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00:02It's a $150 billion a year global industry, with over 350 slices eaten in America every second.
00:12Pizza is both an artisanal art form and a crowd-pleasing delicacy loved the world over.
00:18But it wouldn't be possible without an epic three-way race.
00:23Pizza Hut, Little Caesars, and Domino's changed the pizza game.
00:27To become the largest pizza chain on the planet.
00:30The reason that we even know pizza in this country is because of the big chains.
00:35When a new upstart, Little Caesars, challenges the reigning titans.
00:39We're better than Domino's and Pizza Hut.
00:42This is the beginning of the pizza war.
00:44They'll each have to think outside the box.
00:47The pan pizza.
00:49It was like pizza on steroids.
00:51By reinventing pizza, it's like a mutant pizza creation as we know it.
00:56He took leftover product and turned it into something else.
01:00Why don't you try an order of our new crazy crust?
01:02It's really a stroke of genius.
01:05And before the war is over.
01:07Pizza Hut isn't your company anymore.
01:09One bold decision.
01:10He's switching to a rival company.
01:12Will upend the entire industry.
01:15And it changes the landscape of pizza forever.
01:20Papa John's.
01:21And all of a sudden it goes from Domino's and Pizza Hut to the big four.
01:49In 1979, the burgeoning pizza industry has become one of the fastest growing markets in the U.S. food industry.
01:57At this time, there's thousands of pizzerias in the United States.
02:02Many of them are mom and pops in major cities.
02:05Yet none of them offer much in the way of variety.
02:09It's not what you imagine today.
02:11It's a couple of sizes and that's it.
02:13It's a thin crust.
02:14It's got cheese.
02:16It's got sauce.
02:17You didn't walk in to a pizzeria and have fancy pizza toppings thrown in your face.
02:22Nobody put pineapple on a pizza.
02:25There were no breadsticks, no wings, no crazy bread, no dessert sticks.
02:29There was none of that.
02:31But there's this growing collection of chain pizzerias centralizing in the Midwest who introduce pizza to the masses.
02:39Among these Midwestern chains are the leader in pizza delivery, Domino's, and the overall industry leader, Pizza Hut.
02:49Where the co-founder and current president, Frank Carney, has recently sold his 21-year-old company to PepsiCo for
02:57over $300 million.
02:59By 1979, Pizza Hut had undergone this huge transformation to suddenly a massive nationwide business.
03:12Which means Frank Carney is now beholden to a board, to shareholders, and to PepsiCo as a whole.
03:19So he is no longer the big cheese, he is an employee.
03:23So now he's in the hot seat as they're expecting results.
03:27Frank, we do need something.
03:30In the two years since the sale to PepsiCo, Pizza Hut sales were slipping, so they had to do something
03:35to shake up the business.
03:37Have you thought of adding delivery service like Domino's?
03:40Yeah, we tried that once, years ago, but trust me, the headache is not worth it.
03:47Unlike Domino's, Frank Carney wanted to keep Pizza Hut, a sedentary restaurant dining experience, and not focus on delivery.
03:55That was a no-go for him.
03:56And perhaps a two-for-one deal like Little Caesars.
04:01Little Caesars.
04:03At this point, he's laser-focused on beating Domino's.
04:08He's not remotely concerned about this little weird upstart chain, Little Caesars.
04:14But this regional pizza chain has just hit the airwaves with their first national ad campaign.
04:22Only Little Caesars has the famous Pizza Pizza.
04:25Pizza Pizza.
04:26And it's about to transform a two-horse race into a three-way battle for supremacy.
04:32Pizza Pizza.
04:33It means never having to say you're hungry.
04:35But before Little Caesars enters the big time, it all started 20 years earlier, when just outside of Detroit, a
04:45former baseball player is chasing a new dream.
04:49Mike Illich was a minor league baseball player for the Detroit Tigers.
04:53And when he sustained a career-ending knee injury, his major league dreams go up in smoke.
05:00He had to have surgery.
05:02The Tigers were interested in keeping him around.
05:05So now here he is, 29 years old.
05:07He's got a wife, Marion, and now three children to support.
05:13Desperate to make ends meet, Illich is going all in on an unproven concept.
05:18When he finished his baseball career, he had a short period where he ran a kitchen at a local bar
05:25where he grew to love making pizza.
