Q&A: Cheese Prices
Tim Ridout, via Facebook
Hey, Tim. Without exception, I can’t think of any ingredient that has gone down in price. Since cheese is the costliest ingredient on our pizzas, and we buy so much of it every week, it comes to mind first. The wholesale price of mozzarella is fixed every Friday afternoon at the Chicago Mercantile Exchange (CME). A weekly average for trading on the exchange based on supply and demand is posted under the weekly block average. Your distributor uses this price when they purchase. Since the block price is a starting point, costs must be added on before you receive it and pay for it.
Typically these costs to your distributor are not cheap. They pay for transportation from the dairy to the warehouse, transportation to your restaurant, warehouse and refrigeration fees, administration, the distributor’s profit and the salesman’s commission. You can see what they see every week by visiting PizzaToday.com and clicking on the “Cheese Market News” tab on the left side of the page.
After the distributor has all of the hidden costs added up, they pay the dairy, or broker, Block + xyz cents over. The price of cheese is very fluid. Surprisingly, every distributor I know doesn’t make very much profit selling cheese. After all is said and done, a nickel or dime a pound may be the entire margin they earn on a refrigerated, clock ticking, expiring commodity.
I bought all of my cheese from one distributor. I never asked him the price of mozzarella for the last 15 years of my business. We agreed with a handshake that I would pay him Block + so many pennies over. This is confidential information and his buyer will probably have to sign off on it. The question that begs to be answered is this: what’s a fair markup? The answer depends on several factors.
1. What kind of cheese do you desire? They are all not created equally. Budget cheeses will be less expensive than premium cheeses.
2. What is your weekly volume? Do you pay your invoices promptly? Do you play one distributor against the other for the cheapest price? Are you a loyal buyer?
3. Every step up the convenience ladder will affect the cost per pound. Diced and shredded costs about 20 cents a pound more than loaf. Also, blends increase the cost.
Generally speaking, you get what you pay for. Cheap cheese is just that. Premium cheese is not. Ask for samples from several manufacturers and conduct a blind, side-by-side bake off. Only then will you know the right cheese for you. That said, ask the distributor if they would quote you on a weekly locked cost based on how many cents over CME you can both live with.
Finally, if you don’t portion control cheese on every pizza, why would you even care what it costs? After I implemented using cheese cups for every pizza every time, my weekly purchases went from 1,000 pounds a week to 800. I have turned on hundreds of operators to my method, and the majority of them report a 20-percent reduction in cheese purchases afterward.
Big Dave Ostrander owned a highly successful independent pizzeria before becoming a consultant, speaker and internationally sought-after trainer.
Slice of Hope 2012
BY JEREMY WHITE, EDITOR IN CHIEF
If you caught the January issue of Pizza Today, you probably noticed the article that detailed last year’s Slice of Hope charity bike ride. With the help of approximately 200 pizza companies across the United States, Slice of Hope raised $100,947.46 for the Karen Mullen Breast Cancer Foundation (and counting … checks are still coming in).
As a new cyclist and someone who has seen loved ones suffer from breast cancer, the Slice of Hope campaign was quite gratifying. I want to help end this terrible disease, and I’m honored that so many Pizza Today readers felt the same way and supported the cause last year.
I’m hoping you’ll do it again in 2012. Just like last year, I’m in the process of putting together a small contingent of cyclists. We’ll go from Point A to Point B, mostly for fun (truth be told), in an effort to rally the support of pizzerias nationwide. By banding together as an industry, we make a difference in more ways than one. For starters, we help battle a deadly disease that has cut short so many lives over the years. But beyond that, we do something for ourselves, too — we show America that the pizza industry is the most caring, giving segment in all of foodservice.
If you think that doesn’t matter, think again. I have a pile of letters and e-mails on my desk right now from Slice of Hope participants. I read them from time to time for inspiration. One operator says he had his best lunch ever — by 40 percent. Another had a customer give him $200 for Slice of Hope. This patron lost a loved one to breast cancer and kept thanking the pizzeria owner profusely for taking part in Slice of Hope.
There are countless more stories just like this. This summer, as we lead up to Slice of Hope 2012, I’ll share some of them with you in the hopes that you are inspired to find your own unique way to make Slice of Hope a blockbuster day for your pizzeria.
INTERNATIONAL PIZZA EXPO 2012:
Next month, the “Show of Shows” returns to Las Vegas. If you haven’t already registered for International Pizza Expo, there’s no time like the present. What’s better than 10,000 pizza professionals under one roof, sharing expertise, tips and proven, profit-boosting tricks? While you’re there, please take a moment to stop by the Pizza Today booth and say hello to the editors, photographers and designers. We look forward to it every year.
Jeremy White, editor-in-chief
Texas has 3,261 pizzerias
The world’s first pizzeria, Port’Alba, opened in Naples, Italy in 1830.
Next month, more than 6,000 pizzeria owners and managers will attend International Pizza Expo in Las Vegas, March 13-15
Ray’s Pizzeria & Ice Cream Shoppe // Mattioli Pizzeria // Family Pizzeria
5140 Sunset Blvd.
Lexington, South Carolina 29072
This southern pizzeria marries New York-style pizza with a great American dessert, ice cream. Customer favorites are the Chicken Parmigiana at $14.99 for a 12-inch or the Pizza Capri with broccoli, sliced tomatoes, onion and zucchini at $14.99 for a 12-inch. All of Ray’s specialty pies are also available on a Sicilian style crust. The ice cream sundaes come in epic portions. The Mount Everest has eight scoops of ice cream, chocolate syrup, whipped cream and sprinkles for $12.99. If that’s not big enough, there is the Foot “Bowl” Super Sundae with 16 scoops of ice cream (more than 16 flavors to choose from) with all of the fixings for $29.99. Kudos for packaging a kids meal that includes a slice of pizza, small drink and a scoop of ice cream for $5.49. Fans of Ray’s can also shop its online store for garlic knots, zeppoles, biscotti, pizza dough and marinara sauce.
