The Ukrainian pizzeria market is far from saturated and continues to grow steadily.
In our article, we will deliberately omit the frozen convenience food market, which represents a specific niche targeting a different consumer group.
A distinctive feature of the freshly prepared pizza market is the relatively low barrier to entry and ample opportunity for small local operators to successfully compete with large chain players by offering their product in all market segments at a similar or even lower price.
The key to this is the profitability margin, determined by the current price level on the market.
A pizzeria is a business ideal for both network projects and family businesses.
Investments in opening one establishment range from 30,000 to 150,000 euros, while the profitability typically exceeds 100% per annum.
Pizza is a fairly affordable food item. According to statistics, its popularity and, consequently, consumption among Ukrainians is constantly growing.
There are several concepts for organizing pizzerias:
• pizzeria-restaurant;
• pizzeria in a supermarket;
• Deliveri – pizza;
• pizza kiosk.
Pizzeria-restaurant
A restaurant where pizza is the main dish. The production process may be located in the production area, or it may be located behind glass (for a production show), or it may be partially located in the dining room, where pizza assembly and baking take place.
Pizzeria in a supermarket
In this case, pizza preparation can take place in the checkout area or directly on the sales floor. This option involves placing the production part in the production area, but it can also be moved behind glass (for a production show), and sometimes partially moved into the sales area for pizza assembly and baking.
Pizza kiosk
A fast food restaurant is a self-contained, mobile fast food establishment. In addition to pizza, which is conceptually the main dish, customers may also be offered sandwiches, paninis, and deep-fried items (chebureki, pirozhki). They are typically located in high-traffic areas, such as near shopping malls, amusement parks, and so on.
Pizza market.
Semi-finished chilled and frozen pizzas are rarely used in restaurants (or in snack bars and cafes), as their quality is infinitely different from the Italian original, which is prepared in classic pizzerias according to traditional recipes.
The second reason for the refusal of ready-made pizza sellers is the high cost of semi-finished products.
Traditional pizza is a must-have dish on the menu of Italian restaurants.
Another feature already mentioned is the strong market segmentation, and according to our estimates, no single operator occupies even 5% of the market share nationally, which leaves a lot of room for small independent operators.
Market volumes.
If we talk about rough estimates of the pizza market, its annual turnover in 2007 will most likely exceed 55-70 million dollars (the turnover of one pizzeria can exceed 500 thousand dollars per year).
According to our estimates, the market growth rate is 20-25% per year.
Market situation.
Currently, the restaurant pizza market is not saturated nationwide, but in major cities, especially Kyiv, competition among players is already present. The situation is further complicated by large retail chains and establishments from related industries offering this dish (including restaurants serving ethnic cuisine, such as Japanese and Mexican restaurants).
In these conditions, the choice of an establishment's positioning strategy plays a major role - players strive to stake out a particular market niche. For example, the pizzeria "Pizza Sole Mio" offers Italian restaurant-quality pizza in a fast-food setting; "Sbarro" offers "American" pizza, as well as stromboli, calzone, and lasagna; "Pizza Fabrika" offers "urban" pizza within walking distance with a well-developed delivery service.
Development trends.
In the near future, the market will develop extensively - due to the opening of new pizzerias.
The most promising formats include pizzerias within food courts in shopping malls, ready-to-eat pizza delivery, and affordable pizzerias within restaurants. Incidentally, in most cases, freshly made pizza is eaten where it's baked.
This is not surprising, since pizza is at its best during the first 15-20 minutes after baking.
Our estimates (based on surveys of operators) show that 20-30% of pizzas produced by establishments positioning themselves as pizzerias are sold for takeout.
For this reason, we cannot recommend a pizzeria with a delivery service for new businesses.
The "entry ticket" to the pizzeria market – with a delivery service in a large city – will cost no less than 130-200 thousand.
Euro per point.
This market is already divided among major players, and we believe that pizza delivery services will gradually lose market share to small, conveniently located takeout pizzerias in the coming years, opening up great opportunities for small investors and large franchise chains.
In order to increase sales volumes and business profitability, the addition of additional business lines to the pizzeria is becoming increasingly common:
- sales of cold desserts (soft ice cream, hard ice cream and desserts based on it, sherbets, etc.);
- sales of freshly squeezed juices;
- sales of vegetable and fruit salads.
Pizzeria from scratch.
If an entrepreneur decides to start a pizzeria from scratch, they should be prepared to spend a significant amount of time coordinating documents with numerous bureaucratic agencies.
