Dairy farmer hosts Carrie Mess of Wisconsin and Jenni Tilton-Flood of Maine are joined by Jon Moss from Pizza Ranch and Paul Ziemnisky of Dairy Management, Inc. to talk about how creative pizza partnerships are driving the category forward.
Dairy Farmer Hosts:
- Carrie Mess – Wisconsin Dairy Farmer
- Jenni Tilton-Flood – Maine Dairy Farmer
- Jon Moss – Pizza Ranch, Senior Vice President & Chief Brand Officer
- Paul Ziemnisky – DMI, Executive Vice-President Global Innovation Partnerships
Paul Ziemnisky 0:00
Pizza Hut Domino’s Taco Bell McDonald’s we’ve grown over 2 billion milk equivalent pounds and that’s sustained growth. I mean if you look at last year when COVID hit, the pizza category grew, you look at the a lot of compare the pure categories decline. So again, we want to make sure we’re moving a category forward.
Carrie Mess 0:26
Hello, everyone and welcome to another episode of your dairy checkoff podcast. I’m Carrie mess, and I am joined by Jenny Tilton flood from Maine. We’re gonna be the hosts for today’s discussion where we’re excited to talk about dairy checkoff ‘s role when it comes to product innovation related to the one of our favorite foods, maybe my absolute favorite food, pizza, and how that ends up increasing dairy sales.
Jenni Tilton-Flood 0:51
So hey, Carrie, I’m really glad to be here. This is Jenny Tilton flood, a dairy farmer from Maine. And I love the fact that I get to chat with you a dairy farmer from Wisconsin with Paul Ziemnisky from DMI and Jon Moss from Pizza Ranch.
Carrie Mess 1:05
Well, I kind of hear more about Pizza Ranch. Now, Jenny, I understand that’s not a brand that’s out by you. But it’s a huge brand here in the Midwest and in Wisconsin. So I’m excited to learn more a little bit about the background of Pizza Ranch. And I know that they did some really innovative things during COVID. So I’m excited to learn a little bit more about that in their landscape of how they’ve dealt with the last year and a half.
Jenni Tilton-Flood 1:31
So john, I’ll ask you, I noticed that you guys have 207 franchises. Coincidentally, the area code in Maine is 207. So why don’t you explain exactly where Pizza Ranch is for someone like me who’s on the corner of the United States?
Jon Moss 1:46
All right, well, thanks. Glad to be here. And we have actually today 211 Pizza ranges we just had to open up in the last two weeks. So and we’ve had a couple that were close due to covid. reopen. So really, I would call it the greater Midwest. We’re in 14 states. Our core states, Iowa, Minnesota, South Dakota, North Dakota, Wisconsin, and then branches out from there. We’re going to be opening our in our 15th state later this year in Tennessee, and so down near Nashville in Hendersonville. And so that’s a little bit where the landscape is, and we just kind of keep growing out concentrically obviously, our first name is pizza. So that is our specialty. That’s what we’ve been known for. From day one. This is our 40th anniversary coming up in December. So we’re really excited to be celebrating that later this year. We are also very well known for our bone in chicken and our buffet. Those are kind of the things that are kind of the hallmarks of Pizza Ranch. And so most of our p3 locations, offer buffet lunch and dinner at night. And so you can have as much great pizza as you want there.
Jenni Tilton-Flood 2:59
So for a farmer like me, in Maine, who’s maybe not familiar with your model, I hear the word buffet and I think back to the last year. And I want to know, how have you adjusted? And is that where the Pizza Ranch breakfast pizza comes in? And our partnership comes in with COVID? Or was it something that was there before?
