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Daily news and analysis about the food tech revolution

Pizza Hut

Pizza Hut Sees Huge Runway for Growth in China, Plans to Add up to 1,500 Net New Stores by 2026 (Sponsored Post)

Pizza Hut is planning to rapidly expand its footprint across China in the coming three years as part of an ambitious growth strategy announced by Yum China Holdings Inc. (NYSE: YUMC; HKEX: 9987), at the company’s recent 2023 Investor Day in Xi’an, China.

Following its successful revitalization program, which strengthened the brand’s fundamentals and improved the payback period for new stores, Pizza Hut is poised for rapid growth. The brand is aiming to open 400-500 net new stores per year from 2024-2026, more than double its pace of the past three years, while continuing to maintain a healthy store payback of approximately 3 years.

Pizza Hut’s plans are part of the refreshed “RGM 2.0” strategy launched by Yum China, which also operates KFC, Taco Bell and other restaurant brands in the country. At its Investor Day, Yum China set an overall target to reach 20,000 total stores by 2026 and deliver double-digit CAGR for EPS in 2024-2026 while returning $3 billion to investors during the same period through quarterly dividends and share repurchases.

With a presence in China since 1990, Pizza Hut is a top player in China’s casual dining sector, operating 3,072 stores in over 650 cities. The brand dominates in all of its core categories: pizza, steak and pasta, with over 100 million pizzas and 20 million steaks sold over the last 12 months.

Pizza Hut General Manager Jeff Kuai commented, “As an absolute leader in the sector, our slice of the market is bigger than the next nine brands combined. Despite our leading position, there is still tremendous opportunity for us to gain an even larger share of the market.”

The brand’s strategy for footprint growth includes adding store density in existing cities while continuing to expand into new cities. China has vast untapped markets for Pizza Hut. There are more than 1,200 cities in China that have a KFC but do not yet have Pizza Hut, highlighting the opportunity to leverage Yum China’s infrastructure and resources to expand in many of those locations. Pizza Hut increases its penetration with flexible store models. Its satellite store model, which has a smaller dining area, focuses on off-premise occasions and requires lower capex. The store model has a 2-year payback, which is better than its traditional stores. The brand is also testing a fast-casual store model that aims to provide faster and lighter service while improving labor efficiency.

In addition to expanding its footprint, Pizza Hut has focused on improving its core menu offerings. In particular, the brand has been reinforcing its reputation as a “pizza expert” through product upgrades and new flavors. Its Super Supreme Pizzas and Durian Pizzas have been big hits with consumers. In the first half of 2023, pizza sales rose 56% compared to the same period in 2019.

As Pizza Hut continues to expand, it is aiming to capture more consumer segments through a wider range of food and beverage choices and providing more occasions to visit. The brand is preparing to launch a new line of made-to-order burgers. From September 2023, it also introduced premium Lavazza coffee at its restaurants. Pizza Hut has expanded individual meals, including its personal-size pizza, to cater to solo diners and office workers; as well as breakfast offerings to better serve customers while maximizing store utilization. In addition, the brand is broadening its previous focus on families to better cater to younger generations. Its partnership with Genshin Impact, for example, has attracted many young people and gamers.

Meanwhile, Pizza Hut remains focused on providing excellent value for money. Its popular “Scream Wednesdays”, “All You Can Eat”, and “Buy One Get One Free” value campaigns are huge draws for dine-in and delivery traffic. It is also broadening its price ranges to serve a wider range of customers on everyday needs.

Pizza Hut is also investing in building a best-in-class digital customer experience, an area that is critical to its future success, with approximately 92% of orders placed on digital channels. A key priority is improving its user interface and providing real-time order tracking for customers on its app. The brand is also boosting its member visit frequency through privilege programs and targeted offers based on members’ preferences.

Kuai says: “With continuing efforts to build on our core strengths and expand into new categories, improve value for money, drive delivery growth, and enhance our digital capabilities, we are confident that Pizza Hut will generate even stronger sales momentum and enhance our leading position in the market.”

