Pieology’s chapter is the newest signal of issues within the fast-casual pizza sector. | Photograph: Shutterstock.
A decade in the past, a bunch of restaurant chains emerged with the easy concept of bringing the fast-casual, customizable enterprise mannequin to the pizza enterprise.
Chains like MOD Pizza, Blaze Pizza, Pieology, PizzaRev, &pizza, Pie 5 and others used superfast ovens and single-serve, customizable pies. The pattern lured a number of the most profitable restaurant chains, too. Chipotle invested in Pizzeria Locale. Buffalo Wild Wings purchased PizzaRev at simply three areas.
We, too, thought it had some legs, given the obvious success of MOD and Blaze and the idea that pizzas may very well be had throughout lunchtime. After which the mainstream media picked up on this and wrote story after story about chains racing to turn into “the Chipotle of pizza.”
However no person grew to become the Chipotle of pizza. At greatest, these chains imitated Baja Contemporary.
This week, one other identify from that period declared chapter, when The Little Brown Field Pizza, dad or mum to Pieology, sought Chapter 11 debt safety.
This has adopted the declines and struggles of chains like Pie 5 and PizzaRev. MOD Pizza, the biggest of the fast-casual pizza chains, in 2021 was planning an preliminary public providing. However by final yr it flirted with chapter and was revealed to be what a number of sources described as a large number. It’s nonetheless closing areas.
In Pieology’s case, in keeping with courtroom filings, the corporate purchased out 29 underperforming franchise areas from its largest franchisee. The corporate purchased the areas by merely forgiving past-due royalties. The deal was predicated on the infusion of latest funding money into the corporate. That funding fell via.
Pieology went via with the acquisition anyway “to keep away from litigation threat and forestall the collapse of the franchisee’s operations.” The consequence as an alternative was drained liquidity and in the end a chapter submitting.
Gross sales amongst fast-casual pizza chains declined 5% final yr, in keeping with information from Restaurant Enterprise sister firm Technomic. Every of the 5 largest fast-casual pizza chains, together with Pieology, noticed gross sales declines.
The sector was undone by a handful of various components. As a lot as something, the pandemic hastened its decline, shifting shoppers dramatically towards takeout and supply, which harmed a gaggle of companies largely constructed on in-store gross sales.
And certainly, as a result of these corporations must make their pizzas shortly, they use principally thin- crust pizzas that don’t do nicely when consumed 20 minutes later.
Even earlier than the pandemic there have been chains experimenting with “bigger, sharable” pizzas and drive-thrus that recommended the enterprise mannequin wasn’t working in addition to many thought it will.
On the identical time, many of those companies had funding money and grew nearly recklessly, which was clearly the case with MOD.
But the pizza enterprise as an entire has slowed. Fast-service pizza gross sales fell final yr, too, declining lower than 1%. Three of the six largest fast-food pizza chains—Pizza Hut, Papa Johns and Papa Murphy’s—all noticed gross sales declines in 2024.
All three proceed to wrestle this yr. Yum Manufacturers is making an attempt to promote Pizza Hut, patrons backed out of buying Papa Johns and Papa Murphy’s dad or mum MTY Meals Group is in the marketplace after its personal inventory weak point.
Possibly the U.S. shopper is simply sick of pizza.