05:28He actually taught himself how to bake it.
05:32Illich believes pizza has the potential of being the next big thing up there with hamburgers and hot dogs.
05:37So he said, I love this. I want to make this my mission in life to create it.
05:43So he and Marion took their life savings and opened a little pizzeria in Garden City.
05:50And it starts with a name.
05:58Pizza Treats.
06:00Yeah, what, you don't like it?
06:06One day their small pizzeria will grow to over 5,000 locations around the world.
06:12Generate over $4 billion a year.
06:15And sell roughly 1 million pizzas every single day.
06:20But first, they need to agree on what to call it.
06:24His wife, Marion, wants to incorporate her little nickname for him.
06:28He's a take charge kind of guy.
06:29And he's a short king at 5'9".
06:31So she likes to call him affectionately...
06:38Little Caesar.
06:40Little Caesar's Pizza Treat?
06:43Pizza Treat or Little Caesar's Pizza Treat.
06:47Neither name is very ideal.
06:51On May 8, 1959, Little Caesar's Pizza Treat opens its doors.
06:57It was Marion at the register.
07:00Mike at the oven making pizza.
07:02It was handmade with the best quality ingredients and soft, fluffy dough.
07:08But the vast majority of Americans had never tried pizza.
07:12There was only one Pizza Hut and Domino's hadn't even been invented yet.
07:15Hedging their bets, Mike also includes more familiar items on the menu.
07:20They didn't just serve pizzas.
07:22They had chicken, fish and chips.
07:24So there's something for everybody.
07:26Little Caesar's Pizza Treat.
07:28Your name?
07:30Another medium pepperoni.
07:31Got it.
07:32To save money, Illich does something no other pizzeria is doing.
07:37How can I help you?
07:38Can I get a table?
07:41Sorry, we're take out only.
07:43In the 1950s, fast food restaurants like McDonald's had takeout.
07:48But they also had dining areas where people can sit down to eat food.
07:53The concept of a takeout only restaurant was basically unheard of.
07:58But his belief was, I need to keep overhead low.
08:02And one huge cost is table service.
08:05Tell you what, first order's on us.
08:07So just take the pie with you and enjoy the home.
08:10Forget it.
08:18Ilyich's cost saving measures lead to sluggish sales.
08:22And by early 1960, he's so desperate for a lifeline.
08:27The margins are really tight.
08:30He seeks advice from a total stranger.
08:33Mike was incredibly gregarious.
08:35He could strike up conversations anywhere.
08:38And one day, he starts a conversation with a completely random individual about his restaurant.
08:45You'll never get rich running a pizza shop.
08:48You need several.
08:49I can barely afford one.
08:51You expect me to open several?
08:54It's called franchising.
08:57The franchising model works by a company leasing out its name, image, and know-how to a franchisee in exchange
09:03for royalties and fees for marketing.
09:05So by franchising, he realizes he can grow a brand and get paid while doing it.
09:14We're gonna give people good value.
09:16Okay, lots of cheese, lots of pepperoni.
09:18So his business model doesn't just remain selling pizzas.
09:22It's selling franchises.
09:24Now you're learning.
09:25In 1962, Mike Ilyich becomes the first person in Michigan to start a franchise food chain.
09:33It's kind of amazing that Little Caesars might never have been a chain if a random stranger hadn't put that
09:39idea in Mike Ilyich's head.
09:41And by 1963, there are eight locations throughout the state.
09:46Pizza quickly became the restaurant's bestseller.
09:49And as that happens, it becomes the hip, cool food, especially for the youth culture.
09:54So they removed fish and chips and chicken from the menu.
09:58And they started serving just pizza.
10:02With the menu streamlined, Ilyich takes things one step further.
10:07Once he had narrowed that focus, Mike changed the name from Little Caesars Pizza Treat, which is a mouthful to
10:13say, to just Little Caesars.
10:16With an eye toward going national, Ilyich goes all in on franchising.
10:21Increasing the number of locations in Michigan and the neighboring states to over 150 by the end of the 1970s.
10:29But with Domino's and Pizza Hut growing to roughly 300 and 3,000 locations respectively, Ilyich is desperately trying to
10:39catch up.
10:43Little Caesars, what can I get you?
