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Privately-held MOD Pizza was founded in 2007, and has since become an emerging fast casual pizza concept with more than 65 stores open. Personal pizzas are sold for approximately $7.50, and served 5 to 7 minutes after ordered.
Citi recently hosted a follow-up call with Co-Founder and CEO Scott Svenson and analysts led by Gregory R Badishkanian highlight that, similar to Chipotle Mexican Grill, Inc. (NYSE: CMG), “MOD has expressed a commitment to creating a positive employee culture,” and note that Chiptole’s management “has frequently cited their culture as a crucial element of Chipotle’s success.”
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Competitive Landscape
The MOD Pizza concept competes with Chiptole’s Pizza Locale and with Buffalo Wild Wings (NASDAQ: BWLD)PizzaRev in the fast casual pizza segment. In recent conversation with industry participants, Citi analysts have learnt that many of them think “fast casual pizza is next ‘big thing’ in the restaurant space.”
Consequently, both public and private companies have been investing considerable sums of money in this segment, “and while a large number of competitors [like Blaze, Pie Five, Pizza Studio, Pieology, 800 Degrees, and Uncle Maddio’s] have entered the market, the race to build national scale is ongoing,” the note adds.
While seeing one player dominating the market seems unlikely, MOD’s management has pointed out that “Chipotle’s involvement could enable Pizza Locale [still a small competitor] to benefit from a ‘halo effect’ when the concept enters new markets.”
The experts at Citi believe the wide appeal of fast casual pizza seems to provide a unique position for these concepts in the marketplace, taking share from other concepts. They note that the key for Chipotle and Buffalo Wild Wings will be “finding the proper mix of quality ingredients and speed of service to drive profitability, along with being able to successfully expand into new markets.”
MOD’s Growth
MOD’s store base expanded from 31 at the beginning of the year to a current number of 67 restaurants. Management has guided for 95 to 100 stores by the end of 2015, and about 200 by the end of 2016. The report explains that, “Given MOD’s unit economics and trends, the company has mainly pursued a company-owned expansion strategy.” The company has said that its typical store averages 2,450 square feet store and a $1.2 million AUV.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.