Pizza Hut — It's complicated

by Monica Watrous
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NEW YORK — Many restaurant chains are downsizing menus to simplify operations and improve sales. Burger King began launching fewer products, and McDonald’s recently revealed plans to nix eight items next year.

Pizza Hut has taken a decidedly different approach.

“We’ve more than doubled the number of flavors and ingredients that we have in our restaurants,” said David Gibbs, chief executive officer of Pizza Hut, during parent company Yum! Brands’ annual investor day on Dec. 11. “There are now 2 billion different ways to make a pizza at Pizza Hut.”

Pizza Hut added 11 new recipes to the menu.

As part of a comprehensive brand reboot, the pizza chain in November introduced the Flavor of Now menu, featuring 10 new crust flavors, including toasted asiago, salted pretzel, and curry; six sauces that include honey sriracha, buffalo, barbecue, and crushed tomato; and new toppings, such as salami, fresh spinach and Peruvian cherry peppers, plus 11 new recipes and a reduced-calorie crust.

The move follows eight consecutive quarters of declining sales in the United States.

“For the folks that are working on the Pizza Hut brand, 2014 was all about rebuilding the foundation of the brand, strengthening the brand to really take the business to a much better place,” Mr. Gibbs said. “Now, in the U.S., the business that I’ve had the privilege of leading since January, myself and the leadership team went back to school on the brand and the opportunities that we had and came up with a plan, a holistic plan to take the business to a better place.”

Pizza Hut has a history of pioneering in the pizza category. The company claims to have processed the first on-line pizza order. Pizza Hut invented stuffed crust pizza and pan pizza, too, Mr. Gibbs said.

“Just about any significant innovation in the category came out of Pizza Hut,” he said.

Earlier this year, Pizza Hut introduced a crust stuffed with cheese and bacon.

The company hopes the new flavors will lure lapsed consumers back to the brand. But while so many other restaurants are scaling back, it seems Pizza Hut may be biting off more than it can chew.

To make way for the new menu, the company transformed its operations, including how ingredients are inspected and portioned and how pizzas are assembled. The changes required 1,000 representatives from franchised locations to receive training in Dallas.

“We had to add a finishing station on our cut table in order to add some of these new flavors (and) ingredients,” Mr. Gibbs said.

The chain also launched a new marketing campaign, evolved its pricing strategy and debuted a refreshed logo that will appear on pizza boxes, advertisements and employee uniforms, which have become more casual than the previous attire.

The Peruvian cherry pepper on top is an enhanced digital platform designed to drive more on-line and mobile orders. The company named a new chief digital officer in January to oversee the project.

“Our goal certainly is to get the vast majority of our business on-line as soon as we can,” Mr. Gibbs said. “Higher ticket, more frequency, better experience for consumers.

“It’s a win all around.”

In the first few weeks since the new menu launch, initial feedback has been “overwhelmingly positive,” Mr. Gibbs said. But franchisees and even customers may find the menu just plain overwhelming.

Executives of McDonald’s said its complex menu confused customers and slowed drive-thru times. And for Burger King, the new strategy of fewer product introductions has led to consistent growth in comparable sales as well as improved margins for franchisees, with reduced waste in the kitchens, simplified crew training and better overall restaurant operations.

As for Pizza Hut, time will tell if the Flavor of Now menu will deliver a solution for the company’s flagging U.S. business.

“All of the customer research comes back, when people try the products, they love them,” Mr. Gibbs said. “They use the word ‘love,’ to describe our new menu. So we're building that brand love, and we fully intend to take the new positioning and the new menu in different forms all around the world.”
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