For convenience retailers looking to take their sales to the next level, moving from a frozen to a fresh pizza program can help compete not only against other c-stores, but also against other types of restaurants and prominent chains. Fresh pizza programs appeal to consumers, as more look for fresher fare.
The vast majority of both baby boomers (86%) and millennials (81%) rank quality as the top attribute when choosing what and where to eat, according to Chicago researcher Technomic Inc. Freshness comes in as the next-most-important attribute, with 80% of boomers and 73% of millennials judging a foodservice program on this.
These findings show there’s a tremendous opportunity for retailers who successfully move to a fresh pizza program. But as any convenience retailer might expect, this switch takes time, training and, of course, a financial investment. The question is just how much? What are some of the costs associated with the upfront switch and with the ongoing food purchases?
Fresh Pizza Investment
Frozen pizza programs typically cost anywhere between $1,000 to $5,000, according to Thad Tuttle, director of business development for Land Mark Products Inc., which offers a frozen pizza program through its Day N’ Night Bites line. An investment like that might or might not include some basic holding and cooking equipment, along with marketing materials and other basics.
Frozen pizza programs work best for c-stores without a lot of space or solid staff. But even though they cost less to set up, they also bring in less revenue, roughly $20,000 to $30,000, according to Tuttle.
Fresh pizza programs, on the other hand, can generate over $200,000 for top operators who do them right. Fresh pizza also has higher margins compared to frozen—about 65% compared to 50%. What’s more, food costs can actually run lower for a fresh program—at 35% to 40% for fresh and 50% for frozen.
“Either way, you’re buying the food, but you only have to make the investment for a fresh program once,” said Tuttle. “We think about it as: Price is but for an instant, whereas profit is for a lifetime. You want a program with a higher profit margin that can generate revenue for the next 10 to 20-plus years. Otherwise, you’re limiting yourself.”
Land Mark’s Piccadilly Circus Pizza program costs about $33,500 in an initial investment, which includes upgraded cooking and prep equipment, initial food costs, branding and marketing materials, packaging, logoed napkins and other needs.
Fresh pizza programs are a good fit for retailers with solid working capital, as well as the space to install extra equipment, typically in a back kitchen and out front on a line. Operators with very little space and no kitchen might not be able to handle a fresh program.
“The best contenders for a fresh pizza program are those operators that are committed,” Tuttle said. “You can have all the space and working capital in the world, but if you are not committed to operating a fresh program, you’re not going to be successful. I’ve seen some convenience stores that have a very small kitchen, but because they’re committed they have had much success.”
Equipment, Labor & Space Needs
Some of the equipment required for a fresh pizza program includes bigger ovens, such as impinger ovens that can hold more capacity and cook pies faster. Operators will also need a refrigerated prep table for the sauces, cheese and toppings and a method to proof fresh dough, whether that’s using a proofer or extra bench space for room-temperature proofing. Some operators might use a dough press. And then there is a need for extra refrigeration space, warmers, small wares and possibly new, digital-menu ordering systems.
Although these fresh programs require significant equipment investment, c-stores can often repurpose this equipment for other fresh items. “You can use the ovens to bake cookies, muffins, appetizers and other foods,” said Tuttle.
Some operators use the prep table to assemble lunch sandwiches and the impinger ovens to toast them. The prep table can also be used to assemble fresh breakfast sandwiches like croissant and biscuit sandwiches and breakfast burritos with meat, cheese, eggs and vegetable add-ins.
This post is sponsored by Land Mark Products