The Pandemic Pizza Boom
Quick Bites: Pizza is Hot!
- If the pandemic has been good for anything, it’s pizza. U.S. consumers have been buying pies at a blistering pace in 2020 with three of the biggest chains showing significant growth in the second and third quarters. And it’s unlikely to slow down anytime soon.
- Domino’s has been a big winner in the space with sales up 16% year-over-year in the second quarter and +18% in the third quarter. That’s no surprise, as Domino’s pioneered pizza delivery in the 1970s and has made significant investments in mobile ordering. Ordering a Domino’s pizza can be as simple asking Alexa, texting/tweeting a pizza emoji, or using Domino’s Zero Click app.
- Papa John’s, coming off of a tough 2019, has shown significant growth as well, piggybacking on strong delivery demand, menu innovation, and celebrity promotions. Shaq-a-Roni pizza, anyone?
- Early pandemic buying gave the frozen pizza a sales boost and pies keep flying out of freezer cases with sales up more than 10% year-over-year in the third quarter. Purchases are unlikely to slow anytime soon with consumers reportedly starting to stockpile a bit more heading into winter.
Rural Migration & Dairy Industry
With restaurants shut down, theater districts dark, and the concept of living close to your neighbors no longer all that charming, people from big cities are heading to smaller cities, the suburbs, exurbs, and even rural areas. According to research by MYMOVE, more than 150,000 people moved out of Manhattan and Brooklyn on a net basis between February and July. Chicago saw 31,300 people flee the city.
Where are people going? The Southwest, primarily. Seven of the top ten cities for new growth were in Texas. Katy, a suburb of Houston, is in the first place, gaining +4,000 residents. Frisco, an already fast-growing suburb of Dallas, is third on the list at +2,600 net move-ins. The S&P/Case Shiller Home Price Index for August showed prices in Dallas up more than 5% year-over-year and an almost 10% increase in Phoenix home prices. Idaho has also seen a big population boost with reports suggesting that 194% more people moved into the state versus out between the first and second quarter alone.
Existing home sales jumped 22% year-over-year in September to the highest levels in more than a decade. The median price of those homes was $311,800, up 15% year-over-year. Sales of newly constructed homes in September topped year-prior levels by 32%.
For the dairy industry, the movement of people from cities to the suburbs doesn’t have an immediate direct impact on demand. But the diaspora of people out of the city will likely put independent and high-end restaurant traffic at risk. In New York, for instance, estimates suggest that somewhere between a third and one-half of restaurants could close due to a wide range of COVID-related downfalls. The question now: Does that lost dairy demand filter out of the cities and into the suburbs or do bigger kitchens keep people cooking at home?
Keep Up To Date On Cheese Industry News
Find all of HART Design & Manufacturing current industry news here.