Jon Moss 3:20
Well, this start a little bit before but yes, being in the buffet segment has been very challenging, you know, really dealing with the same challenges the entire restaurant industry face if you were a dining player, at least, and having our dining rooms shut down was really, really tough on us. But we just focused on the things we always focus on cleanliness, and and, you know, just providing safe food for our guests every day. And really that was our blueprint for coming out of this. We believed in buffet that I was going to come back out of this and it has it’s growing. It’s not definitely not all the way back. That’s a big part of our focus for this year. But we started focusing heavier on carry out and delivery in third party delivery and online ordering. I mean those were big areas of focus for us in 2020. And even into this year, the first half of this year out the door has been our really our total focus of our business. But that is where the breakfast pizzas did start to come in for us as we were really looking for sales growth any place we could get it and it’s an idea that we kind of floated out there for a while and we decided to try to kind of put it in motion last year with with COVID
Carrie Mess 4:30
how many what is a breakfast pizza? Exactly. I mean, I’m familiar with it a little bit but I want to know more.
Jon Moss 4:36
Yeah, you know, I one of the things for the research we actually got from it was dairy is it is definitely something that is stronger in the Midwest, and specifically probably number one in Iowa due to a competitor of ours having it in their convenience stores. And it’s probably made it pretty well known. But for us, you know breakfast pizza, sausage gravy. You know, scrambled eggs, and then different toppings and of course, you know, cheese as part of it. So sausage, bacon, onions, green peppers, you know, mix of all those things. So, just to end your day with pizza, you start your morning with pizza, that’s a great way to go.
Jenni Tilton-Flood 5:20
Um, you mentioned cheese. So I’m gonna jump on that how big of a part of your breakfast pizza and have Pizza Ranch and all his cheese. And when you’re done, Paul talked to me a little bit about the partnership and how it evolved. And, and what it means to me?
Jon Moss 5:37
Well, cheese is one of our top two purchases that Pizza Ranch makes as a company. So it’s a huge part of what we do. And so our supply chains, and working with the dairy industry, and being part of this with dairy farmers is really exciting to us. Because, you know, p3, we’re based in northwest Iowa, that’s where we started. That’s where our headquarters are. So we are in dairy country, and surrounded by farmers, they are our customers. So being able to work with them, and alongside them and partner with them is frankly, just really good business for us as well.
Paul Ziemnisky 6:13
And I think, you know, from a national perspective, we did the same thing. We You know, we’ve looked at what was occurring with COVID we knew we were seen on a national scale, you know, when you think about fine dining was shut down. You know, the fast casual environment was shutting down, you know, with exception of delivery. When you look at you know, even the quick serve restaurants were like McDonald’s or Taco Bell that do 30 to 35% of their sales and dine in. We looked to the pizza industry and said, you know, how do we pivot to and act I’ll call it engage with the consumer and ways that that can get them product easy and safely. And so Midwest dairy work with john and team and then we worked with our existing partners of Domino’s Pizza Hut and we actually even engaged Papa John’s as a pop up partner to make sure that we have that volume flowing. Because you know, you think about 25% of cheese and food service Rena goes out on pizza. If pizza slowed down it was going to really slow down the whole dairy industry. So we we looked at the industry in total and said what do we want to do to make sure we’ve got milk and cheese moving through with makoa was hitting so other parts of the industry with chaos for you know, especially in that first three to four months of COVID.
Carrie Mess 7:34
I’ll say that stat you just threw out there again 25% of cheese
Paul Ziemnisky 7:41
in the foodservice industry goes out on pts. So we talked about how important it is. And that’s really when you think about carry when we started the partnerships, and BMI changed the business model from you know, the in store promotions and the advertising model to working with and through partners. The first two partners, we’re in a space of McDonald’s and dominoes and dominoes you think about pizza in 2008 and I joke cuz I was on giorno and we were benefiting I was a craft and we were we were growing rapidly because the quick serve restaurants were taking cheese off, they were cutting back marketing and craft we’re investing in pizza, you know that we just launched digiorno we were watching just want to stuff cross we, you know, been crossed in the microwave space. And, you know, damn eyes first partnership with Domino’s was reinvesting back in the quality of the pizza and the marketing behind the pizza. And so the first three to five years and Domino’s you know, from 2009 to 2012, you know, was working with them to revitalize the pizza pizza environment, because so much cheese moves through that. I had no idea it was that much.
