Pizza Places Craving More Latino Dough

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When the Pizza Patron Inc. chain signed L.A.-based Hispanic radio star Piolin as a pitchman, it was a declaration of war for a slice of the Latino pizza-buying market.

Dallas-based Pizza Patron only has two of its 70 stores in Los Angeles, but three more are under construction and there are plans for others in the works. The chain will not only be competing with La Pizza Loca Inc., based in Santa Fe Springs and with 44 stores in the L.A. area, but with large chains such as Little Caesars, Pizza Hut and Domino’s.

It’s an odd battle over a demographic that has been traditionally inclined to favor food from their native lands.

That’s changing, though, and it means that fast-food companies view the growing Latino population, already the largest minority group in the United States, as a critical market. The resources the pizza chains are dedicating to the fight for market share are another indication of the transition.

Pizza Marketing Quarterly, a trade Web site, noted that pizza was not among the traditional choices for Latinos, for cultural and cost reasons. “Tacos, burritos and the like are much less expensive than pizza.”

But Wilson Camelo, a principal at ad agency Bauza & Associates, has seen the shift.

“Today’s Hispanics are largely from the second and third generations and are more acculturated, so we have a lot of influence from U.S. mainstream culture, including food,” Camelo said.

He added that Latinos strongly prefer fresh food, and research shows Latino families lag behind the U.S. average in the consumption of frozen pizza, prompting the delivery chains to fill the need.

The term “Latino pizza” might evoke images of toppings like chorizo, jalape & #324;os and carne asada sprinkled over cheese. While such pizzas do exist, that’s not what the fight is about.

“There’s nothing really different about the pizza. Your basic pepperoni is still the No. 1 seller among Latinos,” said Antonio Swad, founder and chief executive of Pizza Patron.

Mark Edwards, president of operations at La Pizza Loca, said that pepperoni remains the top seller at his chain, too, especially among younger assimilated Latinos.

For years, Swad had tried to compete solely on price, because the major pizza chains routinely charged $15, compared with Pizza Patron’s $4.99. But prices in the industry have fallen, and Swad concedes that now everyone competes around the $5 price point.

That led to Swad’s hiring of a celebrity spokesperson. Piolin has the top-rated Spanish-language morning show in Los Angeles, beating Ryan Seacrest and Kevin & Bean. The comedian syndicates his show, which originates on Univision’s KSCA-FM (101.9) in Glendale, on 645 stations nationwide.

With the Piolin campaign, Swad plans to concentrate on Latino culture as a competitive advantage. The radio personality’s image will appear in advertising and in-store promotions.

“We’re looking for a long and prosperous relationship, and we’ve made a significant investment to produce the advertising materials,” said Swad, who declined to disclose financials of the deal.

Michael Rodriguez, managing director of Wave, a multicultural marketing agency in Dallas not involved with Pizza Patron, believes it’s a good move.

“Latinos want to do business with people they feel they know and recognize,” Rodriguez said. “That’s why Pizza Patron does so well they are in those communities.”

The major brands, such as Pizza Hut, generally target the Latino market with their English campaign translating directly into Spanish, according to Camelo at Bauza.

“They haven’t done a good job at what we call trans-creating their message,” Carmelo said. “It’s the same general-market message.”

In contrast, Pizza Patron targets its core audience of Latino families by opening stores in neighborhoods with at least 40 percent Hispanic population density. The staff greets all customers in Spanish, and the background music features favorite Latino songs.

Pizza Patron announced last year that it would accept payment in Mexican pesos, unleashing the fury of anti-immigration pundits and bloggers. The chain still accepts Mexican currency at all locations.


World’s biggest market?

Swad started Patron in 1986 and slowly built it up to four stores, all in Texas. Meanwhile, he started a chain called Wing Stop, based on a chicken-wing menu, which he sold when it hit the 100-outlet milestone. It currently has more than 550 restaurants, and Southern California ranks as one of its prime growth markets.

With money from the Wing Stop sale, Swad decided to franchise the Pizza Patron concept.

“The L.A. market is potentially the biggest and best market for Pizza Patron in the world,” Swad said. “But we are a relatively unknown brand in a market with a lot of worthy competitors. We have our work cut out for us.”

It will be tough going, Rodriguez said.

“Domino’s has made a concerted effort to sell to Latinos, and Little Caesars is a huge competitor for Pizza Patron,” he said. “The reason Little Caesars does well is the service ‘hot and ready.’ Pizza Patron has come up with products to compete with that.”

Brett Fielder, franchise owner of the two Patron restaurants in L.A. County, described his experience as mixed so far.

“During the last six months we’ve seen sales grow every week,” he said. “Our mistake was to only open two stores. If you go to Dallas, everybody knows who Pizza Patron is; the same in Phoenix. That’s because somebody opened a lot of stores there.”

Fielder doesn’t plan on opening more stores, but he knows he’ll benefit from the chain’s expansion here. “With other stores opening we’ll get exposure,” he said.

Regardless of the Piolin campaign, Swad’s strategy isn’t based on mass media.

“If a church in the neighborhood has a health fair, and they expect 200 people, that’s exactly the kind of event we want to participate in, with giveaway shirts, pizza samples and free pizza to volunteers,” Swad said. “Other companies would say 200 people aren’t worth it. We’re not basing our brand on product or price, but on the culture of our company.”

Originally, Swad wanted to develop Pizza Patron with experienced fast-food executives, which is what he did with Wing Stop. But “that type of developer couldn’t make the connection with the community,” he found. Instead, Pizza Patron seeks franchisers, preferably of Latino heritage with deep roots in the local community, including school and church groups. “They’re Hispanics looking to get back into the community and serve it,” Swad said.

Edwards of Pizza Loca said his chain plans no new initiatives in response to Patron’s Piolin campaign.

“We have a proven formula that has been successful and will continue to prove itself,” he said. The company plans to continue to advertise with direct mail and Spanish-language TV.

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