3381 NW Bucklin Hill Rd.
Silverdale, Washington 98383
Mattioli puts a twist on the traditional meatball appetizer by wrapping its meatballs in dough, baking them and serving with pizza sauce ($6 for six). The pizzeria that sits mere blocks from the Puget Sound breaks out its menu into Italian-style pizza and American-style, as well as pies that use its raw tomato sauce and other sauces like ranch, Alfredo, BBQ and pesto. On the Italian side, there is the Quattro Stagione with rosemary ham or Italian sausage, mushrooms, yellow onions, roasted red peppers and raw tomato sauce at $13 for a 12-inch. On the American side, the Chicken Bacon Ranch features ranch sauce, grilled chicken, bacon, diced tomatoes, red onions and cheddar cheese at $15 for a 12inch. Mattioli also serves up a light 16-inch ultrathin crust pizza with up to two toppings for $15.
1924 Jeff Davis Hwy.
What goes great with pizza? Hot wings –– and Family Pizzeria touts having the hottest wings in the area. Its Suicide Wings (13 wings for $8.99) are so hot, in fact, customers must sign a release form to eat them. Two other promo menu items dare the adventurers into the shop. The 28-inch Pizza Challenge entices two people to finish a 28-inch, two topping pizza in less than an hour to win challenge T-shirts, a free meal and $40. Think of the movie “The Great Outdoors” for its next contest. Steakosaurus Challenge entrants have 45 minutes to eat a six-and-a-halfpound Steakosaurus sub with five vegetable toppings. Winners get a T-shirt, a free meal, $20 and bragging rights. All of Family’s pies are available in the 28-inch size. But you won’t find any specialty pizza offerings as its menu lists toppings and allows customers to pick their fancy.
International Pizza Expo Has Something For Everyone
BY BILL OAKLEY, EXECUTIVE VP
There’s something for every pizzeria owner and operator at International Pizza Expo®, whether you’re an industry veteran or just opening your first store. If you haven’t already pre-registered to attend, you better start making plans NOW! International Pizza Expo continues to be the premier industry event for education, new products and services, networking and business-boosting ideas!
Have you ever heard the saying, “Education is the key to success”? We feel so strongly about continuing education that we’ve decided to expand our pizza-specific educational component to include more than 80 seminars, workshops and demonstrations. We’ve also added to our lineup several new pizza operators as speakers, and they’ll advise you on how to react to the challenges and issues facing our industry today. Our team of experts will educate you on how to survive and prosper in today’s economy. You’ll learn how to retain your core customers, attract new customers, improve customer service and create dynamic and meaningful marketing campaigns that really drive profits to your pizzeria.
March 12 is being designated as “New-Operator Monday.” This intense 6½-hour education program is FREE to registered attendees.
Or maybe you’re just looking for a few new menu ideas? If you are, check out our Power Panel on Building Blocks for a Profitable Menu and the International Pizza Challenge and Demonstration Areas. The International Pizza Challenge™ has become so popular that we’ve decided to expand the competition. This year, we’ll have divisions for Traditional and Non-Traditional, as well as new divisions for American-Pan and Italian-Style pizzas. We’ll bring together approximately 160 competitors from across the globe competing in the “Pizza World Championships.” Better yet, you’ll have the opportunity to watch and learn from the winners of each division, who will go head-to-head in our blind-box competition to see who will be the next World Champion Pizza Maker. What could be more exciting and spontaneous than watching four of the World’s best pizzaioli competing to see who’s the “Best of the Best”?
Do you want to party? Make plans to attend the World Pizza Games® Finals and Rockin’ Party. We’re pulling out all the stops this year to make sure this is the biggest and best party ever.
The bottom line? There will always be winners and losers, but only those pizzeria owners who arm themselves with industry knowledge and are willing to take action for positive change will have the ability to position their businesses for future growth and success.
Last but not least, remember that attending International Pizza Expo is a tax-deductible working vacation.
It’s all Pizza and it’s all for YOU!
Aldos Ristorante Italiano & BarNaples, Florida
Aldos Ristorante Italiano & Bar serves up New York-style pizza to the Naples, Florida area. Owner Kelly Musico, along with her husband, Aldo, support the local music scene by providing live jazz each week.
Q: How has offering entertainment three nights a week impacted your business, as well as its ambience?
A: At Aldos, we pride ourselves on being an active member of the South West Florida community. Supporting local musicians and artisans is paramount. Crafting a ‘family’ within a community requires partnerships. Our partnership with our Naples jazz musicians offers patrons an environment where good friends, great food, great conversation and dancing are customary. Our motto at Aldos is ‘Where you are treated like family.’
Q: As a dinner-only restaurant, have you considered opening for lunch service? Why or why not?
A: As a newly established restaurant over 10 years ago, Aldos was a lunch and dinner restaurant. Nestled within a golfing community with many lunch options available, we’ve maintained a dinner-only business. However, our commitment to the community and belief in providing only the freshest, best quality ingredients, we pioneered a lunch program with our local country day school. Aldos lunch program provides nutritious, healthy, organic lunches using locally grown fruits and vegetables to over 200 children ages 4 to 18 daily.
Q: You have a wide menu of pizzas, pastas and entrées. How do you keep your food costs down?
A: All of our meals are prepared fresh daily, by order. To ensure the highest quality and the most consistency, all ingredients are measured precisely for each serving. This maintains that only the freshest ingredients are served and eliminates any waste.
Q: Aldos offers an extensive wine list and bar offering. What role does your bar play in your business strategies?