This post is a sponsored post. See The Spoon’s advertising policy here.

Pizza Hut Launches a Fully Robotic Restaurant-in-a-Box (Video)

This month, Pizza Hut debuted a fully automated robot-powered restaurant.

The ‘restaurant-in-a-box’ is based on technology from Hyper-Robotics, an Israel-based food robotics startup that makes containerized restaurants.

The restaurant is operating out of the parking lot of Drorim Mall, a shopping mall located in the central Israel city of Bnei Dror. The restaurant is fully self-contained, doing everything from dropping toppings to baking and boxing. About the only thing it doesn’t do is make the dough, but according to Hyper its pizza restaurant can hold up to 240 types of dough in different sizes.

You can see the robot in action here:

When Hyper launched its robot pizza restaurant in November, it had a capacity of 50 pies per hour. It also had 30 warming cabinets, two robotic dispensing arms and dispensers for up to 12 toppings.

The customer initiates an order for a pizza directly from a touchscreen kiosk on the restaurant exterior or through the Pizza Hut app. After the pizza is made and boxed, a Pizza Hut employee takes the pizza from a dispensing tray and hands it to the customer. In future versions, the restaurant will be able to dispense the pizza directly to the customer.

That Hyper’s biggest named customer is also the biggest name is pizza shouldn’t be a surprise, in part because its founder, Udi Shamai, is also the president of Pizza Hut Israel. Shamai is a master franchisee that oversees 90 Pizza Huts across the country.

When I wrote our food robotics predictions last week, one of the trends I predicted for food robotics was the rise of the robot restaurants-in-a-box. It looks like Hyper and Pizza Hut didn’t waste any time getting the ball rolling on this trend.

Yum Brands to Reduce Greenhouse Gas Emissions by ‘Nearly 50%’ by 2030

Restaurant operator Yum Brands announced today its plans to cut greenhouse gases 46 percent by 2030 in partnership with its franchisees, suppliers and producers. The company, which operates Pizza Hut, KFC, Taco Bell, and the Habit Burger, also said today it plans to achieve net-zero emissions by 2050.

In a statement, Yum said it is “working closely” with its brands, franchisees, and suppliers on these goals, with a plan to focus on emission reductions at both corporate and franchise restaurants, as well as throughout its supply chain. 

Its restaurant brands have already kickstarted a few different initiatives that support its goal. Right now those include:

  • Investing in green buildings: KFC is investing in green buildings in Malaysia, South Africa, and the U.K., with “promising results.” For example, KFC reported 18 percent overall energy savings in Malaysia. 
  • Accelerating renewable energy: By the end of this year, Yum will transition 1,000 of its restaurants to renewable energy. The company has not yet specified which restaurants and where, though it has piloted renewable energy programs at KFC Australia in the past, and in 2020, it moved corporate offices in the U.S. to renewable energy.
  • Collaborating with climate-forward partners: Yum said it joined the Renewable Energy Buyers Alliance (REBA), an alliance of large energy buyers, energy providers and service providers this year. 

Yum is just the latest high-profile restaurant company publicizing its sustainability goals. Back at the start of 2020, Starbucks announced its own plan to cut carbon emissions, water usage, and landfill waste in half by 2030. (The company is also trialing a reusable cup program in Seattle.) Chipotle just diverted 51 percent of its waste, according to the company’s latest sustainability report. It’s also tying sustainability goals to some executive compensation. Dunkin’, meanwhile, introduced food waste and composting programs in March of this year.

The sheer reach of Yum’s restaurant brands — over 50,000 restaurants in more than 150 countries and territories — means its efforts could have significant influence on the restaurant industry as a whole as sustainability becomes a more urgent priority to address.

Podcast: The Future Grocery Store

While I may have missed my annual sojourn to sin city for CES this year, I may soon be able to get something akin to walking the Vegas strip just by heading on down to my local grocery store.

