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Pizza Stores Copy Chipotle Mexican Grill

By Michael Hooper - Oct 24, 2013 at 4:08PM

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Chipotle's create-your-own burrito concept is so wildly popular that pizza companies are using the concept to cater to customers who like to build their own pizza.

Chipotle Mexican Grill ( CMG 1.97% ) has revolutionized the way consumers eat in America. Customers love Chipotle's create-your-own meal concept. The concept is so popular that it is used in the sandwich business, and now the pizza business as well. Several restaurant brands are launching create-your-own pizza concepts in California, Kansas, Minnesota and Texas. Guests walk the service line as they build their own pizza from multiple ingredients.

At least 10 different pizza companies have sprouted up in the past couple of years selling personal pizzas with Chipotle's create-your-own meal concept. Buffalo Wild Wings ( BWLD ) believes so wholeheartedly in this space that it invested in PizzaRev's 'Craft Your Own' fast-casual pizza concept back in March. As the first franchisee, Buffalo Wild Wings plans to open several PizzaRev stores around its home base in Minneapolis, with the first to open in the first quarter of 2014.

"Over the past year, Buffalo Wild Wings has been investigating emerging restaurant concepts with high growth potential as we continue to build our dynamic company," said Kathy Benning, Buffalo Wild Wings executive vice president of global marketing, brand and business development. "Along with chicken wings, pizza is one of America's most popular foods and we believe that PizzaRev has great potential for continued growth and success."

PizzaRev is a Los Angeles-based fast casual pizza chain founded by Irv Zuckerman and Rodney Eckerman, former co-CEOs of Clear Channel Entertainment. PizzaRev has five locations in California, with plans for six others to open in the near future. Meanwhile, Buffalo Wild Wings has about 1,000 restaurants in the US, which means the market may reach saturation soon. PizzaRev gives the company a new tool for growth, and pizza will not compete with chicken wings. 

On a similar note, Chipotle has 1,500 stores, which means that at some point the Mexican Grill will reach saturation in the United States. Chipotle has opened two locations of its ShopHouse SouthEast Asian Kitchens, but may want to think about getting into the pizza business. After all, the company is the pioneer of the create-your-own meal concept. It's simple and it's profitable. The burrito factory keeps costs down by not hiring waiters or waitresses. The company puts its resources into its ingredients. Chipotle's Food With Integrity program is committed to "finding the very best ingredients raised with respect for the animals, the environment and the farmers." Pizza is all about ingredients, too.

Fast-casual pizza start-ups
Others in the fast-casual customized pizza space are College Hill Pizza Pub in Kansas, Pie Five Pizza in Texas and Uncle Maddio's Pizza Joint in Atlanta. 

Pie Five Pizza, owned by Pizza Inn Holdings, first opened in Dallas in 2011 and now has 12 locations in Texas and one each in Kansas, North Carolina and Utah, and plans to enter the Houston market in 2014. The company has more than 100 Pie Five franchise locations under contract.

Pie Five's owner Pizza Inn was founded in 1958, and grew to more than 700 stores but went into bankruptcy in 1989 and closed and sold off stores. Now the company franchises and owns about 300 stores, and the company is focused on building its Pie Five concept. Pizza Inn's stock was up 149% year-to-date through Oct. 24.

The future of pizza
Chipotle's create-your-own meal concept is taking off like wildfire around the country. Pizzerias are emulating the company's concept by offering customized pizzas in a fast-food service line. Chipotle may want to enter this pizza niche too, considering pizza is one of the most popular foods in the world. Buffalo Wild Wings believes there is a lot of growth potential in this space. Look for a create-your-own pizza store to open in your neighborhood soon; I predict there will be 500 of these types of restaurants in five to seven years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Chipotle Mexican Grill, Inc. Stock Quote
Chipotle Mexican Grill, Inc.
$1,623.46 (1.97%) $31.36
Buffalo Wild Wings, Inc. Stock Quote
Buffalo Wild Wings, Inc.

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