Taste, price key considerations for Canadians in choosing pizza: report

May 22, 2015, Toronto – Thirty-four per cent of Canadians rank price ahead of brand as a deciding factor in opting for pizza, with topping choices, crust thickness and size other top considerations. These are among findings of a new report from research firm Mintel.

According to the report, three quarters (74 per cent) of Canadian adults ate frozen pizza in the six months preceding 2015 and 81 per cent ate restaurant or take-out pizza during the same time period. Despite its popularity, volume and dollar sales of pizza have declined notably over the past five years.

“Aggressive pricing strategies, increased health concerns, competition from foodservice, where Canadian Millennials perceive pizza to be of better quality, as well as disinterest from the aging population have all led to declining sales,” said Joel Gregoire, Senior Food and Drink Analyst at Mintel, in a news release. “Mintel forecasts predict a return to positive volume growth. However, competitive pricing pressures will force a continued drop in dollar sales.”

There are many variables Canada’s pizza consumers take into account when making a purchase decision. However, 34 per cent rank price ahead of brand as a deciding factor. When considering what type of pizza to purchase, nearly as many consumers (31 per cent) say they are consistent in their pizza purchase. When deciding between frozen or refrigerated pizza offerings, preferred toppings ranks among the top five reasons for selecting a pizza with 84 per cent of consumers listing this attribute. When asked what their top consideration is, preferred toppings wins out yet again with 35 per cent. Rounding out the second and third choice attributes cited as most important are crust thickness (72 per cent) and size (72 per cent).

Canadians acknowledge that their overall health depends on eating well, but purchasing factors that relate to health such as caloric content (32 per cent), being all-natural/organic (27 per cent) and having whole grain crust (25 per cent) ranked substantially lower in customers’ purchasing consideration set. However, three in 10 Canadian consumers (31 per cent) agree that store-bought pizza is a relatively healthy option. While over half of Canadian adults (54 per cent) are identified as overweight or obese, only 32 per cent of frozen or refrigerated pizza eaters cite lower-fat or -calorie pizzas as being among their top five considerations when choosing one option over another.

“Canadians demand more selection from frozen and refrigerated pizzas, and they’re also interested in more healthful options. At the same time, the basics of toppings and crust remain most important to consumers when choosing one pizza over another,” Gregoire said. “As such, manufacturers must strike an artful balance in delivering on innovation and health without diluting the product Canadians have grown to love and expect from their favorite pizza brands.”

As age increases, frozen pizza purchases decline. Only 56 per cent of Canadians aged 65+ report eating frozen pizza, well below the average of 74 per cent. Furthermore, this demographic is expecting growth of 19 per cent by 2019, which places further financial risk on the faltering frozen pizza market. According to Mintel data, Canadian consumers over 65 may be disinterested in pizzas because of their different pizza-eating habits. This group features an increased likelihood of adding their own toppings before heating up their pizza (44 per cent) and a desire for fewer but better quality toppings (43 per cent).

“The 26 per cent of Canadians who do not eat frozen pizza skew older and are less likely to have children at home. Pizza consumption starts to fall amongst those age 45-54 and continues to decline thereafter,” Gregoire continued. “When children are not present in the home, the share of consumers who do not eat frozen pizza nearly doubles to 31 per cent.”

While younger consumers drive volume sales of frozen pizza, they contribute to the pricing pressures that are decreasing revenue. For consumers aged 18-24, price is even more likely to be a factor when purchasing frozen pizza (45 per cent vs 34 per cent overall). To accommodate this key purchasing group, retailers are forced to reduce the cost of their products so they will stand up to competitive market prices, leading to decreased dollar sales. Canadian consumers under 25 show more interest in buying single-serve (31 per cent) and microwavable options (30 per cent) at retail locations. Additionally, they are more likely to agree that individual frozen or refrigerated pizza is a good option for lunch and/or school, but primarily prefer takeout and delivery with 40 per cent eating it two times or more per month.

Gregoire concluded, “Younger consumers, particularly Millennials, are the driving force behind the pizza category while simultaneously acting as the source of current market pricing pressures. Millennials show the highest penetration of pizza consumption and are the most fervent foodservice customers with 40 per cent eating takeout at least twice a month. However, the fact that under a third of consumers aged 18-24 are eating frozen pizza (32 per cent) is indicative of the current sales trend in the store-bought pizza market.”