Pizza Is A Bright Spot For Cheese Sales
Despite the challenges cheese and other food industry stakeholders have faced over the past year with shifting supply and demand fundamentals due to the COVID-19 pandemic, a boom in pizza delivery and carry-out has been a steadfast, positive outlet for cheese demand and sales. In a year when restaurants across the country have struggled to stay afloat, those that have included pizza on their menus generally have fared better. Sales of pizza over the past year increased as much as 4%, according to Technomic, a food industry research and consulting firm.
“Pizza remains one of the most popular and craveable foods in the foodservice landscape. The continued emphasis on takeout and delivery, technological innovation and large, shareable portions have made pizza a convenient and reliable choice, especially for off-premise occasions and groups,” Technomic says. “To stand out in the increasingly crowded category, effective branding that allows concepts to be set apart from the others will be key.”
Meanwhile, data from The NPD Group’s CREST foodservice market research shows that total food servings through pizza/Italian quick serve restaurants (QSR) (including fast casual) grew by 2.5% for the year ending 2020 versus 2019, according to Dairy Management Inc. QSR pizza/Italian restaurants that were well-positioned for takeout and delivery were a popular option for feeding the family in the midst of COVID-19, the data shows. In contrast, food servings through total commercial foodservice were down 11.9% and down 3.4% for QSR for the year ending 2020.
“As demand for food delivery increased during the pandemic, there was an increase in demand for delivered pizza from Domino’s,” says Art D’Elia, executive vice president and chief marketing officer, Domino’s Pizza. “We benefited from having great technology, great food coupled with excellent value and reliable delivery. We continued to see customers rely on technology and delivery from Domino’s into the first quarter of 2021.”
Kendall Richmond, CFO at Toppers Pizza, says the company also saw a significant increase in delivery orders during the COVID-19 pandemic.
“So far, as we’ve seen vaccinations increase and restrictions decrease, we haven’t seen a major decrease in this trend,” Richmond says.
While even pizza operators weren’t immune from some of the headaches experienced last year with supply/demand shifts in foodservice, Richmond notes cheese probably is the one commodity that has not been affected from a supply/demand perspective for Toppers.
“We have an excellent partner on the cheese supplier side,” Richmond says, noting that while extreme volatility seen in the cheese market last spring had a slight impact on the company, Toppers contracts out its cheese 60-120 days out, “so we missed the lowest points but also didn’t see the high prices either. Also, it was a pretty short-lived spike of about 60 days.”
D’Elia says Domino’s has decades of experience in the ups and downs of cheese prices.
“It’s something we know how to manage together with our suppliers,” he says. “Customers love cheese on pizzas, in bread and on sandwiches — we continue to see customers choose many of the great cheese options we provide on our menu.”
In addition to the pandemic leading to a boost in takeout and delivery, a recent surge in demand for Detroit-style pizza also is lending support to pizza and cheese sales, notes Bob Starkey, vice president of business development for Winona Foods.
The style has become so popular that even national chain Pizza Hut in January added the pizza to its menu for a limited time to coincide with the Super Bowl and National Pizza Day Feb. 9.
Brick cheese is considered one of the things that makes the pizza Detroit-style pizza so popular, Starkey says, noting Brick cheese sales have been a great growth area for Winona Foods.
Detroit-style pizza traditionally is rectangular-shaped, features cheese all the way to the edges to create a crispy, thick, caramelized crust, is loaded with toppings and finished off with tomato sauce on top to keep the crust light and airy.
Starkey notes Brick cheese typically comes in a block form, but Winona Foods has seen a surge in demand for pre-shredded, grated and shaved cheese varieties as foodservice operators this past year have had to cut down on available staff to repurpose blocks of cheese in-house.
“Customers want the same material but just as a fully finished product,” he says. “Not as many companies have the people to shred for them, etc. The spend per se of having a fully finished good is more attractive to those operators when it comes to keeping up with demand.”
He adds that with other traditional pizza cheeses like Mozzarella being a fresh cheese, by pre-shredding and sealing in a bag, Winona Foods is helping to extend the shelf life for its customers.
“If we put it into the bag, it extends the shelf life and gives the operator more flexibility on their end,” Starkey says. “Our process of redistribution helps our customers turn product more often.”
As the world starts to return to a new normal and consumers return to more in-person dining, pizza industry stakeholders still expect demand to be robust.
“It’s hard to tell where customers are going to shift in the months to come, as more restaurants open back up in many ways,” D’Elia says, “but the industry needs to remain nimble and ready to serve an evolving customer base.”
Richmond says that absent of any additional government involvement like last summer’s Farmers to Families Food Box Program, Toppers doesn’t anticipate any major shifts in demand.
“Cheese pizza has always been a customer favorite, and we believe it will remain that way for as long as we’re selling pizza,” he says.
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Source: Cheese Market News