Quick Bites: Pizza, Pizza

  • Foodservice sales continue to tumble as restaurants shutter across the country. But there is one segment faring better than others, and it features cheese prominently: pizza.
  • A pizza chain was the first restaurant to offer delivery in the 1950s and the segment hasn’t looked back. Delivery and carryout make up about 75% of industry sales. It’s even bigger for some of the majors: 90% of Pizza Hut’s business, while about 55% of Dominos’ orders are delivery and 45% carryout. Between March 11 and 20, the pizza segment’s share of traffic in the food industry was down 8% from 2019—the lowest among restaurant subcategories.
  • The NCAA canceled the Final Four basketball tourney, but people still want pizza. According to a recent survey from Datassential, 63% of people looking to get takeout wanted pizza while 51% wanted burgers and sandwiches. And pizza is always a crowd pleaser – especially for families with kids at home.
  • Though total food service sales will suffer mightily during this period, pizza will continue to outperform. Many of the major pizza chains are reporting strong sales growth.
  • Pizza chains are hiring more employees to keep up with the demand. Pizza Hut is hiring 30,000 permanent positions, Papa John’s plans to add 20,000 new workers, and Domino’s is looking to add 10,000 employees. Individuals like these part of the #essential workforce helping provide U.S. consumers with safe and nutritious dairy products.

Today's Special

  • China is slowly reemerging after almost two months of lockdown. People are heading back to offices, schools are reopening, and restaurant business is picking up. But life has yet to return to pre-quarantine norm. Movie theaters remain closed. International travel is still on lockdown. And with social distancing still encouraged, in-restaurant dining traffic remains light. China’s consumers do not appear all that eager to spend. That's especially true for those that lost income during the lockdown and are now racking up debt. Plus, reports suggest that more than 429,000 businesses have closed down for good – with the wholesale and retail sectors accounting for nearly 40% of those closures. That could weigh on local economies.

  • Estimates suggest that China’s GDP in the first quarter took a rough 10% hit year-over-year. Second quarter GDP could see some modest improvement with the reopening of factories and nearly 80% of small to medium sized businesses back to work. The path to recovery may not be that easy though. With the rest of the world dealing with their own lockdowns, China’s export business may struggle. At the end of March, reports pointed to heavy pressure on container utilization rates and freight rates between China to North America and Europe.

  • Despite ongoing struggles, U.S. exports to China picked up in February. U.S. dairy exporters sold $30.7 million in goods to China during the month, up 6% year-over-year. In addition to the reawakening of China’s consumers post-lockdown, improving trade relations should help keep the flow of product from the U.S. to China moving.

Something Sweet: The Inventory Minute

International Dairy Foods Association

1250 H Street, NW • Suite 900

Washington, DC 20005

202.737.4332

www.idfa.org

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