History of Pizza Hut

History of Pizza Hut The history of Pizza hut began in 1958, when what is now the world's largest pizza franchise was born. Pizza Hut is the world's largest pizza restaurant chain and is a subsidiary of Yum! Brands, Inc., whose restaurants total approximately 34,000 restaurants.

The whole history of pizza hut has been achieved through innovation, but the history of pizza hut really took off with amalgamation into the Pepsi Company and more aggressive marketing techniques especially in the take out market. It was founded in 1958 by Dan and Frank Carney. Their friend suggested opening a pizza parlor they agreed with the idea that it could prove successful, so that they borrowed $600 form their mother to start a business. At that time the original Pizza hut was at Wichita State University with 25 seats. When making the sign for the restaurant they only had enough room for nine letters and because they made pizza's they wanted pizza in the name, that only left 3 letters and because the restaurant looked like a hut they named it Pizza Hut.

Their first franchise was opened in 1959 in Topeka, Kansas. In 1977, Pizza Hut was acquired by Pepsico. On April 1, 2008, Pizza Hut sent emails to customers advertising that they now offer pasta items on their menu. The email (and similar advertising on the company's website) stated "Pasta so good we've changed our name to 'Pasta Hut'." History of Pizza Hut
2.

Address: 9111 East Douglas Wichita, Kansas 67027 U.S.A. Telephone: (316) 681-9000 Fax: (316) 681-9869

Statistics: Wholly Owned Subsidiary of PepsiCo, Inc. Incorporated: 1959 Employees: 140,000 Sales: $5.1 billion (1996) SICs: 5812 Eating Places; 6794 Patent Owners & Lessors

Company History:

Pizza Hut Inc. is the largest pizza restaurant company in the world in terms of both the number of outlets and the percentage of market share that it holds. A subsidiary of PepsiCo, Inc., the company oversees more than 11,000 pizza restaurants and delivery outlets in 90 countries worldwide. In October 1997, the company expected to become a subsidiary of Tricon Global Restaurants, Inc., formed from the spin-off of PepsiCo's restaurant holdings. Early History Pizza Hut was founded in 1958 by brothers Dan and Frank Carney in their hometown of Wichita, Kansas. When a friend suggested opening a pizza parlor--then a rarity--they agreed that the idea could prove successful, and they borrowed $600 from their mother to start a business with partner John Bender. Renting a small building at 503 South Bluff in downtown Wichita and purchasing secondhand equipment to make pizzas, the Carneys and Bender opened the first Pizza Hut restaurant; on opening night, they gave pizza away to encourage community interest. A year later, in 1959, Pizza Hut was incorporated in Kansas, and Dick Hassur opened the first franchise unit in Topeka, Kansas. In the early 1960s Pizza Hut grew on the strength of aggressive marketing of the pizza restaurant idea. In 1962, the Carney brothers bought out the interest held by Bender, and Robert Chisholm joined the company as treasurer. In 1966, when the number of Pizza Hut franchise units had grown to 145, a home office was established to coordinate the businesses from Wichita. Two years later, the first Pizza Hut franchise was opened in Canada. This was followed by the establishment of the International Pizza Hut Franchise Holders Association (IPHFHA). It aimed at acquiring 40 percent of the company's franchise operations, or 120 stores, and adding them to the six outlets wholly owned by Pizza Hut. The acquisitions, however, brought turmoil to the chain. Varied accounting systems used by the previous franchise owners had to be merged into one operating system, a process that took eight months to complete. In the meantime, sales flattened and profits tumbled. Turmoil Brings New Structure in Early 1970s In early 1970 Frank Carney decided that the company practice of relying on statistics from its annual report to inform its business strategy was inadequate, and that a more developed, longterm business plan was necessary. The turning point occurred when Pizza Hut went public and began growing at an unprecedented pace. Carney said in 1972, "We about lost control of the operations. Then we figured out that we had to learn how to plan." Pizza Hut's corporate strategy, arrived at after much consultation and boardroom debate, emerged in 1972. Carney would later remark that the process of introducing a management structure did much to convince PepsiCo, Inc., that the pizza chain was worthy of purchase. The corporate strategy's first priority was increasing sales and profits for the chain. Continuing to build a strong financial base for the company to provide adequate financing for growth was the