That’s because, at least according to The Spoon’s Chris Albrecht, grocery stores will soon resemble the floor of a casino with all the screens that will show up there in the future. Whether it’s smart carts with a touch screen or digital displays up and down the aisles, we can expect lots more digital signage and screens in our lives as shopping becomes more connected and digitized in the future.

And, as I say on this week’s editor podcast, I’m totally on board with more tech in the corner store as long as it includes bread-making robots filling up the aisles with the smell of fresh-baked loaves.

In addition to talking about smart grocery carts this week, we also discuss:

As always, you can check out the Food Tech Show on Spotify, Apple Podcasts or Soundcloud, or just click play below.

Dragontail Systems and Pizza Hut Deploy Pizza Delivery Drones in Israel

Restaurant tech company Dragontail Systems announced today that it has joined up with Pizza Hut for pizza delivery by drone in Israel.

To make this type of airborne delivery happen, Dragontail is integrating drones into its Algo Dispatching System, which uses AI to manage food preparation and delivery workflow. The delivery drones won’t be dropping pizzas off at people’s front doors, however. Rather, they will fly pizzas to remote designated landing zones where delivery drivers will pick them up for last mile of the delivery.

This remote drop-off hub approach is gaining traction with delivery companies around the world. IFood is using this model in Brazil, and here in the U.S., Uber is taking this approach with its drone delivery program.

There are actually good reasons to use this multi-step approach when delivering by drone. First, it simplifies the regulatory issues around flying commercial delivery drones because it reduces the number of flight paths that need to be created and cleared with appropriate government entities. Second, even if there is a last mile that needs to be driven, a drone still zooms overhead bypassing a lot of ground traffic on its way to customers for a speedy delivery. Finally, a remote hubg can keep delivery drivers closer to the delivery neighborhoods, rather than having them go back and forth to a restaurant.

Regardless of approach, the drone food delivery space is heating up. Walmart is using Flytrex for a groceries-by-drone delivery pilot in North Carolina. Rouses Market is testing deliveries in Alabama. In Ireland, Manna is making deliveries in around Dublin. And Google’s Wing has been making drone deliveries in Australia.

Drone delivery could become a much more viable option for restaurants and other food retailers here in the U.S., as the Federal Aviation Administration released its final safety and nighttime flying rules for commercial drone operators at the end of last year.

Food Tech News: Food Waste For Solar Energy, DoorDash Announces New Gifting Feature

Food waste used to produce solar energy

A recent winner of the Sustainability 2020 James Dyson Award, Carvey Maigue (a student at Mapúa University in the Philippines) created a technology that converts food waste into UV light-capturing windows and walls. The system, called AuReus, traps luminescent particles from certain fruits and vegetables (which would otherwise be wasted) in a resin substrate. The particles then absorb and reflect the light, and PV cells along the side of the walls and windows absorb this light. Lastly, the captured light is converted to DC electricity.

DoorDash announces new gifting feature

This week, DoorDash announced its new gifting feature for the holiday season. Users can now send favorite food items to friends and family located anywhere in the country through the app. To send a food gift, a user simply needs to enter the recipient’s address on the app, and then customize the order with a digital card. Not sure what to send? According to DoorDash, the most popular requests include french fries, burrito bowls, and cookies.

Ikea pledges to make 50% of menu items vegan

By 2025, Ikea’s goal is to make half of its menu items and 80 percent of its packaged meals vegan. The multinational chain already carries vegan items like meatballs, soft-serve, and hot dogs. After reading scientific reports and consumer research studies, the company aims to do its part in reducing global greenhouse gas emissions through providing foods with a lower carbon footprint.

UK Pizza Huts adds Christmas Pizza

Do you think that pineapple on a pizza is a weird topping? I personally think traditional Christmas dishes as pizza toppings might triumph over pineapple for being even stranger. Pizza Hut locations in the UK are now carrying a Christmas pizza, which includes shredded chicken, bacon, sage & onion stuffing, and a red wine gravy. The pizza is available now and until supplies last.

