Pizza Hut Swings for the Fences

Pizza Hut’s unveiling this week of a complete brand overhaul sheds fresh light on the big choices restaurants face in keeping up with changing consumer tastes. The question will be whether it’s an example of “too much, too late” or of reaching beyond what core customers and restaurant staff want or can handle.

Bucking a trend of chains developing spinoff concepts as growth vehicles, Pizza Hut opted most notably to revamp its menu, making the already customizable pizza even more customizable and offering more-healthful choices. The new options in toppings, crusts and drizzles reflect a focus on consumers’ desire for greater choice, more upscale ingredients and innovative flavors. This will give Pizza Hut a more differentiated approach versus its major segment competitors of Domino’s Pizza, Papa John’s and Little Caesars, while retaining the size and convenience dominance over smaller fast-casual brands like Blaze, PizzaRev and Pieology.

The 56-year-old company clearly needs a dramatic boost to stay competitive. Across the category, pizza chains have struggled to reconcile pizza’s strength as an indulgent yet affordable meal with its weaknesses as a less-than-healthy and group-oriented rather than personalized offering. Among the top chains, Pizza Hut has found itself in a kind of no-man’s land between the leaders focusing on quality—Papa John’s—and low price—Little Caesars. And even those brands, like others, have attempted to broaden their appeal and stake more lunchtime territory with salads, appetizers, sandwiches and desserts.

To its credit, Pizza Hut has gone all-in. They are adding higher-quality, trending ingredients such as fresh spinach and Peruvian cherry peppers, crust flavors such as ginger and salted pretzel, and flavor drizzles for customization. Among a range of new specialty pizzas are five more-healthful options with 250 calories or less per slice. An updated digital platform will make ordering even more interactive and visual, optimized for mobile users as well as online. The company is even making its uniforms and brand logo more contemporary.

All of these changes are squarely in step with changing consumer demands and would seem to chart a successful path similar to that forged by fast-casual leaders. Today’s diner is far less loyal than in the past and far more receptive to innovation, so Pizza Hut’s brand refresh could lure back lapsed customers or give non-users a reason to place their first order.

But there is reason to question whether rolling out this many changes simultaneously is the most prudent move for a major chain. The operational complexity to which franchisees and corporate staff will have to adapt may create short-term declines in consumer satisfaction with greater opportunity for error. The new image may confuse older, more traditional customers who have grown up with Pizza Hut and see the changes as moving in the wrong direction. Finally, being able to adapt on the fly to tweaks during the rollout will be difficult with so many changes on such a large scale.

With the growth of the fast-casual segment, there will continue to be a great deal of competition in the marketplace and a battle for share of stomach and share of the pizza category.  Those chains that keep it simple, fast and accurate will have an advantage over those that stretch too far from the core and away from what made the brand successful.

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Darren Tristano

Darren Tristano is President of Technomic Inc. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations.

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