Jenni Tilton-Flood 8:53
I mean, I think we all know cheese is love language. But obviously pizza is just another way to speak it right? So. So on our farms, we have ways of measuring and judging how things are going, you know, whether it’s our B, F and P sec crop yields, we’re analyzing, you know, our feet and our bunks and everything. How are you? How are you measuring whether these partnerships are working? How are you making sure that it’s still a good investment? How are you? How are you able to tell that you’re doing the job of moving this cheese and doing it in a good way?
Paul Ziemnisky 9:28
First and foremost, we track vine growth for partners and we looked at buying growth through that that whole sector they plan. You know, like I said, if you think about when when we started working with Domino’s, the quicks or pizza sales were declining, the category was becoming unhealthy. You know, your pizza hut was starting, you know, struggling Domino’s was struggling. So we went in and we wanted to reestablish momentum. So the first five years of dominoes was creating momentum. You know, the next five years was building you know, piloting the future for the industry, and also working with Pizza Hut to do the same. And so, you know, when I say piloting the future, we transform investments from just product quality. And then Domino’s reinvested in in advertising, you know, and to remarket the product. But I would say more you know, I’ll call it the last five years is about the technology space and experience of the future. So, you know, john talked about carry out how pizza you know, what’s critical for pizza as a growth space is you know, carry out competes much more with non dairy categories, whether it’s, you know, call Asian food, other ethnic food, chicken, you know, carry out chicken. So we a lot of our work was how do we win it and make sure pizza is set up to win and carry out the old dominoes you think about 15 years ago used to be in the back of a gas station, or at the end of some strip mall kind of hidden. If you go to Domino’s today, it’s much more experiential and advantageous for carry out. So that was some of the space we’ve proved to them. More recently, it’s been, you know, working with them, you know, they support the farmer to farmer storytelling, but then they also invested in modern technology, whether it’s delivery apps, you know, partnering with Amazon, to, you know, use the Amazon voice now to order your pizza. There’s a lot of technology relevance, you know, right now, you probably see advertising where they talk about non-contact delivery, you know, that’s taking place with Domino’s. And so we’re always piloting new technology that makes it easy for pizza. And we talk about what’s important as we select partners, is the catalytic effect, is it you know, we don’t select partners who still share from each other, just the farmer doesn’t win. And we get a lot of calls, people say, why don’t you partner with this guy and this guy, cuz they just want to steal share from each other? We have we make sure we’re partners that are going to drive long term incremental, and sustainable sales for you guys. And so we met what we measure back to your question, Jenny is, you know, since the start of our major four partners, including pizza, you know, Pizza Hut, Domino’s, Taco Bell, and McDonald’s, we’ve grown over 2 billion milk equivalent pounds, and that’s sustained growth. And then we look at the, you know, our investment and ROI against that. But we also measure the catalytic effect of that, what do they do for the categories? I mean, if you look at last year, when COVID hit, the pizza category grew, the quick serve pizza category grew with COVID, you know, and you know, so you look at that a lot of compare the pure categories decline. And so again, we want to make sure we’re moving a category forward. And then long term, we also look at the long term impacts the investment, and we actually stopped our pizza hut partnership we got, we start playing with pizza to stabilize now, you know, they were dancing, their sales were down seven 8%, we started working with them. Over the last couple of years, pizza had got to flat, but we also help build their pipeline for the future. So this year, we don’t even have a formal partnership, you see the news of the Detroit pizza that’s been highly, highly successful for them. And then you look at the finally the catalytic effect. Look at Madh and Blaze, and I’m sure john john is looking at this upstart and fast casual players. So you’ve got a lot of investment taking place in the pizza space. It’s enabled us to even start to say, okay, where do we find new growth areas for the future? Right, so we’re actually pivoting into some new spaces, I can talk about like a chicken. You know, my favorite fact, I tell the farmers are looking at quick serve chicken. If you guys haven’t seen that thing, chicken wars, 3 billion chicken sandwiches a year, less than 700 1000s of those sandwiches are going out with cheese. My goal is to get those 3 billion chicken sandwiches with five ounces of cheese and you can do the math. That’s a couple billion pounds of milk right there that we have an opportunity to go get in a category that’s growing 10%. So our job is we’re always framing up where do we get future growth? It’s incremental for the farmer and investing in those spaces.
