A report by Mintel indicates that while an improved U. S. economy has been good for consumers, it has not proved to be advantageous for retail pizza brands, which have lost sales because more consumers favor restaurant pizza as their spending power recovers.

However, according to Mintel’s “Pizza-US, June 2014” report, to improve their sales, brands can target consumers with quality products that resemble those found at pizzerias, only for lower cost, and continue to provide convenience that pizzerias cannot match.

Eye on Demographics

Store-bought pizza competes with restaurant/takeout/delivery pizza, which a majority of consumers perceive to be better than store brands. More than six in 10 respondents report eating takeout/delivery pizza in the household in the last six months, compared to the less than six in 10 who report eating frozen pizza during this time. Close to half report eating restaurant pizza. These results point to the competition store-bought frozen brands face from restaurant/takeout/delivery pizza.

However, store-bought brands can look to specific demographics to help stave off steeper declines in the coming years. For example, respondents aged 18-34 report the most likelihood to eat store-bought frozen or refrigerated pizza. This suggests brands should target consumers in this age group with marketing that aligns with their interests; including pizza with hand-tossed or whole-grain crusts, all-natural/organic varieties, and low-fat/low-calorie types.

Mintel cautions that population growth among those aged 18-34 is not forecast to be significant between 2014 and 2019, indicating that brands must find additional ways to increase consumption among this group to take advantage of its likelihood to eat store-bought pizza.

Households with children also represent an opportunity for store-bought brands to decelerate slipping sales. The presence of children is a strong indicator for consumption, due to kids’ love of pizza and busy parents’ love of its convenience. However, the percentage of households with children is declining, indicating that brands must find ways to increase penetration and consumption among households with kids.

Consumers Seek Quality

More customers who choose frozen pizza are looking for a product that resembles a restaurant offering. More than four in ten respondents whose household uses frozen/refrigerated pizza say they tend to buy pizzas with naturally rising crusts, while more than a third of respondents say they tend to buy pizzas with hand-tossed crusts. These results indicate that quality crust is a key attribute for consumers and one that they likely closely equate with restaurant-style pizza. Similarly, a quarter of respondents report buying craft/artisan pizzas, suggesting that a number of consumers look for store-bought brands that provide premium quality or unusual flavor combinations. Two in ten respondents report buying pizzas with toppings they have not previously tried.

More than half of those surveyed by Mintel whose household uses frozen/refrigerated pizza report interest in a wider variety of pizza styles, such as New York or Sicilian style. This result underscores that many consumers are looking for pizza varieties that restaurants offer and offers brands that provide a range of styles with an opportunity to better compete with pizzerias.

Does Premium Equal Fresh?

Consumers want to eat healthy, but may not consider pizza a food type that helps them achieve healthy eating goals. Rather, many consumers likely view pizza as an occasional indulgence that allows them to forget about healthy ingredients and simply enjoy an infrequent or semi-frequent treat. However, among consumers who eat frozen pizza, many likely prefer that these products contain quality ingredients. Some 54% of respondents say it is worth it to spend more on higher quality store-bought pizza than regular store-bought pizza, suggesting that a majority are willing to pay more for a better frozen pizza.

Some top brands have made premium a key attribute and marketing strategy. For example, DiGiorno improved the taste of its Naturally Rising Pizza sauce, claiming that its new blend of herbs makes it fresher tasting. Freschetta uses the “Made Better To Taste Better” tag to market its products. Red Baron is positioned as “Premium Quality.” The premium theme employed by these top brands signals an emphasis on quality over health.

As consumers shift toward fresher foods, however, frozen brands may not compare as favorably with restaurant brands. Brands that highlight their lack of artificial ingredients are likely to be viewed as closer to fresh pizza than other brands that do use artificial ingredients. For example, Freschetta states that: its dough rises for one whole hour, naturally, with no chemical leaveners; it uses only all-natural cheeses; it uses four whole tomatoes to create the sauce for one pizza, and its sauce is never pre-cooked; and that it uses premium meats. Attributes such as these may persuade buyers who prefer fresh foods to select Freschetta if they opt for frozen.

Restaurant at Home

Even as the air goes out of the pizza at retail market, brands have an opportunity to decelerate losses by focusing on the types of pizzas that consumers are most interested in.

Specifically, although industry sources report that healthier pizzas represent a growth area for the category, it is more likely that most consumers perceive pizza to be an occasional indulgence, indicating that premium ingredients will likely resonate with buyers more than health attributes. Brands that provide products that mimic the styles found at restaurants, with naturally rising or hand-tossed crusts; a wide variety of flavors, including unusual flavor combinations or craft/artisan styles; and side dishes such as wings, breadsticks, or deep-fried potatoes, are likely to resonate among pizza eaters more than BFY (better-for-you) claims. Continuing focus on convenience, including single-serve and smaller format pizzas, is also likely to help prevent further losses in the coming years.