What to expect in the pizza segment in 2013
Predictions are pouring in about what trends will shape the restaurant industry in 2013. We have some ideas of our own.
Here is what's showing up in PizzaMarketplace.com's crystal ball (in no logical order):
Hispanic and millennial marketing messaging will continue to make huge gains in brands' budgets. Domino's and Pizza Patron are ahead of this trend with bilingual campaigns, websites, mobile apps, etc. There will also be a greater focus on millennial-friendly programming such as Funny or Die, Comedy Central and MTV.
Mobile and tablet technologieswill continue to accelerate at a staggering pace, with QR codes, augmented reality and robust ordering apps taking center stage. Brands will start to see a bigger percentage of orders coming from the mobile space and as a result, carry out orders will increase from people on the go. Also, the mobile payments industry is expected to account for $670 billion worth of global transactions by 2015, and the fast-paced pizza segment could find an opportunity in this market. Sit-down establishments will continue to add tablets for tableside ordering and payment.
Top your own/fast casual conceptswill take off. Already a growing subsegment of the pizza and fast casual spaces, brands such as Pie Five Pizza Co., Uncle Maddio's and Top That! are poised for rapid growth as customers demand being in control of their food.
Competition will be intensified as the bigger players jockey for market share in international markets, and as smaller chains expand their domestic footprint. Domino's is expanding in new markets such as Nigeria, Germany and Macedonia, while Papa John's has an international pipeline of about 1,500 units planned within the next six years, and Pizza Hut is growing in Canada, Africa and Thailand. Papa Murphy's is planning 100-plus new U.S. stores in 2013. Retail and c-store brands are also stepping up their pizza offerings, adding to the competition.
Digital menu boards will become the rule rather than the exception across the restaurant industry, as the technology's cost starts to come down, and as chains prepare for the Obamacare provision that mandates the display of nutritional information.
Online and social media marketing will continue to pick up. Expect brands to crowdsource their social network for menu ideas, use fan photos and quotes for marketing messages, jump into newer channels such as Pinterest and Instagram, and pick up the frequency of social promotions. Also, expect more brands to add Facebook ordering options so customers don't have to leave the popular site to order a pizza. NPD Group reported that 6 percent of restaurant visits in Q1 2012 were influenced by online marketing, with that influence expected to increase. NPD Analyst Bonnie Riggs said, "It's no longer a question of if online marketing should be a part of a restaurant operator's overall marketing plan; it's a must-have."
Customer convenience demands will require some new operational efforts. Services such as catering will increase, pizzerias will add drive-thrus and some will even add more hours, like expanding into the breakfast daypart. Uncle Maddio's, Detroit Style Pizza Co. and Rosati's recently added catering, for example. Pizza Patron introduced a new drive-thru model while CiCi's is increasing its carry out footprint. Pie Five Pizza Co. just debuted its breakfast menu, while Domino's has been testing breakfast in the Dayton, Ohio, market.
Protests over low wages (and the right to form a union) in the restaurant industry will spread into markets beyond New York and Chicago. This movement is just getting started, and we anticipate it to pick up speed in 2013 as the minimum wage rate remains stagnant.
Commodity pressureswill continue to be a concern, particularly as wheat and cheese prices increase.
Obamacare costswill also be a concern, as well as a possible deterrent for operators wanting to expand their footprint and technology platforms.
On the menu:
- Snacks/bites will become a common theme for pizzerias looking to add incremental sales. (e.g. Papa John's Chicken Poppers; CiCi's, Mazzio's and Fresh Brothers' knots; and Domino's Parmesan Bites).
- Menus will continue to grow beyond pizza, with salads, craft beer, wings, coffee/specialty beverages and desserts providing the much-needed differentiation in a crowded market.
- Pizza players will throw their hat into the breakfast ring.
- Gluten-free will continue to barrel into the mainstream, with more large chains (beyond Domino's and Chuck E. Cheese) adopting the option.
- Pizzerias will continue to embrace healthier offerings, such as vegan toppings and whole wheat crusts.
Photo provided by ChristmasStockImages.com.
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Topics: Digital Signage, Food & Beverage, Franchising & Growth, Health & Nutrition, Marketing / Branding / Promotion, Menu Boards, Online / Mobile / Social, Operations Management, Pizza Toppings, Staffing & Training, Trends / Statistics
Alicia Kelso Alicia has been a professional journalist for 15 years. Her work with FastCasual.com, QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.