10:45Mike Ilyich is still a fledgling pizza restaurateur with the idea of having a nationwide chain.
10:50And he realizes that just having takeout is not enough.
10:54Of course our pizza's good. We're better than Domino's and Pizza Hut.
10:58But he needs to find an angle.
11:00Something that the big guys are not yet doing and a way to garner his own market share.
11:06Why don't you come see for yourself? First order's on us.
11:11Great, I'll see you soon then.
11:16Who gives away whole pizzas for free?
11:21When Mike Ilyich is put into a position of competition, his immediate reaction is to always be better, be bigger,
11:30be bolder.
11:34And the light bulb goes off.
11:37And he says, to beat the competition, I'm going to offer a promotion the likes of which no pizza chain
11:44has ever done.
11:45Buy one pizza, get one free.
11:49This is a massive gamble.
11:56In 1979, Mike Ilyich is determined to turn Little Caesars into a national chain.
12:03So he meets with an ad agency to pitch his unprecedented idea.
12:08You want to give away an entire pizza.
12:10With every order?
12:12Exactly.
12:14Usually you buy one, get one free soda.
12:16Something that has easy profit margins to deal with.
12:19But this is your main product.
12:20You're offering a second one for free.
12:23It's ridiculous.
12:25Miriam, show them the box.
12:36I know what you're thinking.
12:38Why not just stack two pizza boxes on top of each other?
12:42Mike was excited about telling his customer how much value they were getting.
12:46He didn't want to stack the two pizzas on top of each other because that looks and feels like one
12:50pizza.
12:51I want people to feel like they're getting an unbelievable deal.
12:55And I want everyone who sees them walking down the street to notice.
12:59So what he does is create a double wide pizza box.
13:03That in and of itself is kind of crazy.
13:06But Ilyich is convinced he needs to make just a gigantic splash if he wants to go up against these
13:11powerhouses like Domino's and Pizza Hut.
13:14I want a slogan.
13:16Something people will remember.
13:18This is how we go nationwide.
13:20A nationwide ad is a massive gamble.
13:22He's going to spend millions of dollars on a commercial that's going to air in places where they don't even
13:27have a Little Caesars within a hundred miles.
13:28But I think that speaks to the genius of Mike Illich.
13:32Because ultimately the commercials were not designed to reach customers, but rather potential franchisees.
13:41In 1979, Little Caesars launches their first national television campaign.
13:47Featuring their soon to be iconic slogan.
13:51Pizza, pizza.
13:53Pizza, pizza.
13:53Pizza, pizza.
13:55And in addition to creating the buzzword of the time, they also developed the most viral pizza box ever.
14:02They also made these funny, quirky, memorable commercials that just really made the big box look like fun.
14:09Little Caesars pizza, pizza.
14:11The very large value.
14:13The pizza, pizza was genius.
14:15He had found that little thing that would differentiate him from delivery or sit down restaurant.
14:21And it really shook up the pizza industry.
14:24And the number one pizza chain in the country takes notice.
14:29So much good food for so little money.
14:31Pizza, pizza.
14:32It means never having to say you're hungry.
14:35Rick, your thoughts on Little Caesars?
14:40I don't think they're really anything to worry about.
14:42I mean, they're a takeout chain, right?
14:44For the past two years, earnings have slipped.
14:46And with Little Caesars' very fun advertising campaign,
14:49now the board is concerned about Pizza Hut's ability to maintain its position as number one.
14:53I think what we need to focus on is improving the dine-in experience
14:58and making sure that our customers get the best quality pizza they can find.
15:03According to our surveys, customers prefer a pizza with a thicker crust.
15:08Pizza Hut's original menu had two pizza styles.
15:11They had thin crust and a slightly thicker crust, what we would now just call standard crusts.
15:17But Frank realized that customers wanted a thicker pizza style.
15:20So I say, let's give the people what they want.
15:27This is the future of Pizza Hut pizza.
15:34The pan pizza.
15:37What we now know and love is the classic pan pizza that has a thicker crust like Chicago deep dish
15:43pizza.
15:43But it's much breadier.
15:44It's not dense and flaky and pastry-like.
15:48It comes out of the kitchen blazing hot and this pan sizzling there in front of you.
15:52That's a world of difference from getting a pizza in a cardboard box.
