Times are tough for the pizza industry. Not surprisingly, the largest player in the
category, Pizza Hut, has been affected. It saw same-store sales drop 1 percent in the fourth quarter. Parent company Yum! Brands attributed the decline to a slowdown in the number of consumers eating out. Additionally, the pizza chain is off to a slower start this year than expected, as pizza falls under the “higher-ticket dinner occasion,” as Yum! Brands CEO David Novak said in a recent earnings call. Still, Pizza Hut CMO Brian Niccol attests that consumer demand for newer menu items such as lasagna and the WingStreet brand of wings are holding strong. These options, along with its pizza, make the chain a top source for “home meal replacement solutions,” he said. Niccol also discussed how the chain is driving value in a down economy and how it's taking its WingStreet brand of buffalo wings national. Here’s what he had to say:
Brandweek: How can Pizza Hut drive growth in this economy?
Brian Niccol: The big solution is for us to come up with home meal replacement solutions, whether it’s pasta, pizza or wings. Consumers are strapped for time. Some don’t have the cooking knowledge. As the economy takes its toll on consumers, the more you can give them with respect to what’s perceived as restaurant quality meals, and if it’s done in a fashion that’s affordable and ready for their households, [the better]. We’re one of the few pizza companies to actually come from a restaurant heritage. We’re updating and upgrading what a restaurant experience is like.
BW: Why did Pizza Hut launch all-natural pizza?
BN: There’s a big trend in general around having confidence in the foods that you eat. People over the age of 35, whose frequency with pizza is declining, said one of the big things that would reignite their passion with the category is to have a pizza made with multigrain crust and an all natural tomato sauce. Those are the big drivers. We’ve committed ourselves to a [natural] journey for Pizza Hut. Our sauce is all natural, as is the pepperoni we use across all [of our] pizzas. All of our vegetables are already natural. Over time, we will continue to upgrade our ingredients.
BW: Pizza Hut has new, red pizza delivery boxes and is test marketing a new logo called ‘The Hut.’ Tell us more about these initiatives?
BN: Design is a great way to create an emotional expression for your brand. But the pizza category has been a real laggard in doing that. Our red box is a game changer in packaging and design. And yes, we’re also introducing another vocabulary word with Pizza Hut, which is ‘The Hut.’ That ties in nicely with [today’s] texting generation. We wanted to make sure that Pizza Hut and ‘The Hut’ become common vernacular for our brand. Red is our mark and when you see that red roof, people will refer to it as ‘The Hut’ or ‘Pizza Hut.’ As we expand our online and mobile businesses, ‘The Hut’ is the perfect icon for our mobile generation.
BW: How’s WingStreet doing?
BN: WingStreet is continuing to expand rapidly within Pizza Hut restaurants (2,063 store units in 2008, approaching the 3000-unit mark this year). We expect to support WingStreet with national advertising within the next year.
BW: What’s your biggest game changer?
BN: Pasta. It’s a great meal solution for early in the week that consumers want. It’s easy and convenient. [Plus], it’s great tasting and they know their households will [eat] it.
BW: What’s your favorite?
BN: I’d get a lasagna, I’d have a slice of the natural pepperoni, and our WingStreet wings with the Honey Barbeque sauce. And then I’d be looking for dessert, of course.