Delivery is on: Can Pizza Hut grab a bigger slice?

Twenty-five years in India and the world's biggest pizza player is still a distant No 2 to Domino's. Can Pizza Hut's latest brand positioning—Dil khol ke delivering—help it deliver a sucker punch?

Published: Dec 8, 2021 02:02:46 PM IST
Updated: Dec 9, 2021 04:31:46 PM IST

Twenty-five years after entering India, Pizza Hut is now kneading new pizza dough in an attempt to reflect a new reality: It can deliver! Recently, it rolled out a campaign—Dil khol ke delivering—which underlines the message that the brand not only excels in delivery of pizzas, but also delivers on a bunch of other metrics such as taste, value, customer service and offers
Image: Amit Verma


It all started with vanity, sanity and reality. In June 1996, Pizza Hut was opening its first store in Bengaluru. And there was an element of vanity for the world’s biggest pizza brand. It was making its India debut ahead of rival Domino’s, which too set shop in the country in the same year. Being the first one, and having the first-mover advantage by a few days and months, helped Pizza Hut score brownie points, and make some extra cheese.

Back in 1996, starting as a dine-in restaurant—the DNA of Pizza Hut—ensured sanity in business. Indians was warming up to the concept of quick service restaurants (QSRs); burger giant McDonald’s had entered the country a year before, and so did rival KFC; and the lavish in-store food experience offered by the global biggies whetted the appetite of the consumers. Almost every QSR player sharply focussed on dine-in, and it made sense. This was the reality of the QSR industry then. The brand positioning was clear: While Pizza Hut had its perfect mojo in dine-in, rival Domino’s found nirvana in delivery.

Cut to 2021, the world’s biggest pizza brand is confronted with a new set of vanity, sanity and reality. Pizza Hut is a distant number two in India, and wearing the badge of the biggest in the globe doesn’t add to its vanity. Dine-in has taken a brutal knock, thanks in large measure to Covid, and delivery has ushered in sanity for all rattled players scrambling for business. The ground reality too has changed. Domino’s is not only the biggest player but has also become synonymous with delivery.



Twenty-five years after entering India, Pizza Hut is now kneading new pizza dough in an attempt to reflect a new reality: It can deliver! Recently, it rolled out a campaign—Dil khol ke delivering—which underlines the message that the brand not only excels in delivery of pizzas, but also delivers on a bunch of other metrics such as taste, value, customer service and offers.

Neha, chief marketing officer of Pizza Hut India, explains the idea behind the campaign. “Dil khol ke delivering is not just about delivering pizzas for us,” she says. It is about setting new benchmarks and elevating the overall pizza-eating experience that Pizza Hut is loved for, she adds. What it also essentially means is dumping the baggage of dine-in that the American pizza giant has always carried in India.

Getting rid of the millstone makes sense. Reason: Pizza Hut had donned a new avatar. In fact, even before the onset of Covid—before March 2020—the brand was getting a dominant portion of its revenues from delivery. While the dynamics of the business changed over the last few years, the perception stayed. “We were not perceived as a delivery brand,” rues Neha, underlining the irony. In order to be seen as a delivery brand, she lets on, people must be aware of the fact that Pizza Hut was big on delivery.

There were other conspicuous changes as well that went unnoticed. First was the size of the stores, which kept diminishing and helped Pizza Hut make a transition from dine-in to a QSR brand. While for the first decade, the brand wooed consumers through the grandeur of its stores and exceptional customer service—not to forget the delightful taste—it gradually saw the writing on the wall.

The market was fast steering towards delivery, which means Pizza Hut had to give up the vanity of expansive outlets. From an average of 2,000-2,200 sq ft stores in 2015, the stores shrunk to 1,200-1,300 sq ft in 2020 (see box). During the same time, the ‘concept’ stores—the huge ones—also dipped in terms as percentage of overall stores: From 66 percent in 2015 to 26 percent in 2020. During the same period, the percentage of QSR stores jumped: From 34 percent to 74 percent.

The second big change happened on the delivery front. The brand started taking the format seriously.

Back in 2008, Pizza Hut launched PHD (Pizza Hut Delivery), a sub-brand for delivery. What started as a pilot in Bengaluru gathered steam. By 2011, it reportedly had 35 PHD outlets, and the target for 2015 was an ambitious 300. Pizza Hut even flirted fleetingly with the idea of owning stores directly. In 2016, came the next big change, which stemmed from an acknowledgment of how delivery was becoming critical for QSR players. It started rolling out fast-casual delco (FCD) stores—smaller units more suited for delivery and for Tier II and beyond markets. Before March 2020, it reportedly had 72 such stores.

Though the brand kept growing in India through its two big franchisee partners—Devyani and Sapphire—what stayed stunted, and unchanged, was the perception around delivery. “Changing perception is a much harder job for a marketing person than changing reality,” reckons Neha.