15:56And this is revolutionary.
15:57It will be one of the most popular and most enduring pizzas of all time.
16:03You're not going to serve it in that thing, are you?
16:06That's the idea.
16:08Yeah.
16:09Except they don't get it.
16:10They don't like it.
16:11They don't understand it.
16:13Well, it's all part of an experience.
16:14We don't need to waste our energy on dimmicky promotions.
16:19Our sales say otherwise.
16:23Frank Corney is a successful guy.
16:25He's run this huge company.
16:27He's probably thinking, what more do I have to prove?
16:31I think I know how to run my own company.
16:34Frank, Pizza Hut isn't your company anymore.
16:41In 1980, just three years after selling Pizza Hut to PepsiCo, Frank Corney resigns.
16:48Clearly, Frank Corney's vision for the company does not align with that of PepsiCo.
16:53And he didn't want to stick around.
16:56But then PepsiCo makes an unexpected decision.
17:00Just months after rejecting Corney's new idea, PepsiCo releases the pan pizza nationwide.
17:10The pan pizza is not just a menu item. It's a spectacle.
17:15There's almost like a crispy, caramelized, fried quality to the dough.
17:19It's like pizza cake. It's like pizza cake.
17:22It quickly became Pizza Hut's number one seller and it still is today.
17:26The pan pizza helps separate Pizza Hut even further from the pack.
17:31You have Domino's, which is all about delivery.
17:34You've got Little Caesars, which is smaller and all about takeout.
17:37But Pizza Hut is a restaurant.
17:38And a restaurant's job is to provide its customers with an experience, not just food.
17:43So the pan pizza is exactly that experience.
17:46Ending the chain's three consecutive years of slipping profits,
17:50by 1981, the game-changing product boosts Pizza Hut's annual sales to nearly $1 billion.
17:59At a time when thin crust pizzas are the only pizzas,
18:04the pan pizza at Pizza Hut inspires a treasure trove of thicker pizzas across the country.
18:10But Frank's not pleased.
18:13The pan pizza, this was his baby.
18:17He knows he deserves full credit for that product.
18:21So Frank's not done with the pizza business.
18:24He'll come back and he will alter the industry yet again.
18:32In 1981, Little Caesars has over 220 locations across the Midwest.
18:39Yet Mike Illich is still struggling to keep his head above water.
18:43Okay, so that's two medium pepperoni.
18:45Their two-for-one pizza-pizza deal has been a runaway success.
18:50But it's also caused them to cut their profit margins dangerously thin.
18:55How can he keep the profits coming in and still run the promotion without tanking the business?
19:02Would you like anything else?
19:04So Illich is looking for a way to increase profits without increasing costs.
19:08What do we have?
19:15Working in a pizza shop, you know you're going to end up with extra dough by the end of the
19:19day.
19:20This is going to be food waste.
19:22Why don't you try an order of our new side?
19:26Great, we'll see you soon.
19:28He thought, why not turn this into our advantage?
19:36And so in a moment of inspiration, he takes the ingredients he already has and creates this brand new product.
19:47Made of pizza dough with butter, garlic and Parmesan cheese on top, Illich gives his new creation a clever name.
19:58Now, breadsticks are everywhere, but Crazy Bread was the first bread-based side for a pizza restaurant in America.
20:05And it's so wild because ultimately you're just eating repurposed pizza dough, but he really paves the way for a
20:12whole new dimension to the pizza menu when he adds pizza adjacent sides.
20:18Much like a hamburger has the accompaniment of French fries, Little Caesar's Pizza is now accompanied by this delicious buttery
20:27Parmesan-covered treat.
20:29So essentially, give people an extra pizza for free, but get them to pay for side dishes.
20:39Meanwhile, Pizza Hut has been hard at work on their own new menu item to increase profits and stay ahead
20:45of the pack.
20:47After combing through their numbers, the top brass spot a potential target.
20:52Not wasted scraps, but wasted time.
20:58Pizza restaurants are not popular at lunchtime because pizzas take longer to bake and they require multiple people to consume.
21:06The average fast food chain makes the bulk of their daily revenue at lunch, between 35 and 40 percent.
21:14At Pizza Hut, lunch orders only account for around 15 percent.
21:19Pizza Hut has no lunch market, so there's millions of dollars that are not being made during that period of
21:27time.