A: Like a dinner table at Nonna’s house in Italy, pairing that wine with the aromatic, flavorful foods on the table completes the meal! Happy Hour specials allow our patrons to try new menu items and drink specials at half the price. Whether pairing our wines with our extensive menu items such as seafood, veal, pastas or pizzas, or tasting that Italian cosmo during Happy Hour, it allows our patrons to be a little more adventurous in their dining experience.
Q: What’s “Wheel it Wednesday” and how did it help drive mid-week traffic into your restaurant?
A: On Wheel it Wednesday, patrons would place their order and then spin to ‘WIN.’ The spin of the Wheel reveals a special prize. Prizes range from a free dessert to a free glass of wine, a free pizza to a free entrée, or discounts up to 30 percent off the entire bill. Each time the wheel was spun, the restaurant erupted in chants and cheers for the patron spinning. Every patron was a winner on Wheel it Wednesday!
HOLD THE MEAT
A variety of vegetarian and vegan options help diversify your menu
BY DENISE GREER,
PHOTOS BY JOSH KEOWN
While there are varying degrees of vegetarianism, let’s use the simplest terms. A vegetarian does not eat meat, fish or poultry. Veganism is where it gets a little more complicated. Vegans also abstain from meat, fish and poultry, with the addition of not consuming any animal products or by-products. They will not eat dairy, usually honey, or anything derived from an animal.While there are varying degrees of vegetarianism, let’s use the simplest terms. A vegetarian does not eat meat, fish or poultry. Veganism is where it gets a little more complicated. Vegans also abstain from meat, fish and poultry, with the addition of not consuming any animal products or by-products. They will not eat dairy, usually honey, or anything derived from an animal.
To clarify, here is a short list of some animal by-product ingredients you may have in your kitchen that would not be acceptable to a vegan:
Some breads (if they contain whey, butter, eggs or sugar)
Most beers (if they are filtered with gelatin, egg whites or sea shells)
Some salad dressings (if they contain lecithin, which are derived from animal tissue or egg yolk).
A good rule of thumb, Cunningham says, is this: “When in doubt, leave it out.”
Although there is no official guideline for restaurants to follow, Cunningham offers some helpful hints where vegetarian and vegan menu items are concerned. “It’s really helpful if the restaurant provides as much information as they can so the customer can make their own decision,” he says.
Cunningham also suggests providing an ingredients list, especially for items not made in-house. Kitchen and prep areas are vital to maintaining the authenticity of a meat-free offering. “Try to limit the opportunities for cross contamination between vegetarian and non-vegetarian items as much as you can in the limited space that you have,” he says.
Don’t forget to train your wait staff about how to answer questions about vegetarian and vegan offerings. Never let servers guess or suggest meaty menu items to those who have indicated that they abstain. “I’ve had servers who are eager to please me, so they tell me what they think I want to hear,” Cunningham says. “Actually what I really want to know was what the truth was.”
Carefully select items that appeal to a vegetarian or vegan. Vegetarians are looking for more than a cheese pizza. Diversify vegetarian and vegan options with ingredients that you already have in-house like veggies, fruits, beans and nuts. There are also a variety of meat substitute products like tofu and tempeh. There are a number of non-dairy cheeses based on the flavors of mozzarella, cheddar, Gouda, etc. Test them for consistency and be sure they melt to your liking.
“If you have to choose between a vegetarian and a vegan option, always pick the vegan option,” Cunningham says. “Even though there are fewer vegans than vegetarians, the vegan option is the most accepted to the widest range of vegetarians.”
It’s not just vegans and vegetarians looking for meat-free offerings. There are a number of reasons customers choose vegetarian or vegan pizzas. Some abstain from meat due to religious reasons. Those who follow a Kosher diet will often seek vegetarian and vegan options to be certain they do not violate animal restrictions. Some customers may not eat processed meat or are simply limiting their meat intake. “It could be people looking to reduce their calories or looking to cut back on saturated fat,” Cunningham says.
Peace o’ Pie, a vegan pizzeria in Boston, Massachusetts, has created quite the general public following. “The majority of our customers are neither vegan or vegetarian,” co-founder Miguel Danielson says. “In general, we think that more and more people are opening themselves up to eating more plant-based foods, and we offer a delicious and unique way to do so.”
Peace o’ Pie’s most popular pizzas include the EP, which features fresh spinach, sun-dried tomatoes, roasted garlic and smoky tempeh crumbles, and the MD (vegan apple sage sausage, onion and zucchini, sautéed in herbs and spices).
Creating a well-thought-out meatless menu may do more than get vegetarians or vegans into your store; it could also possibly be just what your current customers seek.
Denise Greer is associate editor at Pizza Today.
DANTE PIZZERIA NAPOLETANA-OMAHA, NEBRASKA
BY JEREMY WHITE PHOTOS BY RICK DAUGHERTY
Nick Strawhecker made plenty of stops on his way back home to Omaha, where he opened the city’s first certified Neapolitan pizzera in 2008. Born in Nebraska, Strawhecker moved around a lot beginning in his teens, when his family relocated to England for three years. During that time, and since, Strawhecker traveled extenisvely throughout Europe. This not only shaped his worldview, it also exposed him to a variety of foods that people simply do not encounter in the American Midwest. Strawhecker said these foreign excusrions tempted his palate and planted in his mind the desire to one day run his own restaurant.
A graduate of Johnson & Wales culinary school in Providence, Rhode Island, Strawhecker has also studied at The Italian Culinary Institute for Foreigners. He lived briefly in the Piedmont region as well as Tuscany.
“In particular, Tuscany really shaped me,” he says. Strawhecker says he found Tuscany to be an enchanting place, as much for its natural beauty as for its food and culture.
After leaving Italy, the enterprising chef worked at restaurants in Chicago and Philadelphia before finally circling back to Omaha. And, despite the various cooking techniques and styles of cuisine he’d worked with during his career, the authentic, time-honored and simple creation known as Neapolitan pizza wouldn’t release its grip on Strawhecker’s mind.
