Article

Independent pizzerias leverage local ingredients, marketing to compete with big chains

For independent operators, it's important to understand futures and have a good relationship with distributors and manufacturers to best manage food costs.

January 5, 2015 by Holly Freeland — Freelance Journalist, Pizzamarketplace.com

Independent pizzerias are often found at the top of most consumers’ lists when it comes to picking their favorite local eateries.  However, the number of independent pizzerias has been dwindling as they attempt to compete with the larger, national chains and other competitive forces in the foodservice space. 

According to research from The NPD Group, visits to independent restaurants declined by 2 percent in Q2 of 2014.

Domino’s and Papa John’s CEOs have both referenced this trend in recent earnings calls, staking claim to winning over much of the independents’ market share. They have cited a discrepancy in marketing and technology budgets as a reason for mom and pop closures. 

"Our focus on technology and consumer access via digital ordering continues to give us an edge over our competition, particularly versus the smaller players that continue to lag behind. Even if the regionals catch up to the level of technology we currently offer, we're already several years ahead of them and expect to keep pushing to lead the industry on technological innovation," Domino's CEO Patrick Doyle has said. 

Survival of the fittest

There are independent pizzerias that are bucking the trend, however, and are not only surviving but thriving. For these concepts, service trumps technology.

"For me, having a diverse and innovating menu is one element along with understanding your demographic and offering several styles. Having a kitchen that can adapt to new trends is important, while the execution of these trends is the key. Hiring a great team with a great service is also a must as it’s an experience for the customer and you have to make it memorable," said Tony Gemignani, of Tony's Pizza Napoletana in San Francisco. 

His strategy seems to be working very well: Tony's Pizza Napoletana generates $5 million a year and is only open five days a week. 

Rob Lindeman of Pies and Pints, with locations in West Virginia and Ohio, adds that independents can also differentiate with higher quality ingredients. His concept, for example, focuses on local, sustainable and ethical food. 

"We have very intense flavor profiles that have unique combinations," he said. 

Independent pizzerias are able to offer benefits to the customer that the larger chains cannot compete with, such as higher quality food, often times locally grown, having ties to the community and the adaptability to change things as the customers see fit, Lindeman and Gemignani said. They also have more control over their product than a chain does. 

And, although the big players have plenty of resources and big budgets to their advantage, Gemignani said smaller concepts can create a more direct, specialized marketing campaign. 

"I dedicate my marketing tactics to a PR agency and a separate social media channel. Our social media is now mostly in house where it’s a little more personal and engaging," he said. "Six months prior we set up specific tactics, stories, specials, etc., where we can directly work or promote with writers, blogs and social outlets. We have done and will continue to do things that are groundbreaking."

Navigating high food costs 

Groundbreaking strategies aside, there is still the need to be financially competitive in the crowded pizza space and that can get tricky for the small guys, especially when there is a volatile commodities market.

"We have the same challenges with commodity prices as the larger chains," Lindeman said. "We are constantly evolving our offerings and we always opt for higher quality and made in-house. We are profit driven, but not at all costs. We can take a hit in a quarter without compromising our focus on guests and associates. The big guys can’t take a quarter off and don’t have the same long-term perspective."

Gemignani said his restaurant takes advantage of having an ever-changing menu to help control operational costs.

"I have been changing my menus at most of my stores. That really helps so if the price of something like Romaine quadruples, we can take it off the menu for six weeks, or take it off altogether if we need. It's important to raise prices when it's needed, but also controlling your food cost," he said. 

Gemignani said, for independents, it's important to not only understand futures, but to also have a good relationship with distributors and manufacturers. 

"And, if you are changing your menu as often as we have been, it’s important to have a menu that can be reprinted with little cost," he adds. 

On trend

For these two independents, having the ability to use the "buy local" trend to their benefit is a crucial part of differentiating themselves from the larger, national chains.

"We are in our restaurants every day and constantly focused on execution as well as talking to our customers. Buying local and independently, and being a non-chain are definitely factors for us," Lindeman said.

"To me, the mom and pop shops along with the chef-driven artisan style pizzas will always be first class," Gemignani adds. "It's not about quantity, it's about quality for me."

Photo provided by Triposo.com. 

About Holly Freeland

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