Pizza - Global Annual Review - 2016
Overview
 
●	Sales of retail pizza in the US were estimated to grow by a solid if not spectacular 1.7% in 2015 to exceed $6 billion
●	The US retail pizza market saw its global share of pizza NPD crash between 2014 and 2015, as Nestlé cut back on launch activity
●	Amid disappointing sales, Yum Brands cut loose its Pizza Hut business in China, as Pizza Express makes its high-end entry 

It is unlikely that the US retail pizza sector will look back on 2015 with much fondness. Annual sales of pizza at retail were estimated to have grown by a solid if not spectacular 1.7% in 2015 to exceed $6 billion, according to Pizza – US – October 2015. With the economy looking brighter, consumers have been trading up and out of retail pizza, to more expensive delivery and foodservice options. This corresponds with 2015 being the first year on record in which Americans spent more on dining out than on groceries, according to government data. With fast casual chains like Blaze Pizza and Pieology rapidly expanding their national presence, and Domino’s continuing to enjoy positive sales momentum, frozen pizza makers have been under huge pressure. 

Nestlé had a leading 40% market share in 2015 but its launch activity was down by nearly a third compared with 2014. The company’s total sales across a range which includes heavyweights like DiGiorno and Tombstone fell by 3%. And with Schwan also scaling back launch activity, the total number of pizzas launched in 2015 was down by around a third compared with the previous year. As a result, the US saw its global share of pizza NPD decline from 13% in 2014 to 10% in 2015. The situation is not much rosier in Canada, where a continued over-reliance on discounting ensured the market value declined again in 2015. The rare retail successes to come from the North American region are coming from premium brands, which place a strong focus on artisanal production. For example, Bernatellos Pizza Inc. in the US has seen notable success with its Brew Pub Lotzza Motzza brand, achieving nearly 135% growth in 2015, a notable feat even for a company with a market of less than 2.5%. 

European retail pizza brands have also invested in premiumisation to help compete with the threat from the out-of-home channel. In the UK, retail volume sales of pizza have suffered owing to more expensive, premium lines coming through in the dominant private label sector, according to Prepared Meals Review – UK – May 2015. Even consumer tastes in less established markets have become more sophisticated. Chinese consumers demonstrate a growing appreciation for authentic Italian pizza, spelling bad news for Pizza Hut, which more resembles an American/Chinese fusion fast food joint. Pizza Hut’s owner, Yum Brands, cut its China division loose in October 2015, making it a separate franchisee of Yum Brands. With this in mind, it was excellent timing for high end pizza chain Pizza Express to accelerate its expansion plans and buy its Chinese franchise partner in June 2015. 

Low oven and freezer ownership remains a barrier for the growth of retail pizza in other developing markets like the Middle East and Africa, while the increased number of launches in the Asia Pacific region in 2015 corresponds with a leap in ownership of microwaveable pizza launches. Increasing urbanization in developing markets is driving ownership of microwaves ovens – more so than larger-sized and more expensive conventional ovens.

FIGURE 1: Total retail value sales of pizza, US, 2011-15*
  
* forecast

Source: Based on Information Resources, Inc., InfoScan Reviews; International Dairy-Deli-Bakery Association, US Census Bureau, Economic Census/Mintel

FIGURE 2: Total value sales of the UK pizza and pasta takeaway market, 2011-15*
  
* forecast

Source: Mintel

FIGURE 3: Global retail pizza NPD, by top five countries, 2011-15
 
	2011 	2012 	2013 	2014 	2015 	
	% 	% 	% 	% 	% 	
France	9	9	7	9	11	
USA	19	19	17	13	10	
UK	16	14	8	5	10	
Spain	7	8	7	8	8	
Canada	9	6	9	10	5	
Other	40	45	52	55	57	

Source: Mintel GNPD

FIGURE 4: Global retail pizza NPD, by top five regions, 2011-15
 
	2011 	2012 	2013 	2014 	2015 	
	% 	% 	% 	% 	% 	
Europe	58	61	58	60	65	
North America	28	24	26	23	15	
Asia Pacific	6	7	7	8	11	
Latin America	5	5	6	6	6	
Middle East & Africa	2	3	2	3	4	
Other	0	0	0	0	0	

Source: Mintel GNPD