Domino’s Offerings Provide Insight into New Product Strategy | 2020-06-18


ANN ARBOR, MICH. – Call it a summer secret.

Domino’s Pizza, Inc. intends to launch its first new product in three years later this summer. As the company holds back the details of what the new product will be, Richard E. Allison, president and CEO of the Ann Arbor-based pizza chain, provided an overview of Domino’s innovation plan at a presentation at the Oppenheimer Consumer Growth and E-Commerce Conference on June 17th.

“Compared to the rest of the industry, we do very few new product launches, and one of the factors is that we don’t have time-limited offers like most other products in the industry do. industry, ”Mr. Allison mentioned. “We just don’t see this as a sustainable and efficient way to grow our business over time. So whatever we put on the menu, we have to believe that it has lasting power, and we don’t throw in anything that we don’t expect to stay there. “

New product launches at Domino’s go through a number of filters before reaching the testing phase. Mr. Allison stated that the filters meet three general criteria.

First and foremost, any new menu item should fit into the context of Domino’s branding around “baked pizza, baked goodness”.

“Despite the products we’ve introduced over time, 7 out of 8 orders still come with at least one pizza,” said Allison. “So a lot of what we’re releasing – which we’ve launched over time – is really complementary to this pizza experience. It is therefore important to stay within the Domino’s brand and the pizza halo.

Second, the new menu item must contribute to additional profitability at the store level. Mr Allison said Domino’s tests dozens of items every year, but if the company thinks the item is going to cannibalize the sale of pizza or other menu items and not generate additional profitability, then it won’t. will not be launched.

“We don’t care about the composition of items as a percentage of sales,” he said. “All that matters are dollar sales and increased dollar profits for the franchisee. “

The last essential criterion concerns operations. If the new menu item cannot be introduced without adding significant operational complexity to the stores, it will not be introduced. Mr. Allison said the efficiency of Domino’s production model and delivery model is too important to the success of the business to risk being disrupted by significant operational changes.

“These are really the three big groups of criteria that we put on each element,” he said. “And we have some things we’re excited about for 2020 and some news coming out later this summer. I can tell you that the team has been working hard to keep these product launches on track in a COVID-19 environment. But luckily, all of the test cooking and product formulation work had been done before we got into the pandemic. Still having challenges working with vendors to get the capacity and establish everything, but we’re following very well for an introduction to come later this summer.


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