Jenni Tilton-Flood 14:05
And that’s really an important note, you know, especially about those cheeseless chickens was poor cheeseless chickens out there. You know, whatever these restaurants are finding that their consumers want. My question is always Well, can we put some cheese on that it doesn’t matter what it is, doesn’t matter what type of protein it is. I think that’s best. And and thank you for talking about how we judge and how we figure out how these partnerships are working for us. JOHN, how does the partnership work for you? I mean, did did the partnership help meet challenges? Oh, especially over COVID? Has it increased your ability to find out what your consumer wants or is it helps you deliver what your consumer wants?
Jon Moss 14:41
I can tell you working with Midwest dairy, we’ve talked a lot about incremental growth. So it kind of gets to that last question is really how does this become a win win for for you, dairy farmers and for us at Pizza Ranch. And I think that is really what has made this relationship exciting for us to be a part of is really focusing on things that are Win Win incremental growth. That’s where our breakfast pizza really came in. It’s a segment that we were not in at all. And to really be into that frozen segment, and so every single one of these breakfast pizzas that we’re selling is an item of sale for us and cheese for you that we would not have been selling Prior to the introduction and the launch of them.
Carrie Mess 15:27
JOHN, I guess, what I’d like to know is, you know, obviously, we provided insights to you, is this something Do you think your breakfast pizza would have happened? If dairy farmers hadn’t have been able to provide you the insights into that market,
Jon Moss 15:44
the combination of the data insights, and you know, funding partnership really, I would say allowed us to take a much bigger calculated risk that maybe I would have been wanting to take, had we not had that partnership to say, hey, let’s not wait till next year, and prove this out. Let’s get after this, right at the big holiday season, when families are all becoming together. And what would be better to have in the morning for Christmas than a breakfast pizza we had so many of our guests end up telling us that’s what they were going to do for the they were going to do and did for their Christmas breakfast. On a day one 100% of our restaurants are shut, we’re still serving pizza, pizza, when 100% of our restaurants are closed for the day for Christmas. So that’s really, that was really exciting for us to be able to launch that, and I don’t think it would not have happened that’s the answer would not have happened in December of last year chain wide without support from Midwest dairy.
Jenni Tilton-Flood 16:48
So how, you know, here I am dairy farmer in Maine, my milk goes right into a gallon jug, like a lot of dairy farmers throughout the United States. And you say that 25% of the cheese ends up on a pizza. That’s 25% of cheese from all over the country, though, isn’t it? I mean, this. I mean, we we think of Wisconsin, for up cheese, and well, some of us think of Vermont, but you know, we’ll get into that another time, Carrie. But, you know, we’re talking about a nation’s worth of cheese going on to these pizzas. It’s not from any one area, right?
Paul Ziemnisky 17:23
No, I think the industry on a pizza side, they’ve got diversify suppliers, East Coast, West Coast, and they’re pulling milk from I know, there’s farmers from Vermont that’s flowing into plants and in New York area, and there’s in the northwest and southeast, Southwest. And so and then the thing, like I said, this sustained growth, we also talked about, you know, since the start, you know, it’s a couple billion pounds, you think about that couple billion pounds would be out there just trying to find other pounds of milk sold a pound of milk sold,
Carrie Mess 17:55
I wanted to ask when do we decide to sunset a partnership or walk away from it? Is there a metric that we’re using there?
