Iconic Tour

How millennials are building the next iconic pizza chain

Americans share a love affair for pizza, consuming a shocking 350 slices every second, but if you want to see a slice of the future, watch how a millennial pulls a piece from the pie. They are responsible for an increasing share of a U.S. pizza sales market expected to reach nearly $45 billion this year, up from $38.5 billion in 2015, according to Pizza Industry Analysis 2016.

Far from being the typical go-to food accompanied by a round of beer on a night out with the guys, pizza is largely being consumed by millennial females — as much as 63 percent, according to PMQ Pizza Magazine.

Sam Diephuis | Getty Images

This younger generation not only look for healthier options but also consider the experience as significant as the food itself — an important consideration for entrepreneurs looking to cash in on the evolving pizza market, as today's 80 million millennials buying pizza are expected to outspend baby boomers by 2017, according to the report from Pizza Industry Analysis.

Today there are about 70,000 pizzerias operating in the United States, with another 4,800 set to open by year-end. Most of the $45 billion in market share is going to the franchises. The top four chains — Pizza Hut, Domino's, Little Caesars and Papa John's — pulled in $23.5 billion in 2015, according to Pizza Industry Analysis. The reason: the ability of bigger companies to meet the changing requirements of the consumer.

These changing requirements are many.

Latest trends topping the market

The past few years have seen an enormous number of pizza establishments emerge to cater to the evolving marketplace, from gluten-free specialties and artisanal parlors with healthy options to the environmentally conscious and mobile pizzerias.

The fastest growth area today is fast-casual, a build-your-own pizza model designed after the Chipotle service model. Chipotle's parent company has launched its own pizza brand, Pizzeria Locale.

Buxton, a customer analytics firm, reports that millennials favor fast-casual pizza because it's inexpensive — around $8 to $10 a pie — and has a made-to-order design. According to Technomic, the fast-casual segment continued to lead the pack in 2015 with 11.4 percent sales growth, almost doubling the growth rate of any other dining segment.

One entrepreneur who is betting on this booming market is Brian Petruzzi, founder of 1000 Degrees Neopolitan Pizza, a franchise that offers customizable, authentic Neapolitan pizza on hand-tossed fresh dough. He defines the 1000 Degrees approach as fresh-casual, claiming it kicks the new pizza model up a notch by combining the concept of fast-casual with fresh ingredients in a fine-casual setting.

Customers ... want to be able to customize and make stuff their own. A lot of it is millennial-based. They like having control.
Brian Petruzzi
founder and CEO, 1000 Degrees

Launched in 2014, Petruzzi already has 25 1000 Degrees franchises up and running — in New Jersey, Michigan, Arizona, Texas, North Dakota, Florida and Connecticut — along with two locations in Malaysia. By the end of 2016, Petruzzi, who is also the pizza chain's CEO, plans to have at least another 30 U.S. locations open. "As far as signed agreements, we have well over 100. In Florida alone, we have 45," he said.

A lot of 1000 Degrees' success, says Petruzzi, is its transparency. "Customers want a lot more input into what they're getting. They want to see that the ingredients are fresh, and they want to be able to customize and make stuff their own. A lot of it is millennial-based. They like having control," he said.

Brian Petruzzi, founder and CEO of 1000 Degrees Neopolitan Pizzeria
Source: 1000 Degrees Neopolitan Pizzeria

The menu boasts fresh, high-quality ingredients, including artisan-made cheeses and imported meats. Customers can choose from more than 50 toppings, from the traditional tomatoes, mozzarella, pepperoni and garlic to thinly sliced rib eye, grilled chicken, pineapple, jalapeno, banana peppers, bleu cheese, a smoky bourbon barbeque sauce and more. The 10- and 14-inch pies, priced between $5 and $17, depending on the market, circulate through a 1,000-degree oven and are done in 2 minutes.

Petruzzi says that while the food is ready quickly, his customers are in no rush to leave. "We're fast to get you your food, but we bring the food to your seat so you can sit back and relax. We focus on the dine-in experience."

To emphasize their fresh-casual approach, 1000 Degrees recently began offering self-serve beer and wine. "Dine in represents at lunch about 65 percent of our business and at dinner about 50 percent of our business." Petruzzi said.

A family-first approach

While many of the newer chains focus on catering to forward-thinking millennials, one chain is defying the demographic buzz, focusing on the tradition of celebrating family and embracing the community.

The California-based Pizza Factory is a communal hub for pizza lovers where patrons sit and enjoy the traditional fare at long communal tables. Rather than delivering pizzas to you or having you grab them on your way home, Pizza Factory is a place where families and friends can relax and know they're likely to see a friend.

According to Mary Jane Riva, the chain's president and CEO, the concept seems to be working. Pizza Factory currently has 115 locations in six states in the western half of the United States — and Pizza Today ranks the company as the 41st biggest chain in the country, with 2015 sales of $60.3 million, a near-$10 million improvement over 2014.

Riva bought the company in 2012 for an undisclosed sum after owning five of her own Pizza Factory franchises, the first of which she purchased in 1989. She believes that dining together provides a warm, embracing experience.

"People are moving fast, but the bottom line is, they want to be able to sit down with their family and let their hair down and let their kids go," says Riva. "I believe community is all about that. And if you're going to go into a community, you should be part of it."

Over the next five years, Riva says she hopes to double the number of Pizza Factory stores and expand the company's footprint around the country.

"It's not rooftops we're looking for. We're looking for schools. We're looking for parks. We want to see community, and that's why we go into towns where others might not. Some of these smaller towns are our most successful stores."