Operations – 2014 Ideas to Grow

by Peter Thor, President, Bellissimo Foods

 Just returned from the Las Vegas Pizza Expo where a number of key themes were discussed. Chief among these were the (1) higher food and operating costs, (2) changing structure of the industry and its suppliers , (3) increasingly health conscious consumers, and (4) new ideas to grow. Many operators asked what they should do?

Sadly, many operators are casting about looking for ways to reduce ingredient costs which ultimately will downgrade the quality of food produced. This doesn’t mean not to look for “new options”, because one should always be looking to improve. Cheap can be had at “chain” restaurants, and you’ll not be able to compete in the “cheap” department. Since repeat business is the lifeblood of the independent restaurant, sharp operators will respond with a variety of actions to both gain and retain customers.

The pizza and fast casual industry is becoming a tale of two markets. Success at the “low-end” and “high-end”  but not in the middle. The most rapidly expanding concepts are adding new premium quality offerings, dare we say “gourmet” appeal with special toppings and/or unique cooking like wood or coal fired.

While many of you have great experience in what works for you (please email us your success stories), we’d like to share some current successes of operators we admire. We focus attention on actions that can drive incremental sales and be versatile at the same time. New items on the menu are a versatile tool to both drive sales and improve profits. New items with special short term pricing can also gain trial and turn both products and customers into “regulars”. Add-on items like appetizers, sides, and desserts can help increase the average sale. Success depends on how you market the items and how well you train and incent your staff to sell them.

For the biggest impact, consider the “wow” factor. Taste, appearance, and perceived value are equally important. Consider the success of the San Marzano Trattoria in Freehold, NJ. After seeing how burratta, pesto, and sun-dried tomato strips look on pizza (Italian flag colors) they created a 12” pizzette. Pizza should be the most profitable item on the menu, even adding premium ingredients. They created this pizza, had the servers eat it so they could believe in it, and had an overnight gourmet success that customers were raving about. Items that use new ingredients in creative ways offer opportunities for new and diverse options. So too are items that are marketed to appeal to some of the more health related trends like using seasonal vegetables, gluten-free, high-fiber, and low-fat. Think about your customers and what appeals to them. Ask for their suggestions.

Another IDEA TO GROW uses a versatile product like chicken in new and innovative ways. We advocate using par-fried or pre-cooked chicken as opposed to raw simply because of the safety, quality, and consistency which can be achieved. Cost difference is very low after adjusting for shrinkage in cooking. A specific product which has been extremely successful because of its taste and appearance is the Bellissimo par-fried “Golden Tender”. In fact, this item won “New Product of the Year” for 2013.

Now being introduced is a “Golden Breast Filet” which can be used in a variety of applications; sliced on salads, sandwiches, chicken platters, and prepared entrees like chicken parmesan. Smart operators are having success with these new items and others like it for improved quality and consistency.

With beef and pork prices rising to record levels, chicken offers the one protein alternative that has not significantly increased in cost. Cheese costs too, which represents about 1/3 of the ingredient costs in a typical pizzeria, are going up. The USDA just increased its price forecasts for the year that, for the first time ever, cheese prices will average more than $2/lb for all of 2014.

Delco Foods is dedicated to the successful differentiation of its independent pizzeria and restaurant operators. Focus is the key; focus on developing a meaningful difference from the mediocre quality food served by the large chains. If you turn your back on uniqueness and copy the chain competition by buying the same products from the same distributors, then you ignore what can make you different, and better.

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