The pizza wars may be just beginning.
Executives at Sbarro, the chain ubiquitous at shopping malls and airports, hope to elevate their restaurants in consumers’ minds with a better quality of pizza.
Aided by some technological changes, the company will return to making tomato sauce fresh and shredding cheese in each restaurant, instead of using prepackaged ingredients. The reformulated pizza is intended to help transform Sbarro into a “fast casual" restaurant chain like Panera Bread and Qdoba, said James Greco, who became chief executive at the beginning of the year.
Such restaurants offer customers better food quality and specialization without full table service, thus falling somewhere between fast food, or what the industry calls quick service, and casual dining restaurants. Customers often can select the ingredients for, say, a basic item like a pizza or a sandwich, which is made in a few minutes and handed over a counter for a meal costing $8 to $15.
Several pizza chains that have emphasized quick service are making the transition to the fast-casual category, said Darren Tristano, executive vice president of Technomic, an industry consulting firm. Pizza Inn, which has 300 restaurants, recently started Pie Five Pizza, a fast-casual chain that bakes 9-inch pizzas “designed" by customers in five minutes. Naked Pizza of New Orleans and 800 Degree Pizza out of Los Angeles are other examples.
“Sbarro fits into the quick service category because of its price point and service format, where nothing is made to order," Tristano said. “In malls and food courts, they’ve struggled during the recession, and in their stores in urban and suburban locations, they’re really up against much larger chains in the delivery space."
A 56-year-old pizza chain founded in Brooklyn, Sbarro staggered into bankruptcy in April 2011 with more than $400 million of debt.
Its sales, like those of many other restaurants, had slid during the recession as customers ate out less and prices rose for commodities like flour. It exited bankruptcy eight months later, after shedding 28 stores and securing a $35 million line of credit.
Now Apollo Global Management and more than two dozen other investors are banking on Greco to achieve the same kind of turnaround at Sbarro that he did in his last post, at Bruegger’s, the bagel chain. A private company, Sbarro said it had $650 million in worldwide sales in 2011, $420 million of which was in the United States.
“We have to change people’s perception of us," Greco said over one of the company’s new cheese pizzas at its store north of Times Square. “We feel there’s no better way to do that than to get this pizza into as many mouths as possible as fast as we can."
Thus, two vintage trucks are beginning a national tour, starting in New York and Los Angeles and working their way around the country, handing out free slices.
Since June, Sbarro has been testing a fast-casual format at 10 locations across the country. The updated restaurants offer pastas made to order in front of customers in 45 seconds in saute pans on induction stovetops or in fast boilers sunk into countertops.
But the test has shown that pizza still drives Sbarro’s sales. Pizza accounted for almost half of sales in the test sites, according to Nation’s Restaurant News, while pasta generated just 6 percent.
For advice, Greco turned to a local pizza restaurant in New Haven, Conn., where he lives — though he would not divulge the name of the shop or its owner. The goal was to come up with a basic, Neapolitan-style pizza that could stand up to the local pizza wherever there is a Sbarro store. “Why can’t we do that?" Greco asked.
Along with changing ingredients, the chain is adding open-flame ovens to increase the “theater" of the experience as well as cut the time it takes to cook a pizza and reheat a slice.
To ensure consistency, the company long ago began making its tomato sauce and shredding its cheese in central locations and shipping it to restaurants.
Every pizza was the same — but every pizza did not taste as good as it could, said Anthony Missano, president of business development at Sbarro.
The company is now shipping whole peeled San Marzano tomatoes, which are put through a food mill as needed and made into a sauce with minimal ingredients at the restaurants.
Cheese is shipped in blocks and shredded on-site as well. “People are much smarter about what they’re eating," Missano said. “They have higher expectations of what they’re going to get when they go to a restaurant, and we’re going to give it to them with this new pizza."