To open you will need:
1. Premises.
2. Equipment.
3. Recipe.
4. Supplier of ingredients.
4. Cooks and service staff.
Premises.
Pizzerias, despite the variety of formats, cannot be opened in any available space.
Moreover, if there is a shortage of premises in your area, its location and type can clearly predetermine the format of your pizzeria.
For a pizzeria to generate good income, it must be located in a busy area with good access roads, preferably close to the city center or in large shopping malls in specially designated areas (food courts).
You'll likely need to invest in renovations to the space. Decorating the hall will also require some expense.
It is necessary to take into account the presence of utility lines in the premises necessary for connecting the equipment.
The minimum area required to open a pizzeria with a hall is 100-120 sq.m.
The kitchen here takes up about 35 - 55 square meters.
Equipment.
We strongly recommend that you decide on the premises before you start selecting equipment.
It is fundamentally important for investors to understand the pizza-making process and the impact of the degree of automation on the quality of the finished pizza.
Currently, there is a simplified idea that the following equipment is required to prepare pizza: a dough mixer, a dough molding press (crust), and an oven.
You can see in practice that this list of equipment is not mandatory.
Much attention must be paid to the proper selection of equipment, which is impossible without understanding the cooking technology.
The investor's lack of a clear understanding of what is happening inside the pizzeria is the main reason for mistakes during launch and incorrect cost estimates and approaches to hiring personnel.
It's important to remember that a significant portion of the budget will be spent on cold storage, flour storage cabinets, workbenches, refrigerated tables, and pizza warmers.
Very roughly, the costs of purchasing equipment and inventory range from 10 to 50 thousand dollars.
To set up a small pizzeria you will need an area of at least 12 m² and the following basic pieces of equipment:
• flour sifter,
• dough mixer ,
• vegetable cutter ,
• slicer ,
• cheese grater,
• blender ,
• pizza press (or dough rolling machine),
• pizza collection table ,
• pizza oven .
Recipe and ingredients.
The ratio of the cost of ingredients to the cost of the finished product is usually 1:8; in Western Europe, the minimum level sufficient to ensure the profitability of an establishment is considered to be 1:5.
The main "company secret" is the recipes that allow us to prepare delicious pizza at a low cost, which is determined not least by the competent selection of ingredient suppliers and the qualifications of the pizzaiola (pizzaiola (Italian) - the chef responsible for preparing the pizza).
Helpful tips: - Pizza is a dry product that needs to be washed down with something, so in this case, accompanying products would be juices, water, beer, wine, salads, and ice cream.
- Pizza is an Italian product, so related sales should also be maintained in this style.
Pizza itself is a product of quick preparation and consumption, which dictates the format of most pizzerias, close to fast food, meaning that strong alcoholic drinks in a pizzeria are unnecessary.
Their presence in the assortment will inevitably destroy the concept of the establishment.
How to increase profitability?
The easiest way is to sell pizza cut into slices.
This allows us to increase the ratio of product cost to sales cost to 1:20.
Other very promising areas include:
- sales of freshly squeezed juices;
- sales of cold desserts.
Both the first and third options fit perfectly into the pizzeria format, don't take up much space, and are easy to organize and manage.
Stages of organizing the production and retail sale of pizza.
1. Selecting a location suitable for opening a pizzeria.
2. Request from the State Sanitary and Epidemiological Service for information on the suitability of the premises for organizing production and providing services in the public catering sector.
3. Preparation of technical specifications for the development of a technological project in accordance with the requirements of the lessor.
4. Search for a designer and development of a technological design for the premises .
5. Conclusion of a lease agreement for the premises.
6. Search for suppliers. Concluding contracts.
7. Repair of the premises and provision of it with the necessary infrastructure in accordance with the technological project.
8. Search, selection and hiring of personnel.
9. Delivery of equipment to the site and its commissioning.
10. Personnel training (two to three weeks before equipment launch).
11. Purchase of raw materials and accessories.
12. Obtaining a permit to operate from the State Fire Service.
13. Obtaining a Sanitary and Epidemiological Conclusion from the SES and a Product Range List of sold/manufactured products.
14. Obtaining a Sanitary and Epidemiological Conclusion on the approval of the plan (program) for organizing and conducting industrial control.
15. Obtaining a certificate of entry in the Trade Register.
16. Obtaining a Certificate of Conformity with regulatory requirements of documents on safety indicators.
17. Conclusion of an agreement (for physical and chemical studies of food products, disposable tableware, disinfectant solutions, microbiological studies of water, swabs, food products; studies of microclimate, illumination, noise) with the Laboratory at the SES.
