer, president of RDP Foodservice, a distributor in Columbus, said companies like his are working to reposition themselves as customer partners rather than suppliers in 2006. He said operators now challenge distributors to help them run their businesses more efficiently and profitably by helping them expand their menus and stay atop trends.

"The days of having a salesman coming to the door, and saying, 'What's your price?' are gone," Mizer said. Helping with lower prices has been difficult, though, because of fuel price increases. Like most distributors, he said RDP didn't want to pass along fuel surcharges to operators, but after Hurricane Katrina it had no option.

"Fuel and transportation costs are killing us, and people need to understand we're not even trying to recover 100 percent of those increases," he said. "People need to understand that our margins are very narrow, too. So we had to try to offset those fuel prices somewhat."

Mizer said the good news for operators is cheese prices are expected to remain low throughout 2006.

"That's exactly what we're hearing, and we're glad we can say that," he said.

That NAPICS has an ice cream component is only half the reason Chris Humiston was exhibiting for his company, Aromi d'Italia. The Baltimore-based distributor of gelato and refrigeration equipment said that just as in Italy, gelato is the perfect accompaniment to pizza. Not only does it have strong appeal as a sweet treat, it's Italian, unique and still largely undiscovered in the U.S.

"Gelato is young in America, but it will catch on," said Humiston. Gelato has half the butterfat of ice cream, but retains all the body and texture. "You get that mouthfeel from all natural ingredients, too. There are no preservatives in this."

There is a significant investment in a gelato system, he said, including the gelato maker and the display case.

"But if you borrow $35,000 and you buy a machine and display case, and your payback is $750 to $800 a month for five years, that works out to $25 a day, which is 10 cups of gelato," he said.

"This will pay for itself much quicker than that."

Pizza showdown

Don Schmitt of Bexley Pizza Plus (Bexley, Ohio), and Eric Lippmann of EJ's Neighborhood Pizzeria and Italian Eatery (Cypress, Texas) took top honors among 73 contestants in the annual Pizza Pizzazz contest, held on both days of the show.

The pizza contest is the largest of its kind in the U.S., and it continues to draw contestants from well beyond the NAPICS region.

Schmitt's Mega Meat pizza won the traditional pizza category, while Lippmann's Texas-Style Barbeque Chicken won the gourmet category. Their pizza prowess earned each expenses-paid trips to the April World Pizza Championships in Salsamaggiore, Italy, and spots on the U.S. Pizza Team.

Second prize and $400 in the traditional category went to Tim Duffey, DeFelice Brothers Pizza, St. Clairsville, Ohio, while third place and $200 went to Terry Bryant, Angelo's Pizza II & Hound Dog Café, Avon, Ohio.

Second prize and $400 in the gourmet category went to James Catalfino, Catalfino's Pizza & Pub, Canal Winchester, Ohio, and third place and $200 went to Paul Cataldo, Antonio's Italian Ristorante, Elkhart, Ind.

Contestants in both categories competed in first-round bakeoffs that yielded five finalists each. Those five went to a final round in which they again prepared their original entries. A panel of 25 judges scrutinized each pizza on characteristics such as overall flavor, appearance, marketability and taste.

Lippmann, who traveled 1,100 miles to compete, said he's looking forward to the much-longer trip to the Italian championships.

"I saw some really good pizzas here, so I'm glad we did as well as we did," he said. "I can't wait to go to Italy because I've heard so much about that contest. I'm just glad it's my turn this time."


Topics: NAPICS


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