December 15, 2014 |

Stand Out

By John Gutekanst


Breakfast Pizza, bacon, eggCreating a signature dish takes thought, preparation

 

13 years ago, one radio broadcast changed the way I do business forever.

I was still trying to eke out a profit from a menu with 28 toppings. I had a great volume deal and several specials that included discounted pizza with breadsticks, soda, cheese breads and salads — but my revenue was flat and the magic of owning my own business was quickly turning stale. Several pundits I had sought out told me to just “go after the low hanging fruit” and mimic the menu-mix of the large corporate pizzerias as they led the pack. I did this with gusto but something about fighting a corporation on the same playing field seemed idiotic.

That’s when it happened. The typical slow and gloomy Tuesday befitted my mood as I banged out dough balls in the back of my pizzeria. National Public Radio was broadcasting a story about how the luxury car industry, most notably the expensive car companies like BMW and Porsche, were creating lower-priced cars to capture the younger yuppies who made between $50,000 and $75,000 a year. This was called “tiered pricing” and was designed to enhance revenue and grow brand loyalty with drivers while not taking away from the mega-rich-driver market. This move created more revenue on the margins of their existing businesses and enabled young urban professionals to own a new luxury car.

The thought exploded in my head. Tiered pricing was exactly what I needed…in reverse! I realized that the only way I was trying to entice customers to buy my pizza was with price. So I came up with a line of 10 specialty pizzas with four toppings each and some great funky names to go with them like the Godzilla, Meat Mountain and Chupacabra. These pizzas were designed to have more weight per topping and, in return, were more expensive than my much-discounted topping menu. Once I unleashed this list upon my customers, the change was instantaneous! More people became Avalanche Pizza addicts by trying my combinations such as artichoke hearts, roasted garlic, roasted red peppers and pesto for the first time. And chicken became a topping contender in my menu mix. My staff seemed much more enthused about the freaky goodness they were doling out and a new era was born. Now I offer more than 40 specialty pizzas.

Starting any new menu takes planning. When I opened numerous restaurants in hotels, the first planning meetings usually ended up in large-scale brawls because of differing ideas, but all these meetings covered the following:

  1. What is your market? This includes subtexts like average household income, education,
    demographics and even topography (will they drive over a mountain)? Don’t be too conservative or negative with this topic because Americans are more culinary-savvy than ever these days with all the shows on cable.
  2. Who is your customer? In the pizza industry, this is easy. Even the stodgiest foodies love pizza! The more important question is: How am I going to capture the customer who isn’t mine now and what will entice them to change loyalties?
  3. What is your brand? We’ve all branded our business whether we did it intentionally or not. Will you try to introduce a traditional line of wood-fired Neapolitan pizzas if you have a cartoon character as a logo? Will new customers take your new line of signature pizzas seriously if you have a traditional wood-fired place and want to introduce cheese whiz?
  4. Who are your competitors? As an independent pizza maker, the best advantage you have is being able to pivot fast. The large, clunky corporations have slow responses, heavy advertising burdens and inconsistent follow-thru compared to a fire-brand blasting a new, fresh pizza line at customers. My marketing consistently makes fun of these corporate chumps because of their inferior products covered up by slick plastic and hyperbolic advertising statements.
  5. Will I make any money on each and every signature pizza? This is where the rubber hits the road. Many factors play into this, like how much you are going to spend on marketing until sales of the pie go viral and if the revenue generated from this pizza outweighs the fact that it may be a “loss leader” (meaning it has a higher food cost than other pizzas but attracts more customers to your brand). This is how I start with each pizza in my market, which is a town in one of the poorest counties in Ohio.

Bring down every topping to its ounce cost:

  • Case is 10 pounds at $50
  • Two bags per case weighing 5 pounds each are $25
  • $25 divided by 5 pounds is $5 a pound
  • $5 a pound divided by 16 ounces is 31 cents an ounce.

If you are using 4 ounces of this product on your new signature pizza, it costs you $1.25.

Now add everything on this pizza up. (Don’t forget packaging.)
Dough is 45 cents
Sauce is 13 cents
Cheese is $1.45
Topping one is .5 cents
Topping two is 56 cents
Topping three is $1.25
Box is 45 cents

The total cost of this signature pizza is $4.64, (not including labor). So if your market demands that you sell this pizza for at most $14.99, you will make a pizza gross profit of $10.35 and your food cost is 31 percent!

This is how you go about determining whether a new signature dish belongs on your menu.

John Gutekanst owns Avalanche Pizza in Athens, Ohio. He is an award-winning pizzaiolo, baker, teacher, speaker and author and has been featured in Gastronomica, Food Arts, National Geographic, Alimentum Food Journal, Food Network and Best Food Writing, 2012.

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