“Pizza’s our main event,” he says. “That’s what we feature — our pizza and our wood oven.”
Still, the menu, which changes daily, extends well beyond pizza. As a result, the menu mix is evenly split.
“Right now we’re running about 50/50,” says Strawhecker. “When we first opened we were doing about 80-percent pizza. But people have discovered that we’re not just pizza. The original plan from the very beginning was to offer much more. People have begun to try our pastas and other items. We’ve been doing this for two years now, so people are starting to understand that we have a menu that offers more.”
That balance, along with the daily menu change, fuels Strawhecker’s creativity and challenges his staff.
“Even though we print our menu daily and change it, there are core items, of course, that always stay on,” Strawhecker says when asked about the difficulty of changing the menu each day. “Really, though, we love it. We’re always adjusting things to keep it fresh and interesting. We’re constantly adding more stuff based on what’s in season and fresh.”
To accommoate Strawhecker’s desire to experiment, the 3,900-square-foot restaurant, which seats 85, has a large kitchen broken down into separate stations. While it all revolves around the wood-burning oven, the kitchen is complete with grills, fryers and everything else an ambitious chef would need.
“It’s a really big kitchen,” Strawhecker concedes. “What makes it difficult is that it is broken into two levels. To deal with that, we’ve divided it into three main stations.”
While most foodservice workers have to deal with cramped quarters, we had to ask if there is such a thing as ‘too big’ for a commercial kitchen.
“Well, before we opened my biggest concern was the timing between the various stations,” Strawhecker says. “But it has been working out well without any major issues.”
At Dante, everything but the bread is made in-house based on what’s available. That can be challenging in the winter, but, again, Strawhecker likes to test himself.
“Right now, with the cold weather (Pizza Today visited Dante at the onset of winter), I have carrots, beets and squash to work with,” says Strawhecker. “It can get difficult.”
Strawhecker calls himself a proponent of the slow food movement, which he says originated in Italy. Putting his money where his mouth is, he works with local suppliers for poultry, milk to make fresh mozzarella, pork, eggs, basil, greens and seasonal vegetables. He takes it a step further by making his own fresh mozz, ricotta and pasta.
A typical lunch menu will take advantage of these ingredients for salads, sandwiches, soup and pizza. At dinner, items like oven-roasted pork belly; pan-fried chicken livers; orecchiette with potato, taleggio and sage; and mushroom risotto star alongside the pizza.
Dante Pizzeria Napoletana also features a full bar and a lineup of espresso drinks.
“I couldn’t even imagine working in a restaurant with espresso,” Strawhecker quips, “particularly when it’s a Neapolitan theme.”
As one might imagine, Strawhecker took his restaurant’s name from the Divine Comedy, an epic poem by 14th-century Italian writer Dante Alighieri. One of the world’s most influential works of literature, the Divine Comedy is best known for its interpretation of an afterlife that includes hell, purgatory and heaven. Strawhecker even named his mobile wood-burning oven, which he takes to events throughout the year, The Inferno.
It’s a fun play on something distinctly Italian, and it provides Strawhecker with many branding advantages.
“We have a great agency, and they’ve been able to have a lot of fun with the theme,” Strawhecker says. “I like what they’ve helped us do with it.”
Jeremy White is editor-in-chief at Pizza Today.
Omaha couple finding success after starting small
BY JEREMY WHITE
PHOTOS BY RICK DAUGHERTY
When Tony and Dana Constantino were looking to increase family cash flow so their kids could attend top-flight schools in Omaha in 2003, they did what any reasonable person would do in that situation: they started a food truck business. All joking aside, the Constantinos either didn’t know or didn’t care that food truck operations typically don’t lead to riches. And it’s a good thing, too, because their ignorance (or was it courage?) has turned to something bordering on bliss at their pizza restaurant, Mangia Italiana, in Nebraska.
“We started by catering events,” Dana says. “In the beginning, we just wanted to be able to send our kids to private schools. If the business could pay for that, that’s all we expected out of it.”
Mangia Italiana’s recipes resonated with customers, however, and it wasn’t long before people were looking to get more of a good thing.
“People would ask us if we had a restaurant, where they could find us,” Tony says. “That was definitely a dream, but we didn’t really know where the catering would take us, like Dana said.”
Eventually, it took them into an Omaha neighborhood that could use a facelift — and a good restaurant. The Constantinos moved into an old home that had been converted to serve commercial purposes and began serving Old World recipes that had been in Tony’s family for decades.
“We don’t take short cuts,” he explains of his foodservice methods and philosophies. “If we can make it ourselves, we do. We prepare our foods from scratch every day. People notice that. It makes a huge difference.”
Tony spent several years in the pizza business before opening Mangia Italiana, and that time certainly would have influenced the way he does things with regards to working with pizza. However, as he points out, he falls back on heritage more than experience when it comes right down to it.
“Just about all of the recipes we use have come from my grandparents and their parents,” he says. “We do it the way they did it over in Italy.”
Tony admits he has made slight modifications and has even developed some of his own recipes, but that any changes to family recipes have been modest and have been done out of necessity to accommodate large batches.
While the economy has been brutal for the past six years, Omaha hasn’t felt the effects of it as harshly as other cities, says Tony. As a result, Mangia has managed to enjoy steady year-over-year sales growth. In fact, says Tony, “we’ve grown every single year since we’ve opened, sometimes in the double digits.” 2011, in fact, was Mangia’s best year to date, and the Constantinos expect 2012 to be even stronger thanks to some new growth plans.Still, there are always challenges.
“Sometimes it seems hard to keep up,” admits Dana. “The list of things you have to do each day grows and grows. There’s just so much to it. People don’t always think about the finanacial side, about the amount of time and work it takes just doing paperwork, or inventory.”
