Pizza industry by the numbers
• The number of pizza restaurants and carryouts is projected to increase at an average rate of 1.6 percent each year over the next five years to 80,083.
• Overall pizza industry revenues are projected to grow an average of 2 percent a year over the next five years to $43.4 billion.
• The largest chains and their U.S. market share: Pizza Hut, 15.1 percent; Domino’s, 9.8 percent; Little Ceasar’s, 8.3 percent; Papa John’s, 6.5 percent.
• Independent operators owned 54.3 percent of all pizzerias in the U.S. in 2014 and generated 40.9 percent of the industry’s sales.
Source: IBISWorld “Pizza Restaurants in the U.S.” Industry Report, March 2015; PMQ Pizza Magazine 2015 State of the Industry Report
A new skirmish is threatening to re-ignite the Miami Valley’s pizza wars.
The latest battle is not among the traditional carry-out or table-service pizza restaurants already slugging it out for market dominance and customer loyalty, but in a relatively new — at least to much of Ohio and the Midwest — segment of the pizza-restaurant market called “fast-casual.” That’s where customers choose their own toppings in a serving line similar to Chipotle or Subway, and their custom-made pies are then fast-baked in three minutes or less in an blazing-hot oven.
The fast-pizza concept has taken the West coast by storm in the last few years, but the first Dayton-area fast-casual pizza restaurant opened only a month ago in Washington Twp. across the street from Whole Foods Market. Rapid Fired Pizza was co-founded by Ray Wiley, who also co-founded Hot Head Burritos and who has operated multiple Subway sandwich locations — all sharing a similar serving line in which customers watch their pie assembled before their eyes.
“Fast-casual pizza is a rapidly growing segment,” Wiley said. “I’ve been studying the concept for a long time. There are a lot of players, most originating out west.”
Rapid Fired was the first to stake its claim on the Dayton area’s market, and Wiley — who has helped guide Kettering-based Hot Head Burritos to expand its footprint to more than 65 locations in six states since it was founded in 2007 — has big plans for the budding pizza chain. He already has designated the site of the second Rapid Fired Pizza on Colonel Glenn Highway near Wright State University, and he says he’s working on as many as seven or eight more in the Dayton-area market.
“We expect to have six stores in this market by the end of the first quarter of 2016,” Wiley said. And he’s talking with potential franchisees in Florida, Michigan, Texas, Indiana and Kentucky.
Ohioans clearly love their pizza. Overall, the state of Ohio already has a disproportionately large number of pizza restaurants and carry-outs. According to IBISWorld, a Los Angeles-based independent industry research firm, Ohio has 3.7 percent of the U.S. population, but supports 5.4 percent of the nation’s pizza restaurants.
IBISWorld market analysts are bullish in their outlook for pizza restaurants across the country over the next five years. In a March 2015 analysis of the national pizza market, IBISWorld projected that overall revenues will grow 2 percent a year on average to $43.4 billion by 2020. That level of growth would be significantly higher than the 0.2 percent average revenue increase of the five years from 2010-2015.
Dayton-area diners appear poised to do their part to fuel that growth. This region’s pizza market has long been dominated — some might say saturated — by venerable Dayton-based chains such as Cassano’s Pizza King and Marion’s Piazza; by national chains such as Pizza Hut, Domino’s, Little Caesar’s and Papa John’s; and by the dozens of smaller chains and single-store independents that call the Miami Valley home.
In recent years, however, other smaller, mostly regional chains have invaded those established market players’ turf. LaRosa’s, Godfather’s, Dewey’s and Jet’s have all entered the market in recent years, with Jet’s opening its fifth Dayton-area location in Beavercreek just last week. Even grocery stores have grabbed a slice of the pie: two Dorothy Lane Market grocery stores now cook up specialty Naples-style pizzas that utilize a fast-bake concept but not the same assembly-line service line as fast-casual pizza shops.
And Rapid Fired may soon have some company in the Dayton area’s fast-casual pizza market.
Two pizza chains with similar concepts — MOD Pizza and Pizzafire — are planning to enter the Dayton-Cincinnati area, each with as many as 10 locations across southwest Ohio. Another chain, Blaze Pizza, opened a location in southern Warren county last year, and its franchisee, Darla Bowen, says she is “currently looking for the right locations in Dayton to expand.” And Pizzeria Locale, a fast-bake pizza concept backed by and affiliated with Chipotle, has chosen Deerfield Twp. as its second Cincinnati-area location. It first location, in Kenwood, is under construction.
Of the chains targeting the Dayton area, MOD Pizza appears to be farthest along in its development efforts. The Seattle-based chain — which opened its first fast-bake pizza restaurant in 2008 and is considered the pioneer of the fast-casual pizza idea — has entered into an agreement with a franchise partner, Lexington, Ky.-based Cool Dough Development.
And Fast Dough is conducting a fast search for suitable restaurants sites: “We’re looking at Centerville, Englewood, the UD area, Kettering … we’re looking all over the Dayton area,” Garyen Denning, managing partner of Cool Dough Development, said last week. “We intend to have one or two locations open in 2016.”
Plans call for opening 10 MOD Pizza restaurants in the Cincinnati-Dayton region, including three to five in the Dayton-Springfield area, Denning said.
MOD Pizza’s CEO, Scott Svenson, said in a phone interview with this newspaper that his company is pushing to expand throughout the Midwest. It opened its first Michigan location in suburban Detroit four months ago. By the end of this year, MOD expects to have about 100 locations in 15 states.
The pizza sector of the restaurant industry is huge — second only to burger-themed eateries — “but it has had a shockingly low level of innovation in the last 10 to 20 years,” Svenson said.
The fast-casual pizza concept is an exception, and Svenson acknowledged MOD Pizza has drawn “a lot of imitators.” But the co-founder said he’s optimistic his company’s restaurants would fare well in a competitive environment.
“A lot of people jumped into this because they’re attracted to the opportunity, not because they’re experienced (restaurant) operators,” Svenson said.
The newer Pizzafire chain based in northeast Ohio is looking for a franchisee or franchisees in the Dayton-Cincinnati region, according to Ryan Rao, Pizzafire’s director of franchise sales. Pizzafire has opened restaurants in recent weeks in Cleveland and Akron, and plans to open four or five more in northeast Ohio before the end of the year, Rao said.
The chain was founded by Sean Brauser, the founder of Romeo’s Pizza, which operates 34 locations in Ohio, and previously had franchise-owned pizza carry-outs in Beavercreek and Kettering that operated briefly before closing in 2012.
Rao said Pizzafire’s goal is to open 100 units in five years, including about 10 in the Dayton-Cincinnati region.
“We see the Cincinnati and Dayton region as a growth market for us,” Rao said.
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