Canteen launches new pizza line: contract feeder seeks to blunt off-site competition

Nation's Restaurant News, Oct 5, 1987 by Peter J. Romeo

Canteen launches new pizza line

Contract feeder seeks to blunt off-site competition

Canteen Corp. has introduced a signature line of pizzas at its business-and-industry contract-feeding facilities to blunt mounting competition from restaurants.

The nation's second-largest contract feeder will eventually roll out the new Pazzelli's Pizza line to its school-feeding operations as well, said R.L. Ritchie, vice president of food operations.

Besides providing Canteen with an entry into the red-hot pizza market, Pazzelli's has lowered food costs at outlets where it is offered to around 40 percent of sales, Ritchie said. This could yield marketing advantages of holding down both menu prices and the subsidies paid by many of Canteen's business-and-industry accounts to offset the costs, he indicated.

"Our costs [overall] are rising. To keep subsidies down, we have to change our product mix instead of just raising menu prices,' Ritchie commented.

He cited the new Pazzelli's line as an example of the sophisticated defenses Canteen and its contract-feeding competitors are adopting in the face of blistering lunchtime competition from fast feeders and other restaurant chains.

Ponderosa, Friendly, Bennigan's, Perkins, and many other major systems have attempted recently to raise midday traffic by adding express lunch programs. By guaranteeing that full-service meals can be consumed in the space of a lunch hour, such offers can offset the convenience of having Canteen-run cafeterias at consumers' places of employment.

Big thinking needed

"The whole business-and-industry segment has to start thinking differently,' Ritchie said. "We've got to start thinking like the big restaurant chains.'

Canteen, with about 1,700 facilities, is second only to Marriott Corp. in institutional catering. It is a subsidiary of TW Services, which also owns the Denny's coffee shop chain, a Hardee's fast-food franchise, and the Quincy's budget steak house chain.

Canteen's business and industry facilities sell Pazzelli's by the slice and in pies for both on-premises consumption and take-out service. Carryout patrons have a choice of fully cooked or bake-it-yourself pies.

The contract feeder said it spent 18 months in developing the line. The research prompted Canteen to limit its line of toppings to sausage, beef, pepperoni, or fresh vegetables. Pies are available in two sizes--7 inches and 14 inches --and with either thin or thick crusts.

The Pazzelli's name was adopted because "it makes our pizza original. It's ours, not a national brand we buy,' Ritchie said.

The array is Canteen's second signature menu line. Last year the company rolled out a line of fresh-baked biscuits and sandwiches called Bigger Better Biscuits.

"We've learned a lot about signature items,' Ritchie said. "We've sold literally millions of the biscuits.'

The biscuits took "about a year to really catch on,' he commented. Yet Pazzelli's already is "picking up steam,' he noted.