McDonald’s, Starbucks Join Contactless Delivery Efforts in China as Coronavirus Spreads

McDonald’s, Starbucks, and other quick-service restaurants (QSRs) are now implementing contactless delivery across China in the wake of the Coronavirus outbreak, according to Reuters.

Yum China brands Pizza Hut and KFC began using the delivery method earlier this month, along with third-party services Ele.me and Meituan. Now, McDonald’s and Starbucks are using a similar approach in order to keep workers safe and help prevent further spreading of the deadly outbreak.

Customers are encouraged to order remotely via restaurants’ mobile apps and websites. Orders are then sealed into bags and placed in a designated pickup spot, such as at the entrance of a customer’s building. Delivery drivers are required to carry ID cards that show they had their temperature taken and do not have a fever. 

Starbucks recommends customers order via the chain’s mobile app for pickup orders. Customers then wait outside a Starbucks location until they receive a pickup notice for their order, which will be placed on a table just inside the store. Any customer who enters a Starbucks must have their temperature taken at the door. Starbucks is also working with Ele.me for delivery orders. 

Some form of contactless delivery existed prior to the Coronavirus outbreak. However, much of China’s population is currently limited in terms of their own mobility and unable to return to work. Roughly 760 million people in China live in neighborhoods or villages currently under some level of lockdown. At least 150 million of them — about 10 percent of the population — face restrictions around how they can leave their actual homes. That makes contactless delivery one of the only ways in which they can procure food, whether it’s restaurant meals or grocery items.

According to Allison Malmsten, a marketing strategy analyst at Daxue Consulting who spoke to Reuters, the outbreak “redefines contactless food delivery.”

As lockdown continues, we’ll doubtless see more restaurants, grocery stores, and delivery services ramping up contactless delivery in the coming days and weeks.

KFC, Pizza Hut Test Contactless Delivery in Response to China’s Coronavirus

As China continues to grapple with the deadly coronavirus outbreak, some restaurant chains are taking steps to ensure food delivery operations can continue. Yum China, which operates thousands of KFC and Pizza Hut restaurants in China, is now using what it calls contactless delivery and pickup to safely get food from restaurants to customers without further spreading the deadly virus.

Yum posted videos to Chinese social media platforms Weibo and WeChat showing a delivery driver having their temperature taken, putting on a mask, and disinfecting their hands before heading out to make the delivery. Drivers are also required to disinfect both their hands and their delivery boxes after each delivery.

The food courier drops the order at pre-appointed spot outside the customer’s building then watches from a distance of at least 10 feet while the customer retrieves their order and goes back inside:

Yum China is also testing an in-store pickup version of this contactless delivery at some locations, where pickup racks have been installed inside. For both delivery and pickup, customers ordering via can now choose a “contactless” option when they order online. 

Chinese food delivery services Meituan and Ele.me are providing similar services. And it isn’t just restaurants peddling this contactless form of food delivery. Grocery stores — namely Alibaba’s Hema, JD affiliate Dada, and Meituan — are using contactless delivery for grocery orders, offering an in-app option for customers similar to that of Yum China. 

CNBC reports that as of last week in Beijing, roughly 20,000 people were delivering an average of over 400,000 orders daily from Meituan and Ele.me alone, but that the “logistical challenges,” such as couriers having to wait outside instead of delivering food directly to the customer’s door, have lowered the efficiency of delivery operations. However, the CDC points out that coronavirus getting spread from person to person usually happens “among close contacts (about 6 feet),” making the measures around contactless delivery necessary if food delivery is to continue.

Others are skipping the human element altogether and relying heavily on technology. A hotel in Hangzhou, China has been dispatching robots to deliver meals to quarantined guests.

