By Ed Zimmerman
Around 1968, when I was 10 years old, I have a vivid memory of grocery shopping at the A&P with my mom. In that first wide aisle, displayed was milk, cheese and other refrigerated foods. In the middle of the aisle, not in the refrigerator, was a large pile of Velveeta, stacked up from the floor. I asked my mom, “How come this cheese doesn’t need to be in the refrigerator?” My mom, a typical ’60s housewife, answered, “I guess it’s cold enough in this aisle to keep it from spoiling.”
Fast forward 15 years and now I’m a deli manager in a grocery store. The store was in a poor neighborhood where food stamps drove purchases and people shopped almost every day. A regular customer came to the deli counter and ordered a half pound of ham and a half pound of cheese. I politely asked, “What kind of cheese?”; she answered, “yellow.”
This is the dairy world many of us grew up in. An industry that was production-driven, striving to be the low-cost producer in order to increase market share with consumers that saw all cheese as “yellow,” where price was the main determinant of the purchase. It was the mainstreaming of food production and marketing.
The pivotal moment in society came when a chain convenience market that was open from 7 in the morning until 11 at night announced a bold initiative; they would stay open all night. 7-Eleven invented the notion of 24/7 and gave consumers a choice to shop when it was convenient for them, not the store.
Within a few years, the nation’s second largest burger chain, Burger King, advertised a point of difference from its assembly line competitor, McDonald’s. In addition to handing out paper crowns, Burger King said you could “have it your way.” These were cracks in the production-driven foundation of the American food system.
The country’s rapidly growing pizza segment answered the call. In New York, pizzerias had already made their move — consumers could order half cheese, half pepperoni. Then, a clever marketer, Sbarro, offered six or eight choices. Large pizzas behind glass that consumers ordered by the slice. A minute in the oven to re-heat, served on two paper plates to catch the grease from the whole milk Mozzarella, and lots of napkins.
Online ordering pushed choice even further along as technology entered the fray. Some clever chains recognized that large pizza offered the lowest cost per square inch, but limited choice. Companies like M.O.D. (Made on Demand), 800 degrees and Blaze pioneered the fast-casual movement in pizza, offering consumers the ultimate in customized pizza, their way and fast.
The days of mainstream food — whether in packages, time of day or limited meal choice — is over. The consumer is in the driver’s seat and gets what they want, when they want it. Amazon perfected it, and the food industry, at least in the developed world, will never be the same.
Food manufacturers in many categories struggle to respond. Decades old processes that produced safe, clean and affordable food are outdated. As the pandemic continues on, the question is: What’s a cheesemaker to do?
Two of the biggest issues on the minds of pizza operators are to increase sales and find labor. How can cheese producers use the power of their production to solve these problems?
Increasing sales and margin for pizza operators means differentiating their product. Pizza consumers are focused on coupons and deals. Operators offer low prices for commodity products like cheese and pepperoni. Specialty pizzas are not easily substitutable, so they build an audience and provide better margins. Mozzarella cheese is commoditized, not easy to distinguish between brands. Your commodity is their commodity.
Pepper Jack and other flavored cheeses with inclusions have been around a long time. Creating flavored Mozzarella with inclusions has production challenges with cleaning between batches but offers cheesemakers and operators an opportunity to sell a differentiated product with better margins.
The holy grail would be a Mozzarella with pepperoni. Issues with cross contamination and inviting USDA into cheese plants has closed that door. Today, with all the plant-based meats, some clever cheesemaker will adapt and bring this to market.
Food flavor technology has come such a long way. I see an opportunity for a cheese company to offer a three cheese blend in a single cheese, made in a single vat. Create this item, call it Mozz/Prov/Parmesan blend in one, using cultures, flavors and inclusions.
Ideas like these offer pizza operators a differentiated product and the ability to reduce back-of-the-house labor to blend, measure, etc. How, you ask? By understanding the notion of prime cost. Prime cost is the addition of food cost and labor cost together. Shred cheese is the best example. Operators can increase their food cost percentage by buying shredded cheese, because they reduce their labor cost. If prime cost is kept between 52% and 58%, restaurants can make money.
When 7-Eleven kept their stores open all night, there were managers inside and outside the company that swore it would never work; ditto “hold the pickle, hold the lettuce” at Burger King. It’s easy to say no. There are dozens of logical reasons to reject inclusions and flavorings in cheese. The risk is yours.
What we all learned these past 18 months is that anything is possible. So, what’s your plan — pray that the world goes back to normal when this is all over? Or create something new and different that changes the way pizza operators, distributors and consumers buy pizza ingredients?
The choice, 24/7, is yours.