second priority. The strategy also called for adding new restaurants to the chain in emerging and growing markets. In 1970 Pizza Hut opened units in Munich, Germany, and Sydney, Australia. That same year, the chain's 500th restaurant opened, in Nashville, Tennessee. Further acquisitions that year included an 80 percent stake in Ready Italy, a frozen crust maker, and a joint venture, Sunflower Food Processors, formed with Sunflower Beef, Inc. The same year, the menus for all restaurants added sandwiches to the staple "Thin 'n Crispy" pizza offering. In 1971 Pizza Hut became the world's largest pizza chain, according to sales and number of restaurants--then just more than 1,000 in all. A year later the chain gained a listing on the New York Stock Exchange. Pizza Hut also achieved, for the first time, a one million dollar sales week in the U.S. market. At the end of 1972 Pizza Hut made its long-anticipated offer of 410,000 shares of common stock to the public. The company expanded by purchasing three restaurant divisions: Taco Kid, Next Door, and the Flaming Steer. In addition, Pizza Hut acquired Franchise Services, Inc., a restaurant supply company, and J & G Food Company, Inc., a food and supplies distributor. The company also added a second distribution center in Peoria, Illinois. In 1973 Pizza Hut expanded further by opening outlets in Japan and Great Britain. Three years later the chain had more than 100 restaurants outside the United States and two thousand units in its franchise network. The company's 2,000th restaurant was opened in Independence, Missouri. It also established the 35 by 65 meter red-roof Pizza Hut restaurant building as the regulation size for all its new establishments. The new construction standard called for free-standing buildings built in a distinctive one-story brick design. The sites seated from 60 to 120 people. Advertising played an increasingly influential role at Pizza Hut at this time, broadening the chain's public profile. Campaigns were run on both a national and local level in the U.S. market. Spending on local advertising increased from $942,000 in 1972 to $3.17 million in 1974. PepsiCo Buys Out Company in 1977 In 1977 Pizza Hut merged with PepsiCo, becoming a division of the global soft drink and food conglomerate. Sales that year reached $436 million, and a new $10 million dollar headquarters office opened in Wichita. PepsiCo had clearly seen potential in Pizza Hut. People continued to eat outside their homes, especially as convenience and price-competitiveness in the fast food industry gained importance. The 1980s brought new competitors to Pizza Hut, all challenging its number one position in the pizza restaurant trade, then worth $15 billion in sales annually in the United States alone. While in the 1970s the company's main competitors had been regional chains like Dallas-based Pizza Inn, Denver-based Shakey's, and Phoenix-based Village Inn and Straw Hat, fierce competition in the 1980s brought new entrants into the quick-service pizza category, including Little Caesar's, Domino's Pizza International, and Pizza Express.

To raise its profile, Pizza Hut introduced "Pan Pizza" in 1980 throughout its network. The product, with a thicker crust made in deep pans, soon became popular. The success of new additions to Pizza Hut's menu was facilitated by the marketing resources provided by PepsiCo. For example, in 1983 Pizza Hut introduced "Personal Pan Pizza," offering customers a fiveminute guarantee that their single-serving pizzas would arrive quickly and steaming hot. The aim was to make a quick, affordable pizza the ideal lunchtime meal. Another addition to the chain's menu was "Hand-Tossed Traditional Pizza," which would be introduced in 1988. Strong Growth in Late 1980s and Early 1990s In 1984 Steven Reinemund was appointed president and chief executive officer of Pizza Hut. He oversaw a period of unprecedented growth for the pizza chain. In 1986 Pizza Hut opened its 5,000th franchise unit, in Dallas, Texas, and began its successful home delivery service. By the 1990s the delivery and carryout business had grown to account for approximately 25 percent of the company's total sales. In 1990 Pizza Hut opened its first restaurant in Moscow. Russians' pizza of choice, "Moskva," a pie topped with sardines, tuna, mackerel, salmon, and onion, became a favorite at the Moscow Pizza Hut. The Moscow location quickly established itself as Pizza Hut's highest volume unit in the world. Restaurants just behind in total volume served were found in France, Hong Kong, Finland, and Britain. Other favorite toppings for pizzas in countries other than the United States included sauerkraut and onion, and spinach, ham, and onion. In Hong Kong corned beef and Canadian bacon were favorites, while Asians and Australians seemed to enjoy various curry pizzas. Competition in the United States was heightened in 1991 when McDonald's, the world's largest hamburger fast food chain, put "McPizza" on its menu in several test markets and even offered home delivery to customers. Despite this effort and the economic recession of the early 1990s, Pizza Hut continued to profit. Company sales at the pizza chain were up ten percent worldwide to $5.3 billion in 1991 as growing health awareness and the popularity of vegetarian lifestyles had prompted many people to reconsider pizza as a nutritious alternative to greasy fast food fare. Pizza Hut Delivery, the home delivery operation, provided $1.2 billion in sales alone, and overall Pizza Hut sales, added to those of PepsiCo subsidiaries Taco Bell and KFC (formerly Kentucky Fried Chicken), gave the parent company more than $21 billion in sales that year on its restaurant and fast food side. In the early 1990s Pizza Hut was concerned with making itself more accessible. Drive-through units were added for customers' convenience, and Pizza Hut Express units were being developed. The Express unit originated in shopping malls, where it provided customers with fast food at affordable prices made possible by lower operating overheads. Since that time, Pizza Hut positioned Express units in school cafeterias, sports arenas, office buildings, and major airports. The company saw nontraditional locations as the fastest-growing sector of its operations in the first half of the 1990s.