Paul Ziemnisky 18:05
You know, we have a specific partner criteria. You know, when I think about the criteria, we launch a new partner or measuring existing partner is, you know, first and foremost ability for long term sustained sales growth. And also, you know, specific pizza, you know, it was the health of the category, where the position of the category was and we looked down for Pizza Hut, we still have a partnership with Pizza Hut, but we felt the bigger growth opportunity with pizza was internationally you know, we you know, they’re owned by yum brands, yum, brands, when you add their their reach up, you know, they’ve had about 20,000 Pizza has on a global footprint. And so when you look at Pizza, and this is a great example, on the on the export side for us pizza penetration in Southeast Asia. Now the average family in the US has about, you know, 4050 pizzas a year, you think about Southeast Asia they have at once a year and the Middle East about once a year. So there’s a few we spell that we’re looking at a Pizza Hut on that criteria was, we felt we get more sales internationally and more opportunity for export growth for us there versus domestically where we would have already built carried or pipeline of growth for the next three years. Now other criteria we do look at it, though, is like we are they catalytic? Will others follow their actions? You know, will? Do we have shared strategic values? You know, will they support us in other ways, you know, like areas, whether it’s the community areas that we start to pivot and do the environmental storytelling, all the great things that the farmer does for the environment, are they willing to co invest in that space and, and their supply chain in that area? So a lot of things go into that checklist of criteria and we revisited every year with our we have a accelerate sales committee that looks at these partners and we come in there and we lay out a situation here’s where we are Here’s other growth opportunities that, you know, we, you know, and then you know, the farmers make the decision, we lay the facts out and say, here are these future spaces we think we should start to invest in. And so it’s a yearly thing that we go through on the assessment side on the partnerships.
Jenni Tilton-Flood 20:16
So when it comes to partnerships, we are looking at, you’re looking at a partner that is going to be able to provide that movement, you know, that that buy in, and then that catalytic inspiration. And it’s not necessarily that you’re looking for and I’m, I’m asking, even though it sounds like I’m saying, I’m asking, or you’re not necessarily looking for a certain size partner, but you’re looking for a partner who’s going to be able to move this mountain and that mountain, or at least divert this stream. So when we have people like when I look around, and I see a really amazing, you know, family owned pizza shop, family of shops, you know, in my local state, it’s not necessarily that we don’t want to support them and their purchases, but maybe that’s a space, is that a space for maybe that co ops and processors could fill? And not necessarily a national dairy farmer investment or, or do you look at those smaller groups as well?
Paul Ziemnisky 21:11
Yeah, we look at people review that others watch and follow. You know, I tried to give people examples. You know, not only is McDonald’s newsworthy in the burger, hamburger space, but you know, In and Out Burger, you know, they’re not the biggest, you know, they have 300 restaurants versus, you know, McDonald’s 7000. But in and out, you know, nationally, in and out does something newsworthy, everybody watches them or Shake Shack, right? So it’s more of the folks that people watch, you know, 10 years ago, chick fil a was a little regional chain. Now, chick fil a is the third biggest. They’ve surpassed a Burger King, they surpassed timing Taco Bell, you talk about momentum. They’re the number three player and restaurant in the US. And so we look at who can really impact. And then also who’s willing to invest Jenny is it’s not just we expect our partners to invest, you know, on the food service I 20. To one me if you look at the for food service partners, if 80 million consumers going through their week, and on the reach 80 million households, there’s only 100 100 20 million households in the US. So you think about at the 120 Disney knows for partners that we had. And then their advertising spending across those four against dairy $1.5 billion. You think about the McDonald’s and the cheeseburger, the pizza ads, I mean, the pizza guys alone, well over half a billion dollars promoting dairy. So you know, as we look at partners, it can be a smaller player. But are they willing to invest that multiple to promote incrementally the category in different ways and unique ways that can drive that sustained growth?
Carrie Mess 22:57
I think this conversation has definitely made me decide that we’re having pizza for dinner. I don’t know about you, Jenny. Well, I
Jenni Tilton-Flood 23:04
may pick up some I do have one last question, though. And this is probably for both of you. But john, I’ll go with you first. Have you seen that there’s a need to have pizza with cheese that more people can eat those who struggle with lactose intolerance, that sort of thing? Is there? Is there a look for that? Is there a need for that? Is that an expansion that needs to be looked into and developed? Or is it happening?
Jon Moss 23:31
It’s currently not happening? There are more and more interesting dietary trends like that and needs of our of our guests that continue to bubble up. really wasn’t that long ago for us sad dairy, but like having a gluten free crust. It was like, let’s seem so far out of the box. We had some franchisees that really said, Hey, we need to look at this, we’re hearing from guests. And we were pretty early on to the marketplace with a gluten free pizza. And it continues to do really, really well for us, for us. So it’s really one of those things that we just really try to listen to our our guests, what do they need? What do they want? And if that’s something that they’re looking for, than we’re we’re happy to try to provide it to them and say yes to the guest.