Then there’s the issue of managing human resources and deterring customer or employee theft. Dana recounts the time that Tony found lipstick on a bottle of liquor and later found out that one of the female employees was helping herself to swigs of alcohol during downtime. Lesson learned? “We lock it up in the basement now,” Dana says.
The aformentioned basement may soon be one of Omaha’s hotspots. The Constantinos are in the process of finishing it out to accommodate a bar and a private banquet room. It’s the next step in the growth process.
“We’ll be able to do a lot out of here,” Tony says. “It’ll make a great room for parties. And the bar might become a place to watch a Nebraska football or basketball game. People are getting pretty pumped up about Nebraska joining the Big Ten, and it’s already a big deal to watch their football games anyway.”
As Mangia Italiana moves from a small pizza joint to a $1 million operation, the Constantinos realize their original plan to cater their kids through school has turned into a rewarding long-term career. And it’s a great way to keep the family centered on a common purpose. Whether calling their older children in for help or turning to Tony’s father for house-made biscotti and guidance, Mangia, true to Italian form, has always been about family.
Jeremy White is editor-in-chief at Pizza Today.
Communication, defined roles critical to a successful partnership in the pizzeria world
BY DANIEL P. SMITH
PHOTOS BY JOSH KEOWN
Bob Wilson and Kevin Hershock’s relationship spans some 30 years.
Each calls the other a dear friend. The two talk regularly, sharing laughs, life’s turns, and Detroit Lions season tickets.
For the last 10 years, the two have also shared something else: five Hungry Howie’s stores in Western Michigan, a relationship both term “perfect.”
Though woes and battles devastate many restaurant partnerships, Wilson and Hershock have avoided any negative turns with a united focus on the success of their five pizzerias, defined roles, constant communication and genuine respect. “And there’s no reason for things to change,” Wilson says.
While many pizzerias remain sole proprietorships, many others adopt the multi-headed partnership model. An attractive financial set up, as multiple individuals share the investment and risk, partnerships can also produce a better quality of life as responsibilities are shared.
For all of its advantages, however, the partnership landscape remains littered with horror stories of broken trust, selfish acts and shuttered stores. “That’s no pleasant place to be,” Hershock says, adding that a single-minded mission from all sides regarding the work, the pizzeria’s culture, and a long-term vision sits at the root of any successful restaurant partnership.
To avoid the trappings of a fallout and optimize the partnership, many agree that transparent and consistent communication must take precedence.
Wilson and Hershock, for instance, talk three to four times each week about the business and neither hesitates to address something the other may have overlooked. Wilson may see certain numbers on an invoice and urge Hershock to investigate further; Hershock may wish to upgrade kitchen equipment and detail why it’s a wise investment.
“The constant communication creates a system of checks and balances to ensure the business is moving as it should,” Hershock says.
Adds Wilson: “We’re very open with what we need from one another and, in that way, nobody gets frustrated by what’s going on.”
At the one-year-old East-West Pizzeria in Las Vegas, Phyllis Barkin and her business partner, William Cartwright, have daily discussions about the business and decisions are never solo endeavors. Though there has been a learning curve for both, the daily interactions eliminate ambiguity and finger pointing.
“From hiring to marketing and payroll, everything’s clear. We each know what the other is working on at all times,” says Barkin, who likens a restaurant partnership to marriage and raising a child in that both parties have committed to one another and to nurturing the business. “There simply can’t be secrets.”
Defined roles add another key ingredient to the partnership mix. Fred Shandler and Dan Richer have been partners at Arturo’s Osteria in Maplewood, New Jersey for five years. Shandler says the key to their successful relationship has been the clear-cut, complementary roles each plays.
Shandler oversees hiring, training, and all front-of-the-house systems, while Richer delivers the back-of-the-house expertise. Combined with a sincere trust that each is offering his best effort, Shandler says the defined roles have catapulted the operation to quick success.
“We’re able to split our areas and maximize all of the moving parts a restaurant operation needs to address,” Shandler says.
Wilson and Hershock adhere to the same role-defining formula.
Though Wilson calls himself “hands on” with the three Hungry Howie’s outlets he operates with his wife, he rarely travels into the five stores he shares with Hershock.
“That’s not my role with Kevin. He’s the day-to-day operational leader there,” says Wilson, who refers to himself as “the financial guy” in the partnership. “We know our roles and understand what the other brings to the table.”
At East-West, it’s Cartwright who handles the finances and Barkin who directs the kitchen. To further boost the partnership’s success, each respects the other’s skills. Barkin honors Cartwright’s financial interest by not squandering his money, while he respects the foodservice experience and knowledge she brings into the kitchen.
“We know each other’s responsibilities and move forward,” Barkin says.
In the event that partners’ skill sets are not complementary, honest communication and role definition takes on added importance.
“I believe two chefs can be partners, but they can’t be battling over recipes. The two need to set clear roles and expectations for one another,” Shandler says, alluding to the oft-cited two-cooks-in-the-kitchen analogy.
Though Wilson and Hershock had both been in unsatisfying, failed partnerships before, neither hesitated in uniting with the other to open the Hungry Howie’s outlets. Given the friendship and respect the two share, creating a joint partnership was an easy call and remains a central component of their success.
“Neither of us want to let the other down, so we work hard to make positive things happen,” Hershock says.
In the year before creating their partnership, Shandler and Richer began sharing an apartment. Shandler says the experience proved invaluable. As each man gained a deeper understanding of the other’s character, a natural friendship and respect blossomed.
“It tested our partnership, but also built it,” he says.
Though Shandler knows few will mimic their co-habitation experience, he says the principle is the same for any successful venture.
“It’s about getting to know your partner on a deep personal level and developing a foundation of trust,” Shandler says. “That’s crucial to any successful partnership.”
A Wise Move: Crafting a partnership agreement
From operational to financial, partners come in all shapes and sizes, the mindset and goals differing from one to the next. To avoid partnership pitfalls, a well-crafted partnership agreement addressing such key issues as who’s investing what and when, profits, incentives, partnership buyouts, death, disability, and expansion issues is an absolute must.
