According to market researchers NPD Group, Americans lost weight last year and ate healthier. Meanwhile, Yum! Brands' (NYSE:YUM) Pizza Hut introduces Fit 'N Delicious pizzas. Given that the surprise of the study was that people are interested in a balanced diet, a fit pizza looks on target.
With 15% less fat than the chain's Thin 'N Crispy pizza, the Fit 'N Delicious comes with a generous amount of tomato sauce and half the cheese, with either ham or chicken as options. And you get two of the following: green pepper, red onion, mushroom, jalapeno, tomato, or pineapple.
Whether a pizza with extra tomato sauce needs tomato as a topping is a question for another day, as is "who ordered that jalapeno and pineapple pizza?" Yuck! No worries. Early sales success will probably be determined by how the pizza looks in TV commercials and print ads.
Give Pizza Hut credit for innovation. If America's tastes are truly changing, this is a good move. Another NPD Group study shows that pizza has grown in 10 years from the eighth most served main dish at dinner to second. If it takes a Fit pizza to grow the market from here, Pizza Hut is ready.
And really, Fit pizza is low risk. It doesn't require new ingredients, so there are few changes at the local level except for signage. If it draws from the weight-conscious masses that would never touch a regular pizza, those are incremental sales that will fatten earnings -- a win-win.
Salad days
As we reported, Pizza Hut recently clocked its best quarter in two years. But the innovation and growth may be just starting. Pizza Hut is also offering, in select markets, bagged salad kits. The kids get pizza; mom and dad can have a salad. Salads are certainly on target for incremental sales growth.
There is also one big risk: Will we have to endure a Clara Peller clone for 2003? (Clara, you'll recall, became famous for yelling "Where's the beef?" for Wendy's (NYSE:WEN) back in the '80s.) Might not a clever competitor shout, "Where's the cheese?"
W.D. Crotty LOVES pizza and will audition for the new Clara Peller role. When on (note the key word "on") the Atkins diet, he misses the all-meat Pizza Hut pizzas. He also, as you should have suspected, is a YUM! Brands shareholder.