21:28And so Pizza Hut pivots to something that addresses the lunch crowd.
21:33Something that is iconic and adorable and deeply delicious.
21:44I think the genius behind the branding of the personal pan pizza is not just that it sounds better than
21:52extra small, but also allows people to really have their own choices when they're ordering.
21:59It's a little six inch pie. You can get the same toppings that you would get on the larger format
22:04pizza, but it's not meant to be shared.
22:07So instead of one family getting one large pizza, everybody can get their own personal pizza.
22:13Priced at $1.49 and guaranteed to be ready in just five minutes, Pizza Hut's lunchtime business quickly jumps by
22:2270 percent.
22:24It totally upended the thinking about eating lunch at pizza restaurants.
22:29And if we're thinking about this like a pizza war, this is like Pizza Hut gaining an important territory on
22:34the battlefields.
22:37Pizza Hut's latest victory isn't just bad news for Little Caesars, but for America's number two pizza chain, Domino's.
22:46Since launching nearly 25 years ago, Tom Monaghan's chain has gone from a single storefront to over 2,000 locations
22:54nationwide.
22:56All offering something Pizza Hut and Little Caesars don't.
23:00These are supposed to go out 40 minutes ago. Come on.
23:02Domino's distinguishes itself by being incredibly simple.
23:06Good to go. All right.
23:08They focus on delivery and speed.
23:10But then Tom Monaghan hears that Pizza Hut's promising this personal pan pizza in five minutes or less.
23:18But you have to go to Pizza Hut to order one.
23:22So he realizes Domino's needs to create their own little gimmick.
23:28Tom Monaghan knows that the average delivery time is around 24 minutes.
23:33So he decides to do something unprecedented in the history of pizza.
23:40Domino's guaranteed delivery in 30 minutes or less.
23:43In 1984, Domino's revamps their successful delivery service by offering a 30 minute guarantee or your pizza is free.
23:54It's absolutely brilliant because they're not giving away that many free pizzas.
23:58It attracts a ton of attention and really gets them going on the national scene.
24:02It was almost unsustainable, but it captured the imagination.
24:06It gamified pizza for heaven's sake.
24:09Suddenly you weren't just ordering a pizza.
24:11It was a race against time.
24:13By the end of 1985, Domino's hits record sales of over $1 billion across their 2,800 locations.
24:21The 30 minute guarantee made Domino's not just the fastest growing pizza restaurant in the United States.
24:27It also made it the fastest growing restaurant chain in history.
24:31Expanding his lucrative empire, Monaghan becomes the first pizza chain owner to buy a different type of franchise.
24:40For $53 million, Monaghan buys the Detroit Tigers baseball team.
24:46It was one of the highest amounts paid for a franchise at that time.
24:51Meanwhile, by the mid 1980s, Little Caesars national ad campaign is finally paying off.
24:58Potential franchisees just love this pizza concept with outlandish boxes and crazy commercials.
25:05And so Little Caesars is just booming.
25:08They're growing so incredibly fast, they're adding store after store.
25:12By 1986, there are 1,000 locations across 38 states.
25:18And all of a sudden, it goes from two big pizza players to the big three.
25:23And these three companies are all in their own lanes.
25:27Little Caesars is a takeout business.
25:29Domino's focuses on delivery, and Pizza Hut is a sit down experience.
25:35But that delicate balance is about to be shattered.
25:38In 1986, Pizza Hut decides that it's going to go head to head with Domino's in the delivery space.
25:44And they have an ad campaign that shows two guys playing Domino's.
25:48And they actually say,
25:49Maybe some people just don't like Domino's anymore.
25:52Guess not.
25:52This is a real insult to them.
25:55So this really kicks off the pizza wars.
25:57Where these different companies all start eyeing each other's businesses as a way for them to expand and get ahead.
26:06By 1991, Pizza Hut's delivery business becomes a $1.2 billion a year cash cow, allowing them to control over
26:1520% of the pizza delivery market.
26:18And cut into Domino's bottom line.
26:21With Pizza Hut introducing delivery, the 30 minute guarantee becomes more important than ever to succeed in this market that's
26:29now getting pretty crowded.
26:30While less than 10% of Domino's deliveries are late, those free pizzas cost Domino's nearly $80 million a year.