“If the agreement’s done right and the roles and what ifs are defined, you should never have to look at it again,” says New York-based attorney Carolyn Richmond, who co-chairs the hospitality practice group at Fox Rothschild LLP.
Richmond encourages all potential partners to seek an attorney and accountant with hospitality industry experience, as both should understand the unique issues restaurateurs face.
“Take pains to make sure the right professionals are in place. You don’t want someone trying out their skills on you the first time,” Richmond says, noting that chambers [of commerce], restaurant associations, and small business development centers can be helpful resources.
Chicago-based writer Daniel P. Smith has covered business issues and best practices for a variety of trade publications, newspapers, and magazines.
Underperforming operations need to get SLOPPIE
BY BIG DAVE OSTRANDER
PHOTOS BY JOSH KEOWN
If your sales are increasing, give yourself a big pat on the back. If your sales are flat, and you are barely breaking even, welcome to the new normal. If you are afraid of what the future has in stock for your store, the clock is ticking. The longer the restaurant runs unprofitably, the less time you have for a turnaround.
Pizzeria interventions or turnarounds are never the same. I believe that several factors are present when a once-profitable store gets in trouble. Since 1990, I’ve been called in to turn around a hundred or more teetering operations. Next to grand openings, this is the hardest type of assignment I perform. No wonder people are fascinated with Chef Gordon Ramsey’s “Kitchen Nightmares”or Food Network’s “Restaurant: Impossible.” The process can get very emotional and ugly.
I have adopted a model to evaluate existing operations. I grade operations subjectively on the following criteria, with A being the best and F miserably failing.
I call it the SLOPPIE system –– but there’s nothing sloppy about it. In no particular order I look at these areas:
Sales — Is the operation grossing enough to generate a respectable bottom line? How many dollars per square foot of space per year?
Location — Is the location an A, B or C? Is it easy to get in and out? Is it relative to the core market (business, residential, schools)? Does it have busy neighbors that compliment sales? Does it have high visibility and great signage?
Operations — Is it a well-oiled machine or a nightmare when busy? How well is staff trained? Are standardized recipes, portion control, ordering, cash management, scheduling and written job descriptions in place? Are waste, theft and scheduling lean and mean? Are the financials complete, or are huge flags present?
Product — What’s the quality of all entrées? Is the food coming from the kitchen consistent? Is one cook significantly better than the rest? What procedures are in place to guarantee that every pizza, every time, is great?
Profitability — Is the restaurant making money? Are expenses too high?
Image and Identity — How effective is the advertising and marketing? Does the client have a unique selling proposition (USP)? Does the client have raving fans? What is the word on street about your place?
Effectiveness — Do the dollars spent have an effect on sales? Do they deliver on their promise –– or is it a same-old/same-old place?
Every operation is unique and report cards can’t be graded until I ask many questions. When I’m satisfied that I have the unvarnished information, I give each one of the above criteria a letter grade and a corresponding number grade. A’s = 4.00, B’s = 3.00 and so on. Then I add up all of the scores and divide them by the seven criteria and get the grade. When the report card is finished, we are able to address each area and develop a plan to get the place on the honor roll.
The absolute No. 1 area that I see in the field is the lack of accurate financial statements. Financial statements are similar to a medical chart that follows a patient who is under the care of a doctor. The doc needs to be sure that the vital signs are within norms. If the reporting system you use is easy to read, follows generally accepted accounting procedures (GAAP) for the restaurant/pizzeria industry, you are in the top 10 percent. Without a real, accurate financial starting point, all interventions are simply trial and error. Businesses make profit by design. Hobbies make money by accident. If you have never run your restaurant by the numbers you are drifting without a rudder.
The action plan almost always involves doing a food cost analysis. After a day of inputting current grocery pricing, menu pricing and portion sizes we’ll have, sometimes for the first time ever, an accurate dollar amount that each entrée on your menu contributes to your annual profitability. For me personally, this is drudge work. I’d much rather be on the line with my apron on running the crew than entering in a hundred weights and costs. I get very little joy in balancing a ledger by underlining the bottom line with two lines. If you get your jollies by working with P&L programs, good for you. If you are like me, you must have someone, an enlisted bookkeeper, certified public accountant or a like type who understands your business. Accountants either specialize in one or two disciplines or are general practitioners. I love them both, if and only if they can advise me and hold me accountable for profit and loss statements. If you don’t have to answer to someone every month you have no accountability.
This starts the slippery slope of failure.One constant in every profitable restaurant, be it either a single unit or a mega chain, is they have an iron grasp on expenses: food cost; labor cost; occupancy costs; sales per square foot ratios and prime costs. These terms flow naturally from an accountant who understands your business. If you are ever subjected to a scrutinizing audit, you’ll want an accountant in your corner.
Once I have a grasp on where the money comes from and where it goes, I look at vendor pricing. If those expenses are in the national norm I move on.
The next really big issue is the quality aspect of your pizza and other menu items. Is this one of the very best, unforgettable, delicious pizzas I’ve ever eaten? If not, why not? I truly believe that our industry will be divided soon. Customers will choose between inexpensive cheap pies or choose to spend their budget on their perception of the best.
Once I’m satisfied that my client is making praiseworthy pizza we move on to staff service. This is an overlooked area. We are not in the pizza business — we’re in the hospitality business. Right after the quality of the food comes service. It is your fault if any of your staff offends a guest.
Marketing is the first thing to go during economic downturns. I know it is hard to spend money on programs that have lame results. So you must get creative. I’m a huge believer in boomerang marketing. I advocate offering free samples with the understanding that customers will return once they taste a great product. I also believe you must have a memorable USP and tell your personal story. This is the glue that keeps customers returning.
