The State of the Pizzeria Industry 2023
Given today’s restaurant business climate, it has never been more important to embark upon a comprehensive, deep-dive study of the pizzeria industry for the pizzeria industry. The goal of our analysis is to provide you, pizzeria operators and pizza professional, with a gauge of vital pizzeria insights, issues and trends. We surveyed 750 pizzeria owners from all 50 states to see what’s happening in America’s pizzerias. We combed through surveys, national reports and key industry indicators to bring you the State of the Pizzeria Industry.
In this feature, we’re providing you with an overview of what’s in the extensive report. Developed for you to apply to your business, use our findings to do the following:
- Get a barometer on how your pizzeria stacks up nationally.
- Explore pizza and menu trends.
- See how pizzerias are approaching operations, employees, marketing, etc.
- Discover the economic outlook for the pizzeria industry.
- Find leading pizza consumer insights.
The Indie Pizzeria Market
The Independent Pizzeria Market is made up of single unit operations and multiple unit operations, with the single-unit operation dominating the market. Amongst independent operation respondents surveyed, 73 percent of the pizzerias were single unit, while the remaining 27 percent operated two to nine units.
Today’s pizzeria operators are younger than they were 10 years ago when the average age of a pizzeria owner was 56. Over half of pizzeria operators are under the age of 55 (56%), and 26 percent are under the age of 45.
The casual dining concepts have been at the forefront of the industry for a century. Since the first “fast-casual” pizzerias opened in the early 2010s, we’ve witnessed a skyrocket rise in the concept. Today, fast-casuals have gained ground and are a fixture in the pizza segment. The top three concept segments include Casual Dining (40.3%), Fast Casual/Build-to-Order (27.6%) and Carryout and Delivery Only – DELCO (15.7%), making up 84 percent of the independent pizzeria market.
Dive deeper into the profile of the American independent pizzeria, including state analysis in the full report.
Let’s take a look at the knowledge we gained from an industry sales perspective. What are the numbers telling us?
When asked, “How do you anticipate your gross annual sales to perform in the next 12 months?”, the biggest answer was “flat”. 20.4 percent issued that response. 17.5 percent said they expect sales to increase 5-9 percent, however. Another 16.2 percent predict a 1-4 percent uptick in their shops. Meanwhile, 10.6 percent are eyeing a 10-15 percent boom.
That seems optimistic with the specter of a recession looming. The number of respondents that foresee a decrease in sales is in the vast minority — 22.2 percent think they’ll generate fewer sales in 2023 as compared to 2022. While that, again, seems quite positive, it doesn’t begin to paint the full picture. While gross sales may not lag once raising prices are taken into consideration (92.5 percent say they are increasing menu prices in order to offset higher costs of goods sold), that doesn’t mean profits will soar. In fact, there is less optimism on that front. In all, 41 percent of those surveyed said their profits will decrease in the next 12 months. Add to that number the 25.8 percent who project profits will be flat, and you have just one-third of respondents predicting an increase in profits.
Over the coming pages we’ll dive into many of the survey questions and answers that comprise the industry report, followed by analysis that will spill over onto PizzaToday.com and our Hot Slice podcast. You’ll want to follow all our channels closely in the month of December to get to the bottom of the data, our breakdown of it and our take on how we can use it, collectively, to better the industry in the future.
Help is on the Way … Or is It?
The refrain we’ve heard anecdotally for more than two years now: “No one wants to work. We can’t get help. We’ve tried everything, but we’re understaffed.” That rang through loudly in this survey as well.
When asked their top three priorities for 2023, 65 percent of respondents answered, “maintain current business.” 65 percent also answered “grow sales.” 38.7 percent included “add employees.” Aside from sales, the employee issue was the most top of mind.
Consider the following data on the topic:
37.9% have 10 or fewer employees. 22% have 11-12.
29.6% have an average labor cost in the
23-28% range. Another 26.1% carry a labor cost between 29-35%.
When asked if they had to adjust their operating hours due to a shortage of workers, 49% answered “yes.”
In an effort to keep help, 83.2% of pizzeria operators have increased wages. 24.8% upped pay by 4-6% to help offset inflation. Meanwhile, a nearly identical number (24.6%) said they raised salaries by 7-11%.
We also asked about employee benefits. You’ll see that data in our full report.
Hot Menu Trends
To stay up to date on the latest pizzeria menu trends, we examined what’s hot on menus, what’s being added and what’s being removed. From pizza styles to other menu categories, operators shared what’s trending on menus across America.
Who’s Got Style?
Pizzeria operators and pizza fans are adamant about their favorite pizza styles. Over the past several years, we ‘ve seen a movement towards offering multiple varieties. How has the trend resonated across the country? According to the Industry Survey, roughly 64 percent of respondents menu more than one pizza style. Just over 21 percent offer four or more styles.
New York is No. 1.
New York-style pizza reigns supreme as the most popular pizza on pizzeria menus across the nation. New York-style pizza has long been the most popular pizza in America. The first licensed pizzeria to open in the U.S. was Lombari’s, which opened in New York City in 1905. The versatile New York slice is crispy, a bit chewy, foldable and light on the toppings.
A surprise in the Top 5 pizzas offered in American pizzerias is the Chicago thin. Also called tavern-style pizza, these pies typically feature a crispy crust. They’re also quite often cut into squares. We rank America’s Top 10 Pizza Styles on pizzeria menus. See the list in the full report.
Styles on the Rise
We asked operators which style they intend to bring on the menu. Detroit is the top style. The square style features a medium-thick crust that’s light and airy on the inside, yet crispy on the outside. Dough expert Laura Meyer dedicates this month’s Knead to Know to the Motor City style. Read her article on page 20.