PepsiCo's corporate sponsorship of Pizza Hut included funding the Book It! National Reading Incentive Program, which encouraged higher literacy rates among young people. The reward for better reading ability was free pizza at any Pizza Hut. In 1992, the Book It! program involved more than 17 million students in North America alone, and Pizza Hut received letters of endorsement that year from President George Bush and Secretary of Education Lamar Alexander. PepsiCo took advantage of global change following the end of the Cold War, expanding Pizza Hut into new and emerging markets. In 1991 PepsiCo had restaurant outlets in 80 countries worldwide. Wayne Calloway, chairman of PepsiCo, indicated he wished to see continued growth with the approach of the 21st century. He commented, "The major question for international restaurant growth is, 'How fast can we get there?' A steadily growing interest in eating away from home and the continued gravitation to convenience foods are creating an atmosphere of excitement for our restaurants." Pizza Hut restaurants had spread to 90 countries by 1997. Declining Profits in Mid-1990s In 1994 several changes resulted in the company's first decline in operating profits in 15 years. The pizza market was no longer growing; fast food rivals cut prices; and investment in new outlets was draining corporate resources. PepsiCo's restaurant division saw sales in restaurants open at least one year fall six percent in 1994, contributing to a drop in profits of 21 percent (to $295 million). In an effort to change this disturbing direction, Roger A. Enrico moved from PepsiCo's beverage and snack food divisions to head the restaurant division in 1994. His first move was to heavily promote a new product: stuffed crust pizza, a pizza with a ring of mozzarella folded into the outer edge of the crust. The company used a massive advertising campaign to promote the new product, including television commercials that paired celebrities eating their pizzas crust first. Some indicators were promising: market share rose from 25.6 to 27 percent; 1995 sales increased 16 percent to $5.2 billion; and operating income rose to $414 million, up 40 percent from the year before. In 1996 Pizza Hut planned to introduce a major new product each year and two or three line extensions. The following year it followed through on this course, introducing Totally New Pizzas with 67 percent more toppings than previous pizzas and thicker sauce. The company allocated $50 million for the project, part of which was to be used to install new or improved ovens. In 1996 Pizza Hut accounted for 17 percent of PepsiCo's total sales and 13 percent of its operating profit. However, these gains could not offset the drain that capital investment placed on PepsiCo's other divisions. The parent company's return on assets was significantly greater in its beverage and snack food divisions than in its restaurant division. In the late 1990s, PepsiCo drew together its restaurant businesses, including Pizza Hut, Taco Bell, and KFC. All operations were now overseen by a single senior manager, and most back office operations, including payroll, data processing, and accounts payable, were combined. In January 1997 the company announced plans to spin off this restaurant division, creating an independent publicly traded company called Tricon Global Restaurants, Inc. The formal plan, approved by the PepsiCo board of directors in

August 1997, stipulated that each PepsiCo shareholder would receive one share of Tricon stock for every ten shares of PepsiCo stock owned. The plan also required Tricon to pay a one-time distribution of $4.5 billion at the time of the spinoff. If approved by the Securities and Exchange Commission, the spinoff would take place on October 6, 1997. Enrico, who had risen to the position of PepsiCo CEO, explained the move: "Our goal in taking these steps is to dramatically sharpen PepsiCo's focus. Our restaurant business has tremendous financial strength and a very bright future. However, given the distinctly different dynamics of restaurants and packaged goods, we believe all our businesses can better flourish with two separate and distinct managements and corporate structures."
3.