If you are struggling, it likely took years to get to your current state of affairs.
As such, it will take some time to turn the ship around. If you still have the burning desire to succeed, then get to fine-tuning your store and get yourself back on the right track.
Big Dave Ostrander owned a highly successful independent pizzeria before becoming a consultant, speaker and internationally sought-after trainer. He is a monthly contributor to Pizza Today.
WHO NEEDS GROUPON?
Consider do-it-yourself alternatives to daily deals sites
BY KATHRYN KAWKINS
PHOTOS BY JOSH KEOWN
Last year, San Francisco Bay-area chain Patxi’s Chicago Pizza pulled off one of the most popular Groupon deals ever, selling nearly 7,000 “$20 of food for $10” coupons.
But despite the promotion’s overwhelming success, Patxi’s isn’t sold on daily deals sites. “I don’t think we’ll ever do it again,” says Blaine Whitney, Patxi’s vice-president.
Patxi’s sales spiked immediately after the Groupon’s sale, and again when the coupon was set to expire, but the store didn’t see any lasting impact from the promotion. Whitney believes that such sites don’t provide merchants with the metrics to understand whether customers are new or returning, and he thinks that Patxi’s new customer acquisition was minimal. “It felt like a huge giveaway to our existing customers,” he says. Statistics back Whitney up.
The research firm ForeSee conducted a survey of 2,200 daily deal buyers that determined that 38 percent of the purchasers were already frequent customers of the business in question. Just 31 percent were brand new customers.
The daily deals industry — which includes big players such as Groupon and LivingSocial, and hundreds of smaller regional operators — is incredibly profitable: Groupon alone reported $760 million in revenue for 2010. But the deal isn’t always quite as good for merchants. In addition to providing a substantial discount to customers, you’ll also need to split the coupon sales revenue with the daily deals company. That can leave you with minimal — or non-existent — profit margins.
“At first you have an influx of customers, but your expenses keep going up because the vouchers cut into your profit margins,” says Carolyn Brundage, a partner at Indiana-based Smashmouth Pizza, who’s sold deals on both Groupon and LivingSocial. “It’s not a good long-term marketing plan.”
Instead, consider these alternative strategies for increasing sales volume without sacrificing your profits to a third party.
Craig Agranoff, owner of Boca Raton, Florida-based specialty marketing firm The Pizza Experts, recommends sending vouchers containing restaurant credit to potential customers within your local zip code. “It’s the same as a coupon, but psychologically, consumers feel like it’s a gift card, so they’re more likely to come in and use it,” says Agranoff. He claims that his clients who’ve taken this approach have seen redemption rates around five percent. “People spend well above the amount on the card,” he adds.
There’s no need to rely on outside services like Groupon to create a group-buying deal. Pizzerias can create their own promotions using white-labeled daily deal platforms, such as Deal Co-op. Agranoff recommends encouraging e-mail newsletter subscriptions by giving away free slices of pizza to passersby who sign up, and promoting your deal offer on social media services such as Facebook and Twitter. When creating your deal, you can set your own “tipping point” to ensure that enough people will purchase the deal to make the promotion worth your while.
Collaboration can increase your marketing power even more. Rachel Rogers, who represents Nacoochee Village Tavern and Pizza in Helen, Georgia, combined forces with other local business owners to create vacation packages for customers from outside of the local area.
“Our coupon will?include something like a two-night stay, a dinner at our pizzeria and an attraction for a discounted price,” she says. “We send this out to our e-mail contacts and hopefully get some bites, bringing in customers?locally, but also providing enticing circumstances for consumers outside?of the local region to visit our pizzeria as well.”
Many pizzerias have found success by using mobile marketing services such as Foursquare and GoWalla, which allow you to advertise special deals for people who “check in” at your establishment at no cost to you. Offering free drinks when 10 people check in at the same time, for instance, can promote group sales; and providing free pizza to the person who checks in most frequently (dubbed “the mayor” in Foursquare) will inspire customer loyalty and a friendly competition to claim or keep the top spot. “We like Foursquare because when customers check in, it means they’re endorsing your business to their friends,” says Brundage.
You can also take advantage of mobile location-based services that send coupons to customers and issue “push” notifications to remind them of the coupons when they’re in the vicinity of your establishment. “It helps you get access to people who don’t even realize you’re there,” says Agranoff.
Also important is promoting yourself to the local community. Whitney says that Patxi’s Chicago Pizza has done well by marketing group discounts to local companies such as LinkedIn. “They’ll buy 100 pizzas at a time,” he says, and employees will often come back with their friends and family to purchase pizza on their own.
Sponsoring a local kids’ sports team is a winning strategy as well, says Agranoff. “When you get 20 seven-year-olds into your establishment for a pizza party at the end of the season, they’ll all be begging their parents to bring them back to your restaurant.”
How to Tell Whether a Marketing Technique Is Paying Off
When you’re trying out a new marketing technique, it can be difficult to judge the return on investment. Ask yourself these questions to determine whether your promotion is worth the effort:
1. Is it bringing in new customers?
Groupon and its ilk are notorious for sending you customers who already frequent your establishment. Pass out a survey card asking customers how they found you and whether this is their first visit to see whether a given strategy is attracting new visitors.
2. Are new customers coming back?
Getting new customers in the door isn’t enough. You want them to return. Issue customer loyalty cards so that you can tell how many of your visitors are recurring customers.
3. What’s the return on investment?
Consider how much you’ve spent on advertising or how much a discount is cutting into your profit margin, and calculate how much you’ve made in sales as a result of that promotion. If you’re in the negative, it may be time to rethink your strategy.
Kathryn Hawkins is a Maine-based freelance writer, editor and social media strategist.
YOUR SHOW HAS ARRIVED!
