Patrick Doyle: Pizza redesign could have been the end of Domino's
Spending $75 million on a marketing campaign to tell the world you had a subpar product is risky.
It’s even riskier when you’re a 50-year-old company with 9,000 corporate and franchised stores and about 10,500 full-time workers.
But when Ann Arbor Township-based Domino’s Pizza in 2009 decided to completely redesign its pizza recipe and ask consumers to give it a shot, CEO Patrick Doyle knew it was a dangerous gamble.
Domino's CEO Patrick Doyle addresses a group of Pizza Prep students in a classroom at Domino's headquarters in Ann Arbor Township.
Melanie Maxwell | AnnArbor
“Let’s be clear on this: If people tried (the pizza) again and they had a bad experience, we’d be done. They will never try it again,” Doyle told a group of Domino’s employees at the company’s Pizza Prep School last week. Pizza Prep is a four-day intensive training program for all new corporate employees and franchisees.
Doyle was named Domino’s Pizza’s CEO in January 2010 after David Brandon resigned to become the athletic director of the University of Michigan. The process to redesign the pizza started under Brandon, and Doyle then steered the company through its launch.
Driven by flat same-store sales and store closures in 2009, Domino’s used a six-week, $75 million marketing campaign to get a message across: its old pizza recipe just wasn’t going to cut it anymore.
The advertisements highlighted real customer feedback — from people saying the crust tasted like cardboard to someone calling it the worst pizza they’ve ever had.
It also introduced the new core pizza recipe, which includes a garlic-seasoned crust, bolder tomato sauce and shredded instead of diced mozzarella cheese.
Domino's Pizza's headquarters in Ann Arbor Township.
Melanie Maxwell | AnnArbor.com
Domino’s spent 200,000 hours retraining employees at all of its U.S. locations as part of the campaign, and offered a money-back guarantee to consumers who didn’t like the new recipe.
“We retrained every single pizza maker in the country,” Doyle explained. “We brought 100 people in here for a week and trained them, and then sent them out and they each had 50 stores. They took them in groups of two or three stores a day and retrained every single one.”
Since the pizza redesign, the company has rolled out a series of additional menu changes, including introducing chicken products, adding artisan pizzas, redeveloping the cheesy bread, adding Parmesan bread bites and offering gluten-free pizza crust.
Domino’s spokesperson Chris Brandon told AnnArbor.com that since 2008, about 85 percent of the restaurant’s menu is new or revamped in what he calls a “complete overhaul.”
And so far, it seems to have worked in the company's favor.
Domino’s was valued at $1.72 billion on Monday, based on a stock price of $29.72. It raked in 105.3 million in sales in its fiscal 2011 year, up 19.8 percent from 2010 when the company experienced a year of straight sales growth.
The company’s fourth quarter profit in fiscal 2011 was $30.9 million, a 27.9 percent increase from the fourth quarter of 2010.
In the first quarter of fiscal 2012, the company's profit fell 24 percent, hurt by lower revenue and costs related to a debt recapitalization completed during the quarter. But revenue in restaurants open at least one year rose 2 percent domestically and 4.7 percent abroad.
Domino’s also hit two company milestones this year: As of March 25, its international store count exceeded its domestic stores, and the company reached $1 billion in digital sales from April 2011 to April 2012, with online orders via its website and mobile ordering platforms accounting for 30 percent of total sales.
And Doyle said Domino’s is still eyeing growth in untapped international markets, but also domestically. He said there is room for probably 1,000 more stores in the U.S., where Domino’s is “committed” to continue growing.
Reflecting on the menu overhaul and risky marketing campaign, Doyle said Domino’s has come a long way since the company “fell on the sword” and candidly asked consumers to give its pizza another chance.
And luckily for him — and his job — the decision paid off.
“We said we’re going to throw the old pizza under the bus and the new pizza is more expensive…thankfully, it worked, otherwise my successor was going to have a really tough time fixing this,” he joked.
Watch Domino's Pizza's "Pizza Turnaround" documentary from 2009 below.
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
Iliketurtles
Thu, Jun 21, 2012 : 12:17 a.m.
I like pizza.
UlyssesWrong1
Wed, Jun 20, 2012 : 5:42 p.m.
I was a big fan of Dominos pizza back in the day, the sauce was loaded on the pizzas, cheese was delicious, crust was amazing, overall very good. But I guess people didn't like it? Really? These days, it tastes like some crap made cheaply because Domino's is trying to save money by cutting corners on quality to save money. And Domino's tells us people love that? Really? Maybe my taste buds work differently.
julieswhimsies
Tue, Jun 19, 2012 : 10:08 p.m.
I hope Domino's is able to keep the company going. Not because I'm a big fan of Tom Monaghan (I am NOT), or any of the other corporate big wigs at this company. Their pizza is and always has been horrible. I feel for the thousands of employees who will lose their jobs. *go to Aubrey's*
bobslowson
Wed, Jun 20, 2012 : 7:44 p.m.