Vipul Chawla, president of Pizza Hut International, explains why it takes long to shed perceptions. “It is important to recognise the legacy of the brand,” he reckons. Globally, Pizza Hut was born as a restaurant, offered restaurant-quality pizzas, and was associated with occasions that called for celebrations. And this is what it did in India for the first 10-15 years when it stayed consistent and extravagant with its on-premise show. And then came the shift. “Making the transition to an off-premise model takes time,” contends Chawla.



Over two-and-a-half decades in India, Chawla reckons that the brand has aced its game. Pizza Hut has made a significant pivot. “Legacy dependence on dine-in is likely to be a thing of the past,” he reckons, adding that the brand has won in India on taste, trust and quality. “Now we do want the number one position,” he says. “We are going to try harder,” he adds, alluding to the effort to take the crown from reigning king Domino’s.

The strategy is three-pronged: A sharper focus on delivery, a larger play in the value segment, and roping in Anuradha Menon aka Lola Kutty as ‘magnetic ambassador’. Can it turn out to be the magic sauce that Pizza Hut needs to finally deliver on its potential of becoming the biggest in India? Can Menon bring the same magic which Juhi Chawla brought to Kurkure and made it a household name? Can reinforcing the new avatar of delivery make it race ahead of Domino’s?



The task, reckon branding, marketing and food and beverage (F&B) experts, won’t be easy. Let’s start with the attempt of the brand to focus on delivery. Here’s the first reality check. In terms of positioning and imagery, it’s always the first guy who runs away with the spoils. “There is very little left for anyone else,” avers Harish Bijoor, who runs an eponymous brand consulting firm. Pizza Hut, he underlines, must look at a distinctive branding and positioning. “Playing around with the word delivery or delivering is just semantics,” he says. Take a look at Bisleri. Though there are other bottled players, but Bisleri has become generic for the category. Similarly, Domino’s is synonymous with delivery.

The second reality check is the gigantic size of the rival. While the combined Pizza Hut store count of Devyani and Sapphire is little over 500, Domino’s is almost three times the size with 1,435 stores by the end of second quarter of FY22. The huge gap gets reflected in the reach as well. While Pizza Hut is reportedly spread across 180 cities and towns, the number for Domino’s is 307, and is consistently growing.

The third reality, reckon marketing experts, explains why Domino’s managed to grow at a furious pace in India and forced Pizza Hut to perpetually play a catch-up game. “The silver bullet is focus,” says Ashita Aggarwal, marketing professor at Bhavan’s SP Jain Institute of Management and Research in Mumbai. She explains. In 1996, Domino’s entered India by inking an exclusive master franchisee agreement with Jubilant FoodWorks. For the next 15 years, Jubilant didn’t have any other brand to manage. “They didn’t have an option but to grow big with Domino’s,” she says. “It was a do or die.” 

Having one brand in the portfolio meant one simple thing: 1,000 percent focus and effort. It was only in 2011, that Jubilant decided to bring Dunkin Donuts to India. By then, Domino’s was a well-established and scripted story. Over the next four years, by FY15, the lead was massive. Pizza Hut’s 278 stores versus Domino’s 876. By 2020, the difference magnified: 452 versus 1,335 (see box). The runaway success of Domino’s, Aggarwal underlines, was largely due to its focus on delivery, and aggressive expansion. While Pizza Hut realised the value of delivery in 2008—when it rolled out PHD—it kept dithering and eventually shuttered this format. 

Cut to Devyani and Sapphire, the two big franchisee partners of Yum Brands, which owns KFC, Pizza Hut and Taco Bell. The story of Pizza Hut’s success or not-so-much-success can be traced to the growth of its two partners who had multiple brands under their portfolio. More brands, in simple terms, meant diffused focus.



Let’s start with Devyani, the biggest Pizza Hut operator in India. While Pizza Hut store count increased from 268 in FY19 to 297 in FY21, the corresponding numbers for KFC were 134 to 264. The story remains the same for Sapphire. While KFC store count jumped from 158 to 203 during the same period, Pizza Hut hobbled from 153 to 162.

What this also means is that for both the franchisee partners, KFC turned out to be more lucrative, and a better bet. While Sapphire closed seven KFC stores between FY19 and FY21, the number for Pizza Hut was 31. “This is a classical marketing problem of portfolio management,” says Aggarwal. Organisations, she points out, build portfolios to diversify risk but over time, their efforts and emphasis change. They pay attention and invest more into stronger brands.



The vanity and sanity for Pizza Hut won’t change much unless there is a drastic change in reality. A bigger slice for Pizza Hut is possible only if it aggressively expands its reach, beefs up its store count and stays true to its renewed promise to deliver. A new positioning can help it grand mindshare. But what it badly needs is market share.  

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