For a national pizza franchise, fluctuations in cheese costs could impact everything from menu prices to marketing promotions to overall financial performance. The same goes for other food commodities on its top-selling list of menu items. That’s why Marco’s Pizza jumped at the chance to work with the American Restaurant Association (ARA) to develop a tool that can take all the main products on the company’s menu and accurately predict store food costs in relation to commodity market forecasts month-by-month for the entire year ahead.
With food commodity costs accounting for roughly 30 percent of a restaurant’s revenue, access to the new technology is giving the nation’s fast-growing pizza company a competitive edge in the colossal pizza segment, benefitting both franchisees and customers.
“With this tool, we are able to forecast store food costs in a way that no one else in the industry has been able to up to this point,” says Marco's vice president Don Vlcek, who spearheaded the project with the ARA. “It’s a game changer for our brand, and will revolutionize the way our industry operates. The ability to provide our stores with far-advanced notice of when they should market certain food items, and the price points at which they market them, gives us a competitive advantage, while still offering customers periodic special deals on the products that they love.”
With the right technology in place to more precisely predict commodity markets on a long-term scale, the ARA was in need of an actual restaurant concept to help co-design the functionality of the tool. Recognizing that advance access to commodities information would help franchisees plan ahead for marketing, discounting and menu specials, Marco’s Pizza stepped up to provide the ARA with a much needed restaurant perspective on features to enhance real-life application and overall effectiveness.
Franchisees, including Angelo Ialacci who owns eight stores in southeast Michigan, are looking forward to putting the tool in action as they make marketing plans for the coming year. According to Ialacci, the tool will allow him to offer product deals on popular menu items without having to embrace a major expense.
“We originally began developing the tool with the overall evaluation of the national supply chain in mind,” says David Maloni of the American Restaurant Association Inc. “Marco’s Pizza was able to take the technology we had created and transform it in a way that can positively impact their franchisees’ bottom line.”
Focusing on franchisee support, product quality and high regard for vendors and employees, Marco’s Pizza more than doubled in size in less than five years. With plans to open more than 100 new stores in 2017 (averaging one every three days), the company is on track to exceed 900 locations by year’s end.
“One of our company tenets is ‘we accelerate innovation,’” says Marco’s Pizza president Bryon Stephens. “We were a co-creator of a forecasting tool that will not only benefit Marco’s but potentially the industry. It’s exciting to be a part of something much larger than ourselves.”