Three of the Top Five Pizza Styles on the Move are:
- Deep Dish
We go in-depth into the pizza styles at pizzerias in the U.S., including a full ranking of the Top 10 pizza styles being offered, a look at up-and-coming pizza styles in our full State of the Pizzeria Industry Report.
Pizza Toppings Trends
We have seen almost every pizza topping imaginable listed on pizzeria menus. We sought to find out what’s hot in pizza toppings. The findings blend a mix of classic toppings and innovative and creative options.
The Top Five Pizza Toppings list has remained the same for the past several years. But this year, a new ingredient has entered the Top 5 — Bacon. The “everything is better with bacon” mantra has made its way to pizza. Don’t miss John Gutekanst’s bacon story, “Crispy Business”.
Yes, pineapple has found its way onto our Top 20 Pizza Toppings list. The controversial topping has won over consumers to become a permanent fixture on pizzeria offerings. See all 20 top toppings in the full report.
While not yet on the Top 20, plant-based meats and cheeses are one of the biggest hot trends in pizza toppings. Plant-based ingredients are becoming mainstream on pizza menus. Many other operators are researching and adding plant-based options to their topping offerings.
Top Marketing Trends 2023
Today’s pizzerias are investing in marketing. Approximately 82 of pizzerias surveyed spend at least one percent of their annual sales on marketing, with 43 percent dedicating one to two percent and 26 percent budget three to four percent. Roughly 19 percent budget zero for marketing.
Social media remains the dominate marketing tool. When asked which social channel provides the best ROI, Facebook led at 57 percent and Instagram followed at 23 percent. See more on where pizzerias are spending their time and budgets on social and advertising in the full report.
We’ve scoured dozens and dozens of 2023 marketing trend predictions to give you a look at what’s hot and what’s relevant to pizzerias. Check out three of 10 marketing trends to watch in 2023:
Social presence will continue to be paramount with the following three areas leading the emphasis on major platforms: short-form video (Read the Video Shorts feature on page 38.), influencer campaigns and social commerce (buying directly from social accounts).
Marketing campaigns will be driven more than ever by analysis of market and demographics from first-party data with more precision.
Voice Search will require you to have tact-sharp search engine optimization (SEO) to be found when users prompt “Hey, Siri”, “Hey Alexa” or “Hey Google” with local pizza questions.
Find more marketing trends to watch in 2023 in our full report.
Our pizzeria industry survey is the most expansive and detailed research we’ve ever conducted. More than 750 respondents answered a series of questions designed to yield the most reliable data that paints the most accurate picture of exactly where the industry stands today and where it may be headed.
But what we did not do is poll the end user of your product — pizza consumers. That’s outside our wheelhouse and areas of expertise, so we turned to our friends from Technomic, Inc. for help on that lift through the 2022 Technomic Pizza Consumer Trend Report, Technomic Inc. Here’s a buckshot smattering of some important insights from the customer perspective that we think will be of interest to you:
- Consumers prefer the build your own pizza option 36% of the time.
- 33% prefer heavy cheese coverage.
- The five most preferred cheeses are, in order: mozzarella, Parmesan, provolone, cheddar, Monterrey Jack.
- Only 28% of consumers say they are likely to order dessert pizzas.
- Even fewer, 24%, are likely to order breakfast pizzas.
- 42% find an online ordering system where they can track their pizza order to be appealing.
- 38% want curbside pickup availability.
- 23% of American consumers would like to order pizza from their smart TV. That’s a 20% increase from 2020.
- Only 19% want to order pizza via QR codes.
- 28% of consumers say it’s important that the restaurants they order from have sustainable packaging.
- 21% are willing to pay more for pizza in eco-friendly sustainable packaging. That’s up 18% from 2020.
- 47% would like more restaurants to offer natural ingredients.
- 31% would like to see organic ingredients.
- 22% said they’d like restaurants to offer plant-based items.
- Only 23% said they would eat more pizza if healthier options were available.
- Meanwhile, 22% said they consider nutritional content when ordering pizza.
- 45% said the pizzeria they frequent most gets their business because it has the best overall taste.
- 65% said their pizza consumption will remain the same next year. 18% said it will increase slightly.
- 39% of consumers are ordering takeout or delivery more often than they were pre-pandemic.
Source: 2022 Technomic Pizza Consumer Trend Report, Technomic Inc.
The world pizza market is growing. The market is expected to increase by another $42.2 million by 2025, according to a Technavio release. North America is expected to see 44% of that growth. While industry indicators give a broad scope, we sought to take the pulse of the independent pizzeria operator. As we talk to pizzeria operators across the country, there is an uncertainty as they look forward to the coming year. Driven by volatility in inflation and cost of goods, operators are cautiously optimistic. Nearly 69 percent of operators remain optimistic about the pizzeria industry this year. Of that, 33.6 percent are very optimistic. Another 22 percent are neutral on the subject.
We asked operators to select their top business priority for the coming year. The top three include:
- Grow sales
- Maintain current business
- Add employees
Investing in technology has been a game changer. We asked operators to select all of the technology purchases they’ve made recently. Off-premise sales, projected to rise before the COVID-19 Pandemic, have sped up. Operators shifted and brought in new technology to help. POS systems and online orders are the most invested technology. Dive into more technology and sales and profit margin projections in the full report.
Access the full State of the Pizzeria Industry Report
The feature in the pages of Pizza Today is a snapshot of our complete findings in the State of the Pizzeria Industry Report. Go to our full report to get a deeper dive into what’s happening in pizzerias today. We provide in-depth analysis on operations, menus, sales, marketing, employees and an economic outlook. Access the full report now.