26:39And this is forcing managers to pressure their drivers to make those deliveries on time.
26:44That causes the drivers to speed, to drive recklessly to make that 30 minute cut off.
26:49And unfortunately, an accident occurs.
26:53Domino's is found liable for nearly $80 million in damages.
26:59And more lawsuits follow after other delivery driver accidents.
27:03Domino's got sued like 200 times.
27:06So following those lawsuits, Monaghan and Domino's decided to shut down the 30 minute guarantee.
27:14Forced to cancel their guarantee after less than a decade, sales slip two years in a row.
27:20And by 1992, Domino's must close hundreds of locations.
27:25Instead of Domino's being at the top of the food chain, now Domino's is competing with Little Caesars for the
27:32number two spot.
27:33So, Tom Monaghan realizes Domino's is in trouble and he is scrambling to try to stay afloat and financially viable.
27:42That's when Monaghan throws a Hail Mary.
27:45Sir, he's here.
27:48Send him in.
27:57Tom Monaghan is going to make an offer that Mike Illich can't refuse.
28:08In the early 1990s, after suffering store closures, slipping profits, and mounting lawsuits, the founder of Domino's reaches out to
28:18his newest rival, Little Caesar's Mike Illich.
28:22Tom Monaghan, he's struggling with Domino's and desperate for a life raft.
28:29What's your offer?
28:31Highest of a millennia go is 85.
28:34That's my best and final offer.
28:36He comes up with a proposition for Mike Illich that he can't refuse.
28:44Done.
28:4685 million.
28:47He decides to sell Illich the Detroit Tigers.
28:53The very team for whose minor league franchise Mike Illich used to play.
28:58Mike Illich loved baseball.
29:00It coursed through his veins.
29:02And so owning the Detroit Tigers would bring him back to his roots.
29:06If you can't play for them, why don't you own them?
29:09Tom Monaghan thinks this team has been a distraction.
29:13He wants to focus on pizza and rebuilding Domino's.
29:19Oh, uh, by the way, Domino's would be offering takeout as an option, not just delivery.
29:26When you have these two pizza guys with these big personalities...
29:31I want you to hear it from me first.
29:34There's no doubt that they're gonna eventually run up against one another.
29:38Within weeks, Domino's adds carryout counters to its 5,000 plus locations.
29:45Little Caesars punches back by launching a new delivery service.
29:50And by 1994, there's a new number two pizza chain.
29:55Little Caesars.
29:59Leaving Tom Monaghan desperate for a new way to fight back.
30:04Everything in the pizza wars has been a direct response to a move by one of the competitors.
30:10One adds takeout, the other one adds takeout.
30:12One adds delivery, the other one adds delivery.
30:15But Tom Monaghan realizes the only way I'm gonna really get one over on Little Caesars and on Pizza Hut
30:21is if I do something wholly original that they are not doing.
30:28What are these?
30:31Chicken wings.
30:33They're smothered in a hot and tangy sauce.
30:41Wings are a regional delicacy from upstate New York.
30:46The idea of getting them in pizza places was not the norm in the mid-90s.
30:51They were definitely not common.
30:53In fact, the wings were sort of the scraps of the chicken.
30:57It's got a kick.
31:05I think these do go great with pizza.
31:08In 1994, Domino's launches a little known delicacy as a new side item.
31:17Buffalo wings.
31:20At this time, Buffalo Wild Wings had only about 15 locations in the Midwest.
31:26So believe it or not, most people in America tasted their first ever buffalo wing courtesy of Domino's.
31:33And it becomes a nationwide taste sensation.
31:37After adding wings to their menu, Domino's total revenue increases roughly $300 million, closing the gap on industry leader Pizza
31:47Hut, who is starting to feel the heat.
31:52Do you have a typical order?
31:55Mushrooms and pepperoni.
31:57But an ambitious new Pizza Hut employee named Patty Scheibmer is hoping to find the company's next big innovation.
32:06She's a recent graduate with a degree in home economics.
32:09She joins the Pizza Hut team as a food scientist.
32:12Even though she's a low level member of the team, she has got grand ambitions for Pizza Hut.
32:18And she decides for inspiration to run focus groups.
32:22Desperate to make a name for herself, Scheibmer has spent weeks searching for ways