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'Inspired Food': Frozen Pizza Exec Talks State Of Industry, Praise From Dave Portnoy

Pizza's status as a family-friendly staple is here to stay, American Flatbread owner Brad Sterl told Benzinga.

· 09/03/2020 17:15

Pizza's status as a family-friendly staple is here to stay, American Flatbread owner Brad Sterl told Benzinga.

40 Pounds A Year: Prior to the COVID-19 pandemic, the average person reportedly consumed close to 40 pounds of pizza a year, Sterl said. Despite a surge in demand for pizza during the pandemic, consumers are unlikely to get sick of pizza as it comes in many different shapes, forms and endless topping potential.

"If you want to make your own pizza you can go into your fridge and I bet you will find something to pull it together," Sterl said in an email.

The only way consumers will become fed up with pizza is if the quality starts to decline. The frozen pizza segment as a whole deserves credit for stepping up the quality of their products to better compete against restaurants.

Pizza is "such an inspired food" to the point where all it takes is one innovative chef to create something new and "next thing you know it's all over the place," Sterl said.

Frozen Versus Fresh': Pizza delivery chains like Papa John's Int'l, Inc. (NASDAQ:PZZA) are introducing new products. But the chains are merely launching what higher-end restaurants have already done and "they try to adapt the flair of it."

However, freshly made pizza from a delivery chain degrades in quality from the time it takes to leave the oven to when it is delivered. By contrast, frozen pizzas could offer a better quality pizza fresh out of the oven.

But this isn't to say that the frozen and fresh pizza segments are at battle with each other. Quite the opposite, as a consumer could buy a frozen pizza at the grocery store to put away in the freezer and place an order for takeout the same day.

Related Link: Papa John's August Metrics Show Continued Momentum

American Flatbread Pizzas: A typical American Flatbread frozen pizza consumer isn't interested in toppings like cheeseburger pizza or chicken taco pizza that Domino's Pizza, Inc. (NYSE:DPZ) recently introduced.

"We're typically trying to focus on the fresh ingredients, how they can be used, and the flavor we can create with them," he said. "We tend to march to the beat of our drum and make sure we're developing products our consumers are interested in."

Consumer Behavior: Frozen pizza sales returned back to pre-pandemic levels although American Flatbread is an outlier with sales trending 20% to 30% above the group average, he said. Part of the reason for a loss of momentum can be attributed to several factors, including limited or restricted restaurant re-openings and a seasonal drop in demand as consumers prefer grilling in the summer months.

But consumers may return back to frozen pizza, especially if they were satisfied, he said.

Plant-Based Alternatives: The plant-based food group has advanced so much over the past five years, he said. The innovation is happening fast and demand for plant-based alternatives will go "through the roof."

"It's all about taste," he said. "If it's good, people will buy it and eat it. If plant-based becomes more price competitive and it costs what it would for a regular product, things change exponentially and it will be a big game-changer."

Dave Portnoy Is A Fan: Famed pizza aficionado and Barstool Sports founder Dave Portnoy counts himself a fan of American Flatbread pizza. In an April review of a frozen tomato sauce and three-cheese pizza, Portnoy rated it a very solid 7.1 score, declaring it a "real good, healthy frozen pizza."

Sterl said he knew Portnoy would be reviewing one of his pies in advance and there is a risk he could overcook it or just simply not enjoy the flavor. But even a nod of approval from a true lover of pizza like Portnoy doesn't necessarily translate to a surge in sales.

"We received a lot of online chatter, a lot of emails, and consumer comments through Facebook it definitely helped," the pizza owner said. "I think a really bad review from Portnoy could hurt someone more than I think it helps a good one, as some of the bad ones got re-played constantly.