Dive Brief:
- Top-your-own fast casual pizza concept Blaze Pizza may be eyeing an IPO within the next two years. Co-founder Rick Wetzel told Bloomberg that the chain would like to expand to 500 units while expanding delivery and takeout.
- With the introduction of 14-inch pizzas, Blaze is also extending its options beyond its signature 11-inch personal pizzas to support its delivery growth plans — a move meant to check Domino's, Bloomberg reports.
- Bloomberg reports that Blaze’s system sales were up 23% last year, to $341.5 million.
Dive Insight:
Aside from longevity — Domino’s was founded in 1960 and Blaze in 2011 — there is a massive sales and footprint discrepancy between these two brands, so planning to go public and take on the delivery giant is an ambitious goal to be sure. According to Technomic data, Domino’s Pizza was the No. 9 biggest chain by sales at the end of 2017 (the last available year with this data) with $5.9 billion in sales and about 5,600 units. Blaze was No. 136 with about $271 million and 230 units. Since that data was released, however, Blaze has ballooned to 316 locations in 42 states in five countries, Bloomberg reports.
But Blaze has deep-pocketed support thanks to investor LeBron James (among others) and a significant foodservice pedigree thanks to founders Rick and Elise Wetzel, who created 300-plus-unit Wetzel’s Pretzels in 1994.
If the company wants to double its footprint and woo investors, focusing on off-premise business is a good start. As competitor Pie Five has learned, the allure of physically visiting a store and shuffling through a queue has become somewhat cumbersome in a hyper-convenient era facilitated by delivery and carryout. Consequently, off-premise sales overall are estimated to account for 37% of total restaurant sales, or $209 billion, this year, according to the 2018 Takeout, Delivery and Catering Study conducted by CHD Expert. That number is expected to jump to nearly 50% by 2023.
The timing also seems right to go after the big players — two out of three are experiencing significant declines right now. Papa John’s sales were down 10.5% in July, while Pizza Hut continues its struggle to find traffic gains.
By extending its menu to include 14-inch pizzas, Blaze is clearly making the case for delivery, since customers will be less likely to pay delivery fees for a personal pizza. Bloomberg reports this offering size, combined with Blaze’s discounts, takes a page directly from the big players. As the company comes up to speed on product size and delivery, Elise Wetzel maintains that Blaze will have a major differentiator — it is a more modern concept, with toppings such as arugula, pesto and vegan cheese. But attempts to get “modern” via unique toppings have been attempted by Pizza Hut and were pulled from the menus. So while Blaze aims to offer similar convenience-focused services, it would be wise to choose target audiences differently.
Though there is a bit of a risk involved in expanding aggressively in an industry that is largely oversaturated, the pizza space is an exception to the rule. The North America pizza market is expected to grow 10.2% in the next four years, which bodes well for Blaze's plans.