Jenni Tilton-Flood 24:19
Paul, is that something that’s being worked on? I mean, as as a dairy farmer who had two kids who had struggled with dairy when they were growing up,
Paul Ziemnisky 24:27
helps. I know there’s r&d work there. And I think from a bigger perspective, we also look at what what what are the real trends of today and you know, you’ve got this emerging consumer that you know, whether you call it flexitarian or vegetarian, you know, we want to make sure the dairy based and real cheese based pizza is front and center to meet their that need and reason is the veto boat. If we don’t offer a vegetarian pizza, it’s going to drive them to some other meal. That’s a competitor like Italy. drive them to like an Indian restaurant or some other thing like that. And so, and actually what some of the things you learn in those vegetarian pizzas actually have more cheese than than the meat pizzas. And so, you know, we get a lot of questions, you know, should we walk away if a partner is exploring a beyond or a impossible meet repairs, a replacement for like a traditional hamburger or whatever. And we said, there’s room for both because it’s very small, you know, the meat, the media loves to overplay that the presence of that and that’s a whole separate story, we can have that written when it comes to the partners and the facts. And the dairies front center, we want to make sure we’re being progressive and meeting the consumer needs, but so they don’t walk away from these categories. You know, a great example is I know, it’s not pizza, but Taco Bell, their vegetarian menu, they got 50 items, heavily, heavily dairy driven. And actually, you know, when you think about cheese and sour cream, they use that to deliver a lot of the taste, flavor, and protein on the nutritional front versus beans and things like that. And they did it because we had the presence we brought our nutrition team and to help and we’re doing we do the same thing with the pizza chains or, or others as they look at that, we want to make sure as they’re playing in that space that we’re offering, improving the value of dairy in that to that consumer so we don’t lose five people who want the meat what pizza etc.
Jenni Tilton-Flood 26:33
And you brought up the technology and like one of the that involved with Domino’s and I know that online ordering and ordering ahead is big for for Pizza Ranch, but like, you know, Taco Bell that Ehrlich does a really great job makes it easy to just switch over to whatever needs you need based on your diet and eat. So I appreciate I appreciate that
Paul Ziemnisky 26:52
ease all the time. If you put consumers first you know as john was talking about, the dairy can win, you know and really listen to the consumers you know, I tell my team a complaints an opportunity so how do we turn that around and make make growth and for the farmers and so you know, for us if we delight the consumer and stay ahead of that, you know, it’s a pizza’s done that now for 40 years, you know, this really strong momentum across retail across food service. And I think that’s the big opportunity for us to just how do we continue to keep that category relevant to because it moves so much volume make it easy for the consumer to experience make it great for the family?
Carrie Mess 27:35
I think this has been so interesting to hear about how DNI and dairy farmers are working to not just increase you know the bottom lines for businesses but increase how much cheese is being used how much dairy is being used in beyond just the extra cheese button?
Jenni Tilton-Flood 27:57
Yeah, so really thank you john and Paul for this discussion today. It’s it’s been really interesting as Carrie said to hear all these pizza partnerships between dairy farmers with BMI and and folks like Pizza Ranch and other partners are impacting our dairy sales and especially for a dairy farmer like me who don’t necessarily think of cheese when she thinks about where milk goes. But and and also for for Carrie who who thinks about cheese every day when her milk as I’m sure yes. So I mean, it’s it’s important to understand how this affects us in our own farm yards. In closing, this is Jenny token flood and carry mass who is a dairy farmers for your dairy checkoff podcast for our listeners. Thanks for joining us today. You want to hear more about various issues affecting the dairy industry. Subscribe to this podcast on your favorite podcast platforms including Stitcher, Spotify and iTunes or you can check out our website dairy checkoff. podcast.com for future episodes. Until next time, be well be kind and have a great day.