LONDON — Technavio analysts forecast the global pizza market to grow at a CAGR of close to 3% during the forecast period, according to their latest report.
The research study covers the present scenario and growth prospects of the global pizza market for 2016-2020. The market is categorized into two segments on the basis of the type of foodservice operator that sells the pizza. These are chain operators and independent operators, where chain operators consist of operators with more than ten outlets.
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Technavio food and beverage analysts highlight the following four factors that are contributing to the growth of the global pizza market:
- Growing innovation and customization in pizza
- Increasing demand for gluten-free pizza
- Rising popularity of fast-casual pizza
- Burgeoning marketing initiatives
Growing innovation and customization in pizza
Customers nowadays are looking for pizza infused with new and bold flavors. The demand for innovative and exotic flavored pizza is more prominent among the millennials. In 2015, Pizza Capers launched new offerings for its Summer Flavours range, which includes two innovative pizzas: Summer Blueberry Bliss and Banana Choc Overload. These intriguing flavored pizzas are prepared from fresh, quality ingredients.
In addition, they are looking for options to customize their pizza based on their calorie intake per day. Pizza manufacturers like Pizza Hut offer nutrition calculator that gives customers the option to create their own pizza by selecting the crust type, toppings, sauce, and size of the crust based on their requirements and then the nutrition calculator will display the total calorie intake for the customers. “The main impetus for customization is the growing importance of diet in the current generation of consumers. Fulfilling the needs of the customer aids pizza vendors in increasing the probability of repeat customer visits,” says Arushi Thakur, a lead analyst at Technavio for food research.
Increasing demand for gluten-free pizza
In countries such as the UK, France, Canada, and the US, there is a significant rise in pizza establishments that offer gluten-free pizza in their menu. Gluten-free food products are generally consumed by people with gluten-related disorders such as celiac disease and non-celiac gluten sensitivity. It has been observed that customers preferring gluten-free pizza tend to visit the same eating establishments repeatedly after a positive eating experience and later may become loyal and profitable customers.
As pizza is innately an indulgent food, manufacturers need to amplify the quality bid of their wheat-free pizzas and persuade buyers that the taste and texture of wheat-free alternatives is similar to regular pizza. According to research studies, 1% of the US population has celiac disease, but there is growing demand from a large consumer segment that perceives gluten-free as a healthier option to standard crusts. Therefore, the demand for gluten-free pizza will eventually rise during the forecast period. Pizza Hut and Papa John's are offering gluten-free pizza in their menu in the US and the UK.
Rising popularity of fast-casual pizza
A fast-casual pizza restaurant is a fresh and rapidly growing concept. It is a combination of quick-service restaurants and casual dining restaurants. It serves healthier pizza that is fresh but costs more than that served in quick-service restaurants. The increase in health consciousness has pushed the demand for this segment. Consumers are willing to pay more for the healthy, fresh, and low-calorie pizza served at fast-casual restaurants. In 2013, Chipotle Mexican Grill partnered with restaurateurs Bobby Stuckey and Lachlan Mackinnon-Patterson to launch a fast-casual pizza concept called Pizzeria Locale, which cooks pizzas to perfection in around 2 minutes in customized 900° Fahrenheit ovens. MOD Pizza, Blaze Fast-Fire’d Pizza, Pie Five Pizza, PizzaRev, Uncle Maddio’s Pizza, and Live Basil Pizza are the top pizza restaurants in this category in the US.
The fast-casual pizza market in Europe has a lot of potential to grow during the forecast period. The UK, Germany, and France are the key markets in this category as fast-casual pizza not only satisfies the craving for a perennial favorite but also gives the customer an option to design a personalized pizza at an affordable price, which in turn will propel market growth. “Customization and convenience are the key selling points, but the quality of the pizza will maintain the growth of fast-casual pizza in the long run,” says Arushi.
Burgeoning marketing initiatives
The pizza industry depends heavily on marketing, advertising, and product promotions to maximize sales of their own brands and launch new offerings. The vendors in this market mainly advertise their products through electronic and print media. However, with the development of digitization, many companies like Domino's and Yum! Brands are heavily inclining toward digital marketing. They use various social media sites like Facebook, Twitter, and Instagram specifically to attract the target demography age group of 18-30 years.
For example, Domino's in April 2016 launched a "Zero Click" pizza ordering app, which saves the user's favorite pizza and all the other information such as billing and delivery address details after the first use. After this, the user just needs to open the app and then automatically the order gets placed for the pizza the user has set in his or her profile. It waits for 10 seconds so the user can cancel the order if the app is opened accidently, and then it displays the customer's order information. In addition, there are also safeguarding options like the option to lock the app to avoid accidental order.
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Source: Technavio