Pizza Hut Becomes First Company In History To Deliver Pizza To Residents Living In Outer Space
y y

Source: Pizza Hut Posted Monday, May 21, 2001

Landmark "Space Race'' Delivery Made To International Space Station Pioneers Adding another chapter to the decades-old "space race" chronicles, Pizza Hut has become the first company in history to deliver pizza straight to the pioneers living in outer space on the International Space Station (ISS). The creation and delivery of the world's first spaceconsumable pizza was the culmination of nearly a year of collaboration between Pizza Hut and Russian food scientists. After months of rigorous testing, the Pizza Hut pizza made the landmark, trans-atmospheric journey to become the only pizza ever delivered to and eaten by people living in space. "Pizza Hut is known for quality, innovation and category leadership. Having recorded numerous 'firsts' on Earth, we also wanted to make history by becoming the first company in the world to deliver pizza to space," said Randy Gier, chief marketing officer, Pizza Hut, Inc. "From this day forward, Pizza Hut pizza will go down in history as the world's first pizza to be delivered to and eaten in space." The "space" Pizza Hut pizza delivered to the ISS featured traditional ingredients including a crispy crust, pizza sauce and cheese, but was topped with salami to enhance the pizza's flavor because researchers found that pepperoni did not withstand the 60-day testing process. In addition, the Pizza Hut space pizza was made six inches in diameter - the size of the Pizza Hut Personal Pan Pizza - in order to fit into the smaller-sized oven aboard the ISS. Before final certification for consumption was given, the vacuum-sealed Pizza Hut pizza had to undergo rigorous stabilized thermal conditions to determine freshness-stay and life span.

"As a leader in the pizza delivery business, we're determined to give customers what they want, when they want it and where they want it, even if they are in space. Wherever there is life, there will be Pizza Hut pizza," said Gier. "After checking and re-checking the address, we made a few minor route adjustments to ensure that the pizza would successfully make it to the ISS. If space tourism is going to be a reality, Pizza Hut pizza will make the trip even better." Consumers can log onto www.pizzahut.com to view photographs of the cosmonauts eating Pizza Hut pizza inside the ISS and photographs of the pizza being developed in the kitchens of the Russian space program's headquarters in Kazakhstan. In July 2000, the race for space commercialization began as Pizza Hut became the first company in history to place its logo on the world's largest proton rocket. The innovative space sponsorship campaign was part of the company's dramatic turnaround and re-imaging campaign, which includes a more than $500 million investment over five years to make contemporary and upgrade Pizza Hut units around the globe. Pizza Hut, a division of Tricon Global Restaurants, Inc., is the world's largest pizza restaurant company with more than 8,000 units in the United States and nearly 4,000 units in 90 countries. The company is the recognized leader in the $25 billion pizza category. Those hungry for more information can go to the Pizza Hut web site at www.pizzahut.com.
4.

Strengths
Pizza Hut is an international franchise and restaurant chain having presence in many countries and is originally based in Texas, USA. The company specializes in the American-style pizza that till to date no other pizza restaurant has been able to compete. The company also offer many other food items and side dishes like breadsticks, wings, garlic bread etc. Pizza Hut is one of the largest restaurant chains in the world and is a sub brand of Yum! Brands, Inc. The Pizza Hut owns and runs about 34,000 restaurants, provides home delivery services and also has kiosks in more than hundred countries. Pizza Hut with a large market share and a strong network has become a market leader in United Kingdom. The restaurants offer a large variety and types of pizzas under one roof and is known for its innovative pizzas. The marketing of the company is another strength of the company. The have many media partners and use television advertising that attracts people of various ages. The company has a huge market share; more customers mean higher percentage in sales that leads to greater profits. Pizza Hut faces very low competition. The company has some strong competitors like dominos pizza, but Pizza Hut has an advantage because of its strong network, restaurant outlets and

delivery service. The company has well differentiated its products and has a large loyal customer base.

Weaknesses
The loyal customers of Pizza hut feel that there is a decline in satisfaction and other pizza chains and restaurants are offering much more. There are some internal conflicts within the company as there processes are computerized and centralized. This has lead to high turnover as well as de-motivation of staff.

Opportunities
The company can come up with innovative Pizzas, new flavors and recipes with different types of crusts and sizes etc. The company can open its restaurants in different countries that have potential customers for example it can expand its network in India, Pakistan, Bangladesh etc. The company can even introduce new, healthy and fresh food items related to pizza for example they can introduce fresh pizzas. The people are these days more concerned about their health and pizza hut can meet this need by introducing fresh and healthy pizzas.

Threats
The competition in the Pizza industry is increasing, as customers now prefer and look for availability and affordability. The rising prices of special ingredients like cheese, used in pizzas. The company faces serious threats from other international restaurant chains like KFC, McDonalds, Dominos pizza etc. McDonalds even tried to introduce pizza in its product portfolio called McPizza. Besides these competitors the local restaurants that provide pizzas offer food item at more affordable prices as well as know the taste of the local people better. Many of its competitors are trying to capture the market share of the Pizza hut by introducing similar kind of pizzas and food items.