Back in high school (late 80's) I had a friend that worked at the Domino's on Dewey st (which I think is Mr Pizza or a Burrito place now). He showed up to work one day without shaving for a couple days and the manager gave him a razor and told him that if he didn't shave he was fired on the spot. Not sure if they still do...but they used to have a ridiculous "no facial hair" policy....dictators!
jns131
Wed, Jun 20, 2012 : 3:09 p.m.
We had a family member work there in the 80s. Quit when he was told he wouldn't receive a raise because his performance was not up to par. I believe the reason was a funeral and could not work one weekend. Dominos treats their employees rather unfairly.
leaguebus
Tue, Jun 19, 2012 : 8:28 p.m.
As Mr Doyle seems to know, all companies must change if they want to stay at the top of their game. Plus they must spend money on R and D. It certainly worked for Apple.
aabirder
Tue, Jun 19, 2012 : 4:42 p.m.
It's become fashionable to knock Domino's. In Ann Arbor it's hard to beat Cottage Inn pizza, and Domino's doesn't, but their new pizzas are very good nonetheless. One reason that Cottage Inn comes out ahead of Domino's in polls is that Cottage Inn has a larger pizza menu than Domino's, 28 vs. 18 named pizzas at their respective websites. You're more likely to find a favorite from among 28 than from 18. I have three big favorite pizzas at Cottage Inn and only two, I'd say, at Domino's, but who needs more than two?
Chicagobob
Tue, Jun 19, 2012 : 2:57 p.m.
I'm not sure about corporate values that result in millions of people pumping tons of fat into their mouths every day. Yes, it's nice to see a company growing, but we need to ask about the the short-and long-term costs to the overall health of people who eat excessive amounts of the high fat food. A company's P.R. staff can argue that a company is simply giving people what they want. My question is: what kind of company would knowingly promote food that increases the risk of heart attacks and high blood pressure?
Use Logic
Tue, Jun 19, 2012 : 9:19 p.m.
Nobody a at Domino's advertised that all of their pizza - new or old recipe - was healthy. These aren't cigarettes; their nutrition information and ingredients can easily be found in their stores or on their website, and yes, they aren't very healthy. That's why we, as a family, stopped ordering from them. But when did people stop becoming personally responsible? Do we really need people to tell us that most pizza is unhealthy, that we shouldn't use an electric toaster in the bathtub, or that the coffee in our hand may be hot? Actually, now that I think about it, having even more ridiculous warnings on things may be a good thing, it'd take up too much room on advertisements to show us anything of value, therefore eliminating advertising once and for all. (Note heavy sarcasm)
paniroza03
Tue, Jun 19, 2012 : 6:30 p.m.
Every food company?
Max
Tue, Jun 19, 2012 : 3:31 p.m.
Bob, do you know what kind of company tries to force it's customers into buying things that they don't want or what kind of company tries to dictate what it's customers can and cannot eat??? A bankrupt company.
ManA2
Tue, Jun 19, 2012 : 3:21 p.m.
Lots of ways to order pizza that are healthy Chicagobob. A couple of slices with veggies on them makes a very healthy meal.
Blue Marker
Tue, Jun 19, 2012 : 2:45 p.m.
Pizza House! Sure, they're pricy but their pizza is excellent! I don't really like Domino's, Jets, Little Caesars or any of the chains.
jns131
Wed, Jun 20, 2012 : 3:06 p.m.
I gave up on all the chains when I brought home a cold Little Caesars pizza. Center was not cooked and the rest well, yuck. This is why we do our own or buy fresh and bake our own. Just can't do chains anymore. Shudder.
Atticus F.
Tue, Jun 19, 2012 : 2:38 p.m.
The pizza is now even worse than before the "transformation". The only saving grace for domino's, was the sauce... which they changed the recipe. Also, my main gripe, and the reason I stopped ordering, was that there is something wrong with the cheese, it's too 'gooey', and it retains its gooey texture even after you put it in the fridge... quality cheese does not have that property.
Atticus F.
Tue, Jun 19, 2012 : 3:07 p.m.
Doug, cheese should not retain it's melted texture after you put it in the fridge... I'm sorry, but you are just flat out wrong.
Doug
Tue, Jun 19, 2012 : 2:46 p.m.
Processed cheese does not have that property. Good cheese does!
jns131
Tue, Jun 19, 2012 : 1:51 p.m.
Wow! What an expensive gamble. Glad we make our own or buy something frozen or fresh from the store.
Robo
Tue, Jun 19, 2012 : 1:49 p.m.
Mani Osteria. fagedaboudit.
brimble
Tue, Jun 19, 2012 : 7:24 p.m.
vale ogni centesimo
Doug
Tue, Jun 19, 2012 : 2:45 p.m.