Pizza Hut Partners With Zume and MorningStar to Put a Plant-based Pizza in a Round Box

Pizza Hut is following the footsteps of dozens of other major restaurant chains and joining the movement for plant-based meat. The Plano, TX-based company announced today that it has partnered with MorningStar Farms’ Incogmeato label to top one of its pies with plant-based sausage.

Dubbed the Garden Specialty Pizza, said pie will be available starting October 23 for $10 per pizza for a limited time at the 3602 E. Thomas Road Pizza Hut location in Phoenix, AZ, according to a press release sent to The Spoon. “Limited supply” in this context means until supplies last, which, given the current craze for plant-based meat products among consumers, could be mere hours.

For both companies, releasing a pizza topped with plant-based meat is a way to ride the coattails of the alt-meat craze. The partnership allows Pizza Hut to compete with the likes of Little Caesars, who tested a plant-based sausage pizza with Impossible earlier this year. For Kellogg-owned MorningStar, promoting its new plant-based brand via a major restaurant chain could help the company’s ongoing efforts to reinvent itself as an innovative alt-meat company on par with Beyond Meat and Impossible, rather than a decades-old peddler of first-generation meat alternatives.

A pie topped with plant-based meat isn’t the only pizza innovation that particular Phoenix Pizza Hut location will see. The Garden Specialty Pizza will be served up in a round box The Hut has developed with pizza-tech pioneer Zume, which recently acquired a company to manufacture its own line of more sustainable packaging.

For Pizza Hut, Zume designed a box that uses less packaging than its traditional square counterpart, takes up less space in a customer’s fridge, and, most importantly, keep the pizza hotter in transit. It’s also industrially compostable. Pizza Hut says once the limited run in Phoenix is over, it will look at ways to distribute the box more widely in future.

All proceeds from both initiatives will be donated to Arizona Forward, an organization that brings businesses and civic leaders together to develop sustainability goals for the state.

Pizza Hut Testing Brightloom’s Cubby Technology in Los Angeles

Pizza Hut announced in a statement this week that it is testing out Brightloom’s automated pickup cubbies at its Hollywood location. It’s the same technology currently used in chains like MAC’D and Chicago-based Wow Bao.

The point of Brightloom’s cubby system is to speed up service and give customers a way to order digitally then retrieve their food without every having to interact with a human being. Users can place an order via the Pizza Hut app or website, though Pizza Hut said in the statement they can still order via phone or in-person if they prefer.

Once at the restaurant, users find their designated cubby, which digitally displays their name on the door and is built with a special lining that keeps pizza hot and drinks cold. From there it’s just a matter of grabbing the pie and heading out.

The pilot kicked off yesterday. Pizza Hut says it plans to roll out more iterations of it in West Coast locations in 2020.

The pilot also follows the Brightloom announcement this week that the company formerly known as Eatsa has rebranded, raised $30 million, and is working with Starbucks to license the latter’s mobile order-pay-loyalty technology for its own system. Brightloom will in the near future license this newly revamped tech stack to restaurants.

Linking up with Brightloom is a smart move on Pizza Hut’s part. As my colleague Chris Albrecht said not long ago, “pizza continues to disrupt itself,” and there seems to be no end to national chains throwing new tech initiatives at the process of ordering, retrieving, and delivering pies to customers. Little Caesars’ Pizza Portal is similar to the Brightloom cubbies in that it’s a temperature-controlled, self-service pickup station that also allows users to order and pay digitally. Domino’s, meanwhile, has kept busy releasing everything from in-car ordering functionality to AI-powered scanners that check pizza quality.

But as we mentioned at the time of the Brightloom-Starbucks news, Starbucks is arguably the leader when it comes to mobile order, pay, and pickup technology, and combining it with Brightloom’s already-powerful end-to-end restaurant management platform could seriously raise standards around all restaurant technology. Pizza Hut hasn’t said if its subsequent cubby rollouts will include this new version of Brightloom’s platform, which will be unveiled in October. However, a relationship with Brightloom could help give Pizza Hut the competitive edge it needs when it comes to technology over the long term.

