Dough Dynasty: The secret sauce of a pizza chain
The 1960's and 70's saw an era of post-war pizza proliferation. By 1965, both Little Caesars and Domino’s — two pizza chain giants from Michigan — had opened their doors, and were experimenting with expansion.
Little Caesars founders Mike and Marian Ilitch had the kind of partnership that allowed their business to grow and thrive. Where Mike was bold in testing new ideas, his wife Marian was mindful of the financial details.
“My father was very marketing-oriented,” Denise Ilitch, Mike and Marian’s daughter, said. “He was a genius at marketing and creativity, and my mother was extremely financially astute. And so together, they made a wonderful combination.”
After opening up the first Little Caesars in Garden City, the couple focused on expanding their business in Metro Detroit. Little Caesars quickly became known for offering fast, take-out pizza and 15-minute service.
Meanwhile, in Washtenaw County, Domino’s founder Tom Monaghan and his brother opened up three pizza shops, with a different niche in mind: quick and easy delivery.
“(The Monaghan brothers) knew students didn't have a lot of money and wanted quick, cheap food,” Carol Helstosky, author of Pizza: A Global History, said. “And if you think about it, that goes back to the origins of pizza in Naples as being quick, cheap, filling food, you know, food for the poor, food for the workers. ”
Both businesses soon found themselves in a brewing contest of expanding pizza places in a small geographic area. Throughout this era, both Ilitch and Monaghan developed ways to streamline pizza production.
Innovation #1: Supply chain systems
As each business continued to grow, their brands and products had to stay consistent across locations. Mike Ilitch’s strategy was to take control of the supply chain.
In the early days of the business, Denise Ilitch recalled, Little Caesars mushrooms came canned from China.
“And Dad did not want that, but no one was doing fresh mushrooms because that was a lot more expensive,” Denise said. “And so what he decided to do as a young entrepreneur is start a mushroom farm.”
Little Caesars Mushroom Farm eventually grew into a full-service supply company called Blue Line Foodservice Distribution. The company is still around — still in Michigan, based in Farmington, and still owned by Ilitch Holdings. But now, they supply food and packaging to companies all around the world, Little Caesars being just one of them.
Tom Monaghan took the supply chain strategy just one step further, developing a central commissary system that did all the food prep work and sent ingredients out to storefronts. The commissary that supplied those first three locations has since evolved into a massive operation that serves Domino’s franchisees all around the country.
“So how it works is the supply chain center driver comes into the store after the store has closed or before it opens, takes out all of the old inventory, refreshes with new inventory, locks up the store, and leaves, so that when the manager comes in, they're stocked and ready to go,” Jenny Fouracre, current senior director of communications at Domino’s, said.
And coordinating the modern commissary system isn’t as easy as some might think, said Dave Brandon, executive chairman and former CEO of Domino’s.
“Dough is a living, breathing product, right?” Brandon said. “It's driven by yeast, which is incredibly sensitive to time and temperature.”
So why would the company go through all the trouble? According to Brandon, Monaghan was “just obsessive” about creating a store format that was as efficient as possible for his growing business.
“And as these concepts grow and spread geographically... you can imagine a world where they read that mushrooms are on sale at Kroger... or they find a cheaper cheese," Brandon said. “Pretty soon you start to lose what is truly the definition of a brand, and that is the promise of consistency. So I think the genesis of the whole supply chain was really a function of quality control and consistency.”
Innovation #2: The conveyor belt oven
Rising demand called for faster production, and faster production called for a new and improved oven.
Keith Heim’s company, Big Guy Service and Repair, has been fixing the ovens of various pizza chain franchisees all across the state for the past 12 years. He knows all the ins and out of what is perhaps the most critical tool in any pizza kitchen. According to Heim, the conveyor belt oven, which is what you’ll find in most pizza chain kitchens today, changed the game.
“(The conveyor belt oven) is so much less labor-intensive,” he said. “You don’t have to stand there and hover (around) the oven. I mean, I did the same thing when I was 14. I made pizzas in a hot room, a hot oven, constantly spinning them and maintaining. If you walk away — 'ope, that’s burnt!"
Some claim that Mike Ilitch is the inventor of the conveyor belt oven. Denise Ilitch noted that her father “was a pioneer in creating a conveyor oven,” but not necessarily the original inventor.
Mike Ilitch actually does have two U.S. patents to his name, but each is for a different model of a carryout food tray. Little Caesar Enterprises itself has been assigned dozens of patents, including plans for a Little Caesars-themed jungle gym and a pizza-breadstick combo product.
But no sign of a conveyor oven patent.
Another Michigander, John Correll, claims that his pizzeria — a place called Pizzuti’s in Westland — first started using a conveyor oven in 1976. That’s one year before others claim Mike Ilitch invented the oven. However, we had trouble confirming this independently.
Regardless of the originator, Ilitch certainly ushered the oven into wider circulation, and used it to expand his business with ease.
Innovation #3: The pizza box
“You have to care about the box,” Fouracre said.
According to Fouracre, Domino’s proudly embraces the fact that their founder pioneered the use of a corrugated cardboard box, rather than the flimsier paperboard box typically used to store baked goods.
“I think that's part of the core of our history is that, you know, Mr. Monaghan... was very focused on operations and everything that went into making the best store and the best pizza experience,” Fouracre said. “But those boxes were something that he focused on and worked on with our box manufacturer.”
Scott Weiner, author of Viva La Pizza! The Art of the Pizza Box, literally wrote the book on the history of pizza boxes. The corrugated cardboard box, Weiner said, was yet another example of Monaghan’s obsession with efficiency. The box had to look good, stack neatly in the store, and retain heat while in transit for delivery.
“(Monaghan) wasn't so concerned about the pizza itself,” Weiner said. “He was more concerned about how it got to the customer, which is why Domino's became famous as its delivery brand... They weren't the first to deliver a pizza, not by far, but they revolutionized the way that delivery works. And they're still doing that.”
National and global expansion
One thing that made it possible for these chains to expand nationally was the growing craze over American fast food. McDonald’s, KFC, Burger King, and other chains of the 1950s set a standard of affordability, consistency, and convenience. And for Mike Ilitch, franchising was a convenient and appealing business model.
“Dad said that he was flying on an airplane and he was sitting next to an oilman from Texas,” Denise Ilitch said. “And they struck up a conversation and he started talking about royalties and how lucrative and profitable royalties are in the oil business. And that really piqued his interest in franchising.”
From Metro Detroit, Little Caesars began franchising along the I-75 corridor, from Michigan to Florida. From there, they expanded to the coasts.
Meanwhile, Domino’s franchised in the Midwest, and then the East Coast, focusing first on areas with college campuses, and then military bases. As they grew, the company employed a marketing strategy known as “glocalization.”
“When Domino's, for example, expands into the Northeast, they understand that people there like thin crust pizza,” Helstosky said. “So they offer that in addition to their standard pizza. And that kind of becomes the Domino's model, where if they're moving into an area, they'll stand back and observe and say, ‘Okay, what are local ingredients that people might like?’”
Little Caesars officially became an international company in 1969 by opening a location in Canada. Domino’s earned international status in 1983, also via a Canadian franchise.
But these two were hardly the only pizza chains sweeping the country. Pizza Hut, Hungry Howie’s, and Jet’s Pizza were all founded in the same 20-year span. Papa John’s, a straggler, but still a major player, was founded in 1984.
Each business brought something new to the pizza chain landscape. But the industry contributions made by Domino’s and Little Caesars — some of the earliest players in the game — made it possible for all chains to deliver better, hotter, faster pies to the people.