Troppo costoso per il mio sangue!
brimble
Tue, Jun 19, 2012 : 1:36 p.m.
Chains have to yield to reproducibility and cost constraints; customers want to know what they are going to get, and demand only that it is decent, not that it is great. That Domino's is willing to take this risk shows some real corporate moxie! For something a little more 'artisan', get take-out from Ann Arbor Pizza on Packard and Crestland (south of Stadium). The sourdough crust is great.
Adam
Tue, Jun 19, 2012 : 4:02 p.m.
I agree. Ann Arbor Pizza is outstanding, I highly recommend their sesame cheese bread.
goosenews
Tue, Jun 19, 2012 : 1:34 p.m.
I ordered two pizzas last week during theire half off special. The web ordering was nice and simple, but more importantly the pizzas were pleasantly appetizing.
Basic Bob
Tue, Jun 19, 2012 : 1:19 p.m.
Ann Arbor is fortunate to have so many great choices for pizza. Other places, especially in the south, you are lucky to find an independent Mom 'n Pop pizza joint. So the real competition is the Cold-and-Old variety from that other Michigan chain. Neither is a gourmet dining experience, but they are decent when you are in a hurry or have a pack of teenagers to feed. At least now it is better than eating the box.
NotABleedingHeartLiberal
Tue, Jun 19, 2012 : 1:16 p.m.
Domino's pizza is disgusting! The sauce always tastes like it was made with rotten tomatoes. The crust is hard. ANY other pizza place can beat out Domino's anyday!
Doug
Tue, Jun 19, 2012 : 2:31 p.m.
Ya, and that's why they are making millions!
oldguy
Tue, Jun 19, 2012 : 1:16 p.m.
Their pizza was barely mediocore 25 yrs ago when I stopped eating it. Recently trapped at a house where the host ordered Dominos... the new is just as blah as the old. I`ll take Cottage Inn`s anyday.
Thomas Jones
Tue, Jun 19, 2012 : 12:49 p.m.
There pizza is ok.... Frankly there are too many pizza joints in Washtenaw County.... But for this area and the HQ being here this is great for the local econ. 20% incearse is big. If other people are a fan outside this state then bravo!! I welcome the incearse in cash flow to this state!!!!! Great job, Pat Doyle!
Cash
Tue, Jun 19, 2012 : 12:23 p.m.
Too bad you didn't stop the inhumane treatment of animals, Patrick. No Dominos for me. http://www.sodahead.com/living/texas-pig-farm-applauds-dominos-for-keeping-gestation-crates-should-animals-be-treated-like-this/question-2662323/
jns131
Tue, Jun 19, 2012 : 1:49 p.m.
Plus the other one who also should be boycotted as well. We make our own since there are a lot of inhumane treatment of animals in a lot of our foods. Thanks for this mention.
NewYorkerinAA
Tue, Jun 19, 2012 : 12:51 p.m.
Agreed! Even if he is one of Michigan's own. http://www.annarbor.com/business-review/dominos-shareholders-reject-humane-society-confined-pig-request/
Lac Court Orilles
Tue, Jun 19, 2012 : 12:16 p.m.
Millions of people may like the new pizza, but I couldn't stand a garlic-seasoned crust. Garlic leaves a nasty taste in your mouth for about 24-36 hours, and offends people you come into contact.
Britain W.
Tue, Jun 19, 2012 : 2:35 p.m.
I usually ask them to go light or omit the garlic crust seasoning.
Billy Bob Schwartz
Tue, Jun 19, 2012 : 2:02 p.m.
What...garlic on an Italian food? Outrageous!
Rob
Tue, Jun 19, 2012 : 12:12 p.m.
When are they going to put the new recipes into production? I had some Saturday at the marathon expo at Briarwood, and it was about as tasteless as any pizza I've ever had.
actionjackson
Tue, Jun 19, 2012 : 10:52 a.m.
Maybe in some areas but I'll take an Anthony's pizza anytime.
UlyssesWrong1
Wed, Jun 20, 2012 : 5:38 p.m.
Anthony's is indeed the best pizza in Ann Arbor. And it better be, since their prices are 2x that of Dominos and other chain pizza places.
Alvin Mamuyac
Tue, Jun 19, 2012 : 4:54 p.m.
Agreed! My wife and I are addicted to Anthony's New York Style Pizzas!!!
the major
Tue, Jun 19, 2012 : 1:19 p.m.
Anthony's is the ultimate!! Started going when I was located in HOPIN on stadium and packard.
Adam
Tue, Jun 19, 2012 : 12:58 p.m.
Roasted garlic on an Anthony's Chicago style is what heaven tastes like.
J
Tue, Jun 19, 2012 : 12:28 p.m.
As a public service announcement for any Anthony's newbies out there: All their pizza is excellent, but it's their Chicago style that makes them the pizza king of Ann Arbor.