KFC Parent Company Ramps Up Sustainability Plans for China, Introduces Reusable Baskets

Yum China this week became the first restaurant company in mainland China to receive the International Sustainability and Carbon Certification (ISCC) label for converting its used cooking oil into sustainable biodiesel.

According to a press release, the company launched a pilot of its cooking oil project in 2018 in Chengdu, where all Yum China-owned KFC locations in the city converted their used cooking oil to biodiesel. For the project, Yum worked with biodiesel plants, oil storage sites, and waste collection companies.

For many quick-service restaurants, cooking oils are essential for business; they’re used for frying, grilling, and numerous other cooking tasks around the kitchen. In recent years, restaurants have shifted away from oils packed with trans fats to so-called “healthier” options like sunflower and soybean oil.

But even these healthier oils take their toll on the environment (and your insides, but that’s a story for another day). The EPA notes that cooking oils, whether from vegetable or animal sources, can “cause devastating effects” on the environment: they can suffocate plants and aquatic animals, clog up shorelines, catch fire, and destroy wildlife.

China is one of the world’s largest producers of waste oil, which is a huge environmental risk (to say nothing of the country’s gutter oil problem), but also a huge opportunity if more companies commit to helping turn it into sustainable fuel.

Yum China operates all mainland China locations of Taco Bell, KFC, and Pizza Hut, and owns the Little Sheep, East Dawning, and COFFii & JOY brands. Factoring in all these restaurants, that’s more than 8,600 restaurants across the country. In other words, there’s a lot of cooking oil to be recycled, and a company of Yum’s status could help set a standard for other restaurants across the country.

Recycled oil isn’t the only sustainability initiative Yum China has been up to of late. In the same press release, the company announced it had introduced reusable baskets to over 6,000 KFC locations across China.

The introduction of reusable baskets is in keeping with KFC plans here in the U.S., which include the chain converting to 100 percent renewable plastics by 2025. According to the press release, the move is expected to save more than 2,000 tons of paper per year and cut down the total amount of waste in Yum restaurants by 20 percent on average.

China, meanwhile, is turning itself into a hotbed of activity for foodtech solutions. VC firm Bits x Bites just launched an incubator in Shanghai that partners startups with major CPGs like Danone and Coca-Cola. Waste reductions, be it oils, plastics, or other materials, will no doubt play a role in some of those partnerships moving forward.

Food Tech News: Lyft Discounts Grocery Trips, (Plant) Life on Mars

Happy Saturday, all. Before you head off to kids’ soccer games or boozy brunches, catch up on this week’s food tech news roundup. We’ve got stories about Lyft discounting rides to help folks in food deserts have better access to fresh product, Pizza Hut trying out vegan cheese, and a new concept for a hydroponic farm on Mars.

Lyft offers discounted rides to grocery stores
Rideshare company Lyft is partnering with nonprofit Martha’s Table to launch a new initiative connecting people to fresh food (h/t Pymnts). Called the Grocery Access Program, Lyft will offer discounted rides to and from supermarkets to families living in two (undisclosed) neighborhoods in Washington, D.C. that don’t have ready access to grocery stores. Next up, the rideshare giant plans to roll out the program in more cities like Atlanta, Chicago, and Los Angeles.

Photo: Dartmouth.

Design for Martian Greenhouse wins NASA award
A team of Dartmouth students has won NASA’s 2019 BIG Idea Challenge with their design for a greenhouse that can grow food on Mars (h/t Futurism). The hydroponic dome, which is equipped with a tank of nutrient solution and LED lights, would be able to grow up to eight crops, including kale, sweet potato, soy, strawberry, and wheat. Students estimate that it could create enough food to feed four astronauts 3,100 calories per day over 600 days. Bonus: It could fit in a single 20,000 pound package.

Did we miss anything new? Tweet us @TheSpoonTech!