While flat breads topped with cheese and sauce have been around since antiquity, the pizza pie as we know it originated in 17th century Naples. It wasn’t until the 20th century in North America, though, until pizza became an established dining selection, and it took until the 1950s before the tomato pie really became the popular staple it continues to be today. While pizza is typically thought of as an American (meaning United States) food, one of the early pizza pioneers was in fact Canadian. In 1967, Michael Overs opened a 300-square-foot restaurant in Toronto, Ontario called Pizza Pizza. To ensure that delivered pizza remained hot, Overs worked with a local car upholsterer to create the first insulated pizza delivery bag, one of many innovations initiated for the pizza industry by Pizza Pizza.
Forty one years later, Overs is president and CEO of the largest pizza chain in Ontario, with more than 567 restaurants and a newly refreshed entry into Montreal, Quebec markets. Approximate annual sales exceed $416 million in Canadian dollars in which more than 29 million orders are served every year and more than 10 million telephone orders are taken. Now, with the recent 2007 acquisition of Edmonton, Alberta-based Pizza 73 (59 stores in Alberta, three in Saskatchewan and one in British Columbia), Pizza Pizza extends the size of its business pie. Pizza 73 holds a 15 percent share in Alberta, and is the number one brand in Edmonton and Calgary; it served over two million customers in 2007 while also being the biggest seller of chicken wings in western Canada. System wide sales exceeded $75 million.
“The Canadian pizza market is very similar to that of the United States, with three or four major national chains, a few strong regional players, and then the local mom and pop stores,” explains Pat Finelli, vice president of marketing. While the company competes against some of the same chains popular in the United States, such as Pizza Hut and Little Caesers (which is prohibited from using its widely recognized “pizza pizza” slogan in the Canadian market due to territory restrictions), it maintains its leadership position with a combination of savvy marketing and community involvement.
Almost from its outset, Pizza Pizza established an easy to remember rhyming phone number (the last five digits are pronounced “seven eleven eleven”) that serves as a centralized, single ordering number for all its stores. Perhaps not coincidentally, Pizza 73 uses the same centralized number concept; you guessed it, “seventy three, seventy three.”
Pizza Pizza is also heavily involved in sports sponsorships, from the professional to community levels. The company has sponsored Canadian professional hockey, football, basketball and baseball teams. A high-scoring forward offensive line of the hockey Ottawa Senators is referred to as the “Pizza Line” by the sports press because whenever the home team scored six goals and won, fans could trade their tickets in for a free slice of pie at traditional restaurants the following day. A similar promotion with the Toronto Raptors basketball team entitled ticket holders to a free slice the day following any game in which the home team scored more than 100 points.
Finelli emphasizes that individual franchises are also active in their local communities, sponsoring youth sports club, arts and cultural activities. Pizza Pizza provides donations to more than 200 charities throughout Canada, including children’s causes and health and education. In October 2007, for example, Pizza Pizza raised $80,000 for Big Brothers and Big Sisters through its “Slices for Smiles” fundraising efforts with in-store donation boxes at its restaurant locations coupled with a corporate donation to reach this amount. A fall 2008 one-day fundraiser called “Cheese for Charity” will again offer customers discounted cheese slices and medium cheese or pepperoni pizzas, with a portion of all proceeds donated to the Children’s Miracle Network. Similarly, Pizza 73 has donated approximately $38,000 worth of pizza and champions vital causes such as the Alberta Children’s Hospital through fundraising and volunteering.
The company is also concerned about adopting more sustainable and environmentally friendly practices. It is also using recycled materials for its pizza boxes as promoting recycling of the boxes themselves. In addition, direct deposit of flour into Pizza Pizza silos eliminates use of hundreds of thousands of flour bags.
MENU FOR SUCCESS
While Canada hasn’t experienced the same economic downturn as in the U.S., Finelli is confident that Pizza Pizza is relatively protected against any possible slide in consumer spending trends. “We haven’t seen anything so far to indicate tightening of discretionary spending, but, if anything, QSRs (quick serve restaurants) tend to be recession resistant; in fact, we benefit when the economy is in a down cycle. People still like to go out, but, instead of a white table cloth restaurant where they might easily spend $100 on dinner for two, they’ll go to somewhere considerably less expensive that is still a night out for them to enjoy a quality meal.
He adds, “It’s also an ideal place for families to bring the kids to enjoy a night out. In fact, a pizza is really more of a group experience, with everyone being able to voice an opinion about what type of toppings they want and everybody getting to share the same meal together, as opposed to everyone ordering their own separate thing.”
Pizza Pizza is well positioned in that respect as a result of its latest store renovations. “We still are the number one delivery chain, but we also always had a sizeable walk-in business,” Finelli says. “About 12 years ago we expanded our restaurants to accommodate 20 to 40 seats, with an average 2,500 square foot store size. Today we are one of Canada’s leading QSR operators on top of being the leader in terms of slices sold and pizza delivery.”
One way that Pizza Pizza maintains its leadership position is constant innovation. “We’re always listening to our customers and staying attuned to the latest trends,” Finelli says. “These days, everyone is looking to include healthier fare on their menus. Well, we were the first pizza chain to provide an entire trans-fat free menu (not including naturally occurring trans fats) including a whole wheat multi-grain dough and gluten free crust. Health-conscious consumers appreciate that, and they remember who was first to market.”
OUTSIDE OF THE BOX
Pizza 73 has been the only pizza company to offer chicken wings as a substitute for a pizza, and the demand for chicken on the Pizza Pizza menu has also grown significantly, with chicken wings, bone in chicken, bites and strips.
Finelli notes that the company also has non-traditional sites of about 500 square feet that operate as part of the concessions at sport centers, universities, corporate buildings and hospitals across the country. “These are operated seasonally therefore only open for limited hours or select seasons during the year, but they can be very profitable.” He adds also that the restaurants are emphasizing lunch menus more. “Customers are looking for quick midday meals and pizza is a perfect choice. That’s why we introduced the selling of slices, as opposed to entire pizzas, to facilitate more of the lunch crowd traffic that wants a quick bite and isn’t going to order a whole pie.”
Pizza Pizza understands the quality of brand recognition and fully intends to profit from its Pizza 73 acquisition by maintaining its brand identity. “Pizza 73 will continue to operate as it always has,” Finelli says. “Our long term strategy in expanding further into other regions across Canada is to either acquire a strong player and maintain its identity or, if there are no strong regional restaurants, grow the Pizza Pizza brand organically.”
Nor will the different franchising arrangements change for the two brands. Pizza Pizza operates 10 corporate-owned stores for the purpose of training and testing new menu items. Otherwise, all restaurants are independently-owned franchises. Pizza 73 stores, however, are all 50/50 joint ownerships between the corporation and the operator.
“Pizza Pizza’s rise to the top of a crowded marketplace isn’t by accident,” Finelli emphasizes. “Considerable time and effort has been spent throughout the organization to provide consumers with, as our slogan says, ‘the best food, made especially for you.’”
Which is a recipe for success that can’t be topped.