As the European pizza market is forecast to return to growth after declining over 2010-2015, there is an opportunity for manufacturers to grow their share of this recovering market.
By Veronika Zhupanova, consumer analyst for GlobalData
Tapping into the most important consumption motivators, such as the desire for treating and convenience, will help brands to catch consumers’ eyes in the mature European market.
Europe’s pizza market, which declined over 2010-2015 with a negative Compound Annual Growth Rate (CAGR) of -0.9%, is forecast to see strong growth during the 2015-2020 period, with a CAGR of 1.6%. The European pizza market is largely driven by consumer desire for treats, as well as real or perceived feelings of time-scarcity. As consumers try to fit more activities into the same amount of time, their desire for tasty food that does not require long preparation times is driving them towards indulgent ready-to-cook meal options, a category into which pizza is a good fit.
The convenience factor
As consumers’ lives become busier with the demands of modern life, the desire for time-saving meal options will continue to grow in importance. Pizza manufacturers should capitalize on this further by launching pizza-style snacks in microwaveable packaging that are quick and easy to prepare.
It is interesting to note that in the major European economies of France, Spain, and the UK chilled pizza is the favorite by market share, whilst in Italy and Germany it is frozen pizza, which has a greater share. This points to opportunities for both frozen and chilled pizza producers and distributors, though they must be aware of differences in country preferences when formulating new product development (NPD).
Looking deeper into the top three motivators on the European market, we find that:
1. Pizza as a treat
Even in times of economic uncertainty, while cutting down on high-priced items, such as expensive clothes or holidays, consumers are unwilling to compromise on their daily treats. This is evident for pizza, as the desire for treats is the primary driver of Europe’s pizza market, motivating a third (32.6%) of consumption volume in 2015. This highlights the importance of underlining the indulgent credentials of pizzas – such as fresh dough and rich toppings – as this is where consumers are the most likely to trade-up.
However, this differs by gender, as in 2015 European women were motivated by the need for treating far more than men, at 38.5%, and 27.2%, respectively. When looking at this by age group, the need for treating is the strongest among 10-15 year-olds, influencing almost a half of their consumption volume (at 45.3%). This reflects parents turning to the category to treat their children, rather than considering it solely as a meal or snack only. Looking at major European economies, treating is the primary driver in France, Germany, Spain, and the UK. However, in Italy, the influence of treating has driven only 3.1% of consumption volumes in 2015, an outlier which reflects the staple nature of pizza in this market.
When conveying indulgence and quality, packaging is a vital tool: dark packaging made with high-quality materials and sophisticated designs will convey the premium edge of the product, whilst simple, minimalistic packaging will communicate craftsmanship and artisanal touch to the product. Additionally, plastic windows will allow consumers to evaluate the freshness and texture of the product before they make a purchasing decision. This lucrative consumer group is also more likely to check pizza packaging labels for credentials they link with taste, such as authentic recipes and the finest quality of the ingredients, and will pay extra for these luxurious ingredients.
Another way to maximize consumers’ indulgent taste sensations is to offer cross-promotions via food and beverage pairing, such as spicy pizza with a sweet carbonated drink. This can be done via suggestions on packaging, or in-store promotions, such as offering discounts when pizza is purchased with a matching beverage. Another example of maximizing taste sensations is clearly positioning the pizza as a part of an indulgent dinner. For example, in Turkey, Feast Pizza Menu brand rolled out a ready meal set featuring pizza, chicken nuggets and potato wedges, targeting those seeking to treat themselves in the comfort of their own homes.
2. Busy consumers want convenience
European consumers feel increasingly time-pressed as they try to fit ever more activities into their day. This means that easy to prepare meals will appeal to these consumers as a means to save cooking time. This need for convenience influenced over a fifth of pizza consumption volume in 2015, at 21.9%. While some consumers will look for faster-cooking options such as microwaveable pizzas, others who consider baked pizzas to taste better will look for homemade pizza kits, such as those featuring dough and topping ingredients that allow them to prepare a fresh, tasty meal without the time investment of finding ingredients and making dough from scratch.
Another example of convenience is from Gryachaya Shuchka, a Russian convenience food brand who target time scarce consumers with individual portions of baked pizza slices. This product takes two minutes to prepare in a microwave and uses the packaging claim “just heat up”, attracting busy consumer seeking easy to cook snacking options. Additionally, the product helps to avoid food waste, as consumers take the amount of slices needed, leaving the rest frozen.
The need for easy preparation is one of the primary consumption motivators across all major European economies, but is especially important in Spain, where it influenced 29.8% of pizza consumption in 2015, highlighting the opportunity for convenience based NPD in this country.
Time-scarcity is a greater influence on women’s pizza consumption than men’s by a significant margin, at 25.4% versus 18.7% respectively, reflecting how women feel more time-pressed as they balance work and personal commitments, as well as house chores and childcare. They also still tend to be the primary grocery buyer and are far more likely to trade-up for microwaveable packaging or portioned products that reduce preparation time yet provide a satisfying meal. This makes them a lucrative audience for pizza makers.
3. Value remains an important motivator for European consumers
In 2015, value for money influenced 18.4% of pizza consumption in Europe, reflecting consumers’ preference for products offering savings, as well as those providing added value. The importance of value means decreased brand loyalty, presenting opportunities for private labels and discount brands to gain share. Across major European economies, the desire for value is the most important in Italy, again highlighting the staple, competitive nature of pizza in this market. While the need for value reflects consumer interest in lower price points, this also an opportunity to gain share and engage consumers through added value.
European women find value for money more important than men, with the need influencing 20.4% of their consumption, as opposed to 16.5% for men. However, as females’ desire for treating and convenience is more important than for value, manufacturers should aim to add value to their products, encouraging them to trade-up with more indulgent offerings, such as featuring high-quality ingredients and rich toppings. Across age groups the desire for value peaks among those aged 25-34, motivating a quarter of their consumption in 2015. This reflects how these consumers, who are early on in their careers, are on the lookout for more competitive price points. Meanwhile, those aged 35-44 are the least influenced by value and are more likely to pay a premium for higher quality products, facilitated by increased levels of disposable income.
To offer consumers better value, pizza manufacturers should explore cross-category promotions, such as through pizza pairing with beverages and other foods, such as sauce dips, or fries. This way, manufacturers will not only help consumers to save costs, but will also tap into the primary trend – the need for maximizing taste sensations.