Pizza is losing its "slice" on the American plate. Once the second most common type of restaurant in the United States , pizzerias are being overtaken by coffee shops and Mexican food restaurants in terms of number of establishments.
And while sales are on the rise, they are losing ground to other types of food, leading restaurant industry executives to question the future of this category.
“The pizza market is undergoing a transformation,” Ravi Thanawala, CFO and president of Papa John's International in North America, told The Wall Street Journal (WSJ) . “That’s what the consumer is telling us.”
Americans still consume a lot of pizza. Data from the consulting firm Technomic, cited by the WSJ, shows that pizza restaurant chains recorded consolidated revenue of US$31 billion in 2024. According to the Department of Agriculture, one in ten Americans eats a slice of pizza every day.
However, considering other categories, pizza fell to sixth place in the sales ranking in 2024, according to Technomic. This is a sharp drop compared to the 1990s, when it held the second position.
The pizza "crisis" in the United States can also be measured by the number of bankruptcy filings by chains in the sector. In December, the parent company of the Pieology Pizzeria chain, which once had basketball playerKevin Durant as an investor, filed for Chapter 11 bankruptcy protection.
Other companies, such as the owners of the Anthony's Coal Fired Pizza & Wings and Bertucci's Brick Oven Pizza & Pasta chains, followed the same path. One explanation for the decline of pizza is the arrival of food delivery apps .
Until then, consumption was high because it was an easy food to deliver. Custom-made cardboard boxes and fleets of delivery drivers helped make pizza a staple for those seeking quick and stress-free meals.
Apps have changed this scenario, allowing Americans to access other types of cuisine more conveniently as well.
They also broadened access to cheaper food, leading pizza chains into a price war. A $20 pizza can seem expensive compared to fast food offerings for $5, as well as frozen foods (including pizza).
The situation has even led major chains to rethink their businesses. Yum Brands announced last year that it would explore "strategic options" for Pizza Hut .
In the third-quarter earnings call, Papa John's CEO Todd Penegor said the company is focused on executing its strategy to generate value, but is considering alternatives should they arise.
Apollo Global Management made a $2.1 billion offer for the company late last year, but backed down, according to Reuters .
With consumers changing their habits, companies are forced to adapt their offerings and operations. Papa John's started offering more side dishes and standardizing processes – according to Thanawala, restaurants used to bake pizzas at different temperatures, resulting in uneven products.
The company is reducing the number of restaurants, concentrating operations in locations with growth potential. Other units only need renovation, Thanawala said. "It's a brand that needs work," he stated.