International Pizza Expo takes center stage in Las Vegas March 13-15
BY MANDY WOLF DETWILER,
PHOTOS BY PIZZA TODAY STAFF
When the curtain closed on International Pizza Expo last year, plans were already underway for the 2012 show –– and the turn of the calendar ushered in some changes for the annual event. International Pizza Expo 2012 will feature more operator speakers, exhibitors and competitions than ever before, and with good cause. An ailing economy, increased commodoties pricies and employee satisfaction and retention remain top-of-mind for most operators, and International Pizza Expo offers them a leg up when it comes to succeeding in a competitive industry. “No other industry event brings together pizzeria operators and experts in this magnitude,” says Pete Lachapelle, president of Macfadden Protech LLC, parent company to Pizza Today and International Pizza Expo. “With learning and networking opportunities and a show floor with everything the modern operator needs, Pizza Expo is a must-attend in these lean economic times. We have a proven track record of helping operators succeed. Just one new idea or product can incrase sales and give them a competitive edge.”
The show is slated for March 13-15 at the Las Vegas Convention Center. “I expect Pizza Expo 2012 to be the largest show ever in our 28-year history, with over 940 booths of pizza-related goods, equipment and services. International Pizza Expo –– the ‘Show of Shows’ for the pizza industry –– is the only place to do business, learn, network and deal,” says Bill Oakley, Macfadden Protech’s executive vice president.
The show kicks off Tuesday, March 13, with a keynote address from Nick Sarillo, who owns Nick’s Pizza & Pub in Illinois. Sarillo was dubbed the “Blue-Collar Millionare” by Inc. Magazine, and he’ll bring his ideas on building a positive employee culture, increasing sales and succeeding in a tough economy. On Wednesday, March 14, keynote speaker Marla Topliff, president of Illinois-based Rosati’s Pizza, will use her unique experience to discuss marketing, branding, carryout and delivery.
Pizza Expo guests will have several seminars from which to choose during the three-day show, with speakers in two tracts. The Pizza Pro Series focuses on operator-led sessions hitting today’s critical topics. Among this year’s speakers are a Pizza Today columnist, members of the World Pizza Champions, award-winning operators and both independent and franchise experts. The line-up of speakers is a dedicated effort by Pizza Expo staff to put “more focus on pizza industry peer-to-peer information from operators who have excelled in certain aspects of the business, and they’re willing to share with others,” says Bruce Allar, vice president of trade shows and conferences for Macfadden Protech.
The Industry Expert Series includes a lineup of professional speakers –– including several new to Expo –– that will address issues from menu development and competition to benchmarking, increasing productivity and handling taxes.
“This year, our industry specific educational program will include more than 80 business-boosting seminars and demonstrations,” Oakley says. “We’ve also lined up several new industry speakers, developed new topics and planned new events to make this the only show you’ll need to attend to find out about new trends, products and services in the pizza industry. Today’s hot-button topics — such as social media marketing, employee retention methods, menu design and labeling, dough do’s and don’ts, and many others — will be thoroughly covered. Better yet, we’ve tapped top pizzeria operators to present about 40 of these sessions, making one-half of our program true peer-to-peer exchanges of inside-the-industry information.”
Expo will also host a new Power Panel each morning, which brings together operators and experts for in-depth discussions. “We’re really excited about our new Power Panels that are sure to jump start each and every show day,” Oakley says. “This year, you’ll have the opportunity to learn from some of the brightest and most successful pizzeria operators in the U.S., including: Dan Collier, owner of five Southern California-based Rusty’s Pizza Parlors; Jacque Farrell, founding-family member of six-unit Farrelli’s Wood Fire Pizza in Washington; Tony Gemignani, who co-owns three pizzerias and a pizza school in California, and George Hadjis, founder and CEO of 16-location Oggi’s in Southern California.”
Demonstrations will be held throughout the show, teaching attendees how to make everything from fresh mozzarella to Neapolitan pizza. Tim Weekly of General Mills and Tom Lehmann of the American Institute of Baking will hold a Pizza Crust Boot Camp in two parts on both Tuesday and Wednesday for those needing to kick start their dough recipes.
The International Pizza Challenge (IPC) returns to this year’s Expo, with a few changes. The Traditional Division allows contestants to use two of five ingredients atop a tomato-based red sauce. Anything goes in the non-traditional division. New this year are the American-Pan and Italian-Style divisions. Contestants will bake in regional heats in premilinary rounds on Tuesday and Wednesday. The first-place winners from each division will compete in a blind-box bake-off for the title of World Champion Pizza Maker.
Four past competition winners will compete in the new Best-of-the-Best Bake-off, an exhibition event which includes an blind-box competition between four former challenge winners. The winner will return next year to compete again.
The World Pizza Games return with six events, including: freestyle acrobatic dough tossing (broken into masters and amateur divisions); fastest dough; largest dough stretch; fastest pizza box folding and longest spin. Last year’s fastest box and spin winners broke industry records. Annual titleholders are invited to return to defend their titles in 2013. The Games culminate at the 2012 Rockin’ Finals Party on Wednesday night, which is free and open to attendees and exhibitors.
During the International Pizza Challenge’s final competition on March 15, show operators will give away a cash prize during the $20,000 MEGA BUCKS Giveaway. Game pieces will be given to attendees, who must visit sponsoring booths on the show floor. The drawing will be held after the Pizza Maker of the Year finals, and contestants must be present to win.
“The bottom line is there’s always something new you can learn or see at Pizza Expo that will improve your pizzeria and boost your sales,” Oakley says. “Attending an industry trade show is the best way to obtain new industry knowledge, insight and ideas that can help you position your pizzeria for future growth and prosperity.”
For more information or to register for International Pizza Expo 2012, visit www.pizzaexpo.com or call (800) 489-8324.
Mandy Wolf Detwiler is managing editor at Pizza Today.
| Keep up with the latest trends, profit making ideas, delicious recipes and more. Delivered hot
and fresh to your email every Wednesday.