Anybody Want A Pizza?

What credit unions can take away from Pizza Hut’s latest rebranding initiative.


pizzaPizza Hut took a swing at capturing the taste buds of the millennial generation on November 19 when it rebranded its website and logo and introduced a slew of new pizza flavors. The 56-year-old chain intends to show the 20-something age demographic that it is hip to their ways.

Pizza might just be the country's most popular food. A full 25% of the world’s cheese is destined to end up between crust and sauce. One in eight Americans consume pizza on any given day, equating to approximately 100 acres of the stuff consumed every day by Americans, according to the Department of Agriculture. It’s no surprise the competition over pizza market share can get hotter than a brick oven.

Callahan writer Drew Grossman threw down the cheesy gauntlet on Twitter when he expressed skepticism over what credit unions could learn from Pizza Hut's move.

Credit unions can take away a lot from this. If you’ve followed my writing on this blog, you know I’ve been known to compare and analyze companies from outside the credit union industry. Some of my ideas are good, such as the Kim Kardashian mobile game and the Hostess comeback. Others, not so much.

So without further ado, here are several lessons from Pizza Hut’s rebranding initiative.

Lesson 1: Understand The Writing On The Wall

With 6,300 nationwide locations, Pizza Hut is America’s largest pizza restaurant. But things are not all golden crusted for the pizza giant. Pizza Hut has posted eight straight quarters of sales decline. The reasons for this are three-fold:

  1. Pizza Hut is more expensive and not that much better than more convenient options such as DiGiorno. Why buy a pie for $14 plus tip when the freezer aisle has a close approximation for $7?
  2. Customization is becoming more important — think of Subway or Chipotle — and more customization comes at a higher cost.
  3. Dominos' own transformation in 2009 thoroughly improved the quality of its pizza and saturated media channels with glib marketing. Pizza Hut still owns the larger market share, but the gap has tightened. 

In this rebranding, Pizza Hut has in some way replied to each of these issues. 

As was the case with the Crumbs Bake Shop bankruptcy, consumers want to think what they are eating is both healthy and artisanal. Pizza Hut seems to understand this. It introduced “Skinny Pizzas” that have 250 calories or fewer per slice. It also added 11 new pizza recipes — notables include Cherry Pepper Bombshell and Sweet Sriracha Dynamite — 10 new crust flavors, six new sauces, five new toppings, and four new flavor-pack drizzles.

“If you look at the trends in food among young consumers, it’s about flavor exploration,” says Jared Drinkwater, vice president of marketing for Pizza Hut in an article for Fast Company. “We felt like nobody was doing that in pizza.”   

Of course, Pizza Hut matched its rebranding with a marketing push, and it's hard to overlook the influence of Domino's in the self-deprecating similarities Pizza Hut draws between itself and its competitor. Speaking of which ...

Lesson 2: Use Tension To Create A Positive Reaction 

If you watch Pizza Hut’s two-minute spot for its rebranding campaign, Flavor of Now, you’ll notice the conceit immediately. Pizza is Italian, but Italians don’t like Pizza Hut. The tension arises from a clear clash in values — traditional versus new school. To prove its point, Pizza Hut calls this out.  

“Without tension, no one pays attention,” Pete Favat, chief creative officer of Deutsch LA (the ad agency responsible for the ad) tells the New York Times. “Pizza Hut has all these exciting flavor combinations that go against traditional pizza values.”

The rebranding is a grasp for authenticity and differentiation. The chain isn’t afraid to own up to the truth that traditional Italians don’t like its pizza. But it’s also quick to point out why that's okay. Traditional Italians don’t have to like it because it’s not traditional pizza.

Lesson 3:How Much Change Is Too Much Change?

This is Pizza Hut’s fourth logo refresh in 15 years. The red hut remains in the logo, although now it’s secondary to what's meant to be a swirl of sauce. The move away from the hut coincides with a more significant move away from its traditional sit-down restaurants to delivery and carry out (Delco) locations that are half the size, cheaper to build ($422,000 for Delco versus almost $1 million for a traditional hut), and more adaptable to smaller towns and smaller physical locations. This is a trend that is occurring across various industries, including financial services. 

Other changes, like Pizza Hut's new customization strategy, might prove more challenging and harmful. Does a pizza need to offer pretzel crusts, Peruvian peppers, and honey sriracha sauce to attract 20-somethings? Or is this all superfluous?

Pizza Hut is betting on the former, but what if it's the wrong play?

“Pizza Hut may be doing too much too quickly,” says Darren Tristano, executive vice president at Technomic, a restaurant industry research specialist, to USA Today. “It would appear that the brand that has lost touch with the consumer is trying to change too much overnight.”

In this rebranding, Pizza Hut risks alienating or confusing its current customer base, Tristano posits.

Additionally, it risks falling into the same trap as McDonald’s. In 1948, McDonald’s offered nine menu items. Today, it offers 121. Although these items aren’t necessarily difficult to make, the longer assemblage time required for each lengthens wait times and threatens a core tenet of the burger joint's speedy service brand.

Pizza Hut now offers more than 6,000 combinations of pizza — each with its own complexity. Is it falling into the McDonald’s trap? When it comes to pizza, Pizza Hut might have bitten off more than it can chew.


Dec. 10, 2014



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