Business and Operations
Pizza on Fire: December 2013
By Tom Stankiewicz
Paying the premium price
By Tom Stankiewicz
It seems like the cost of producing great quality pizzas is always on the rise, and this trend will most likely continue.
It seems like the cost of producing great quality pizzas is always on the rise, and this trend will most likely continue. People understand that good quality food is priced well above average prices, and this likely won’t change either. It costs more to produce quality and the expectation of exceptional is reflected in the price of the pie. Ingredient cost is directly linked to your business’ operating costs and by domino effect it impacts the customers who choose to pay the premium price. The important dilemma here for pizzerias lies in how to maintain a good balance between quality and raising prices.
If I asked you to identify the No. 1 product that has the most impact on the end pizza price, my guess without hesitation is that you will say it is the current high cost of cheese. Cheese is definitely the most expensive topping in comparison to all other pizza toppings on our menus. Arguably, it is the only universal topping that is put on every single pizza that slides into ovens nationwide. On a rare occasion, someone might choose to skip the cheese, but it’s so uncommon that it’s not worth counting. At any pizzeria, the inventory of produce clearly shows that we go through multiple boxes of cheese on any given day. This is one of the main items causing an increase in the cost of making pizza, yet we cannot control how much we must pay for cheese. All we can do is carry out careful planning that will help us ensure none of it gets wasted. For those who are new to the pizza business, the best advice old-timers like me can give is to tell you to buy a measuring scale. Your employees should never guess how much cheese to put on a pizza. This is the most common mistake that makes cheese disappear too fast. The amount of cheese to be put on any pizza should be clearly identified in a chart for all employees to see.
With so much emphasis on cheese, it comes as no surprise that pizzerias tend to research cheese prices and suppliers in great detail before deciding who we will purchase it from. Over the years, I’m sure that many of us have had several different cheese suppliers. Whatever made business sense at that time guided our decisions, whether it was lower price or better quality product. From my conversations with other pizzaiolos, it seems that we are most likely to change our produce supplier for reasons related to cheese than for reasons related to any other food.
Anyone who follows the news has heard about the recent free trade agreement in discussions between Canada and EU that will bring more than 16,000 tonnes of European cheese into Canada free and clear of high tariffs. If inked, this deal will have implications for many businesses. As I am one of those business owners who pay attention to the constantly increasing cheese prices, I’m hoping this will have a positive impact on the pizza industry. As with everything else, time will show how this will affect independent pizza owners. I’m hoping this could result in a decrease or at least maintenance of current cheese prices due to increased competition. This would be a huge benefit and help for all of us who try to maintain high pizza quality without increasing the price and passing the cost to customers. I can’t wait to discover how this change will impact and transform the pizza industry over the next few years.
I think it’s important to note that this also means the Canadian market could see novel variations of cheeses from Europe. If the price is right, this might be an opportunity to introduce new cheese flavours to your customers. Offering a greater cheese selection gives customers a new reason to order pizza from you today. It’s true that most customers ask for mozzarella cheese, but offering other unique cheese varieties could attract a new customer base Pair a new variety with an existing great quality pizza and it could potentially increase your sales.
Although I don’t expect any drastic changes in terms of price, I do think it could impact how often and by how much the Canadian cheese prices are increased or decreased. After all, it sounds like we will have more options to choose from, which helps put us in the driver’s seat. Let’s stay focused on making exceptional quality pizzas, while keeping a close eye on the cheese prices.
Tom Stankiewicz has been in the pizza business for more than 15 years. He has been the proprietor of Bondi’s Pizza in London, Ont., since 2000 and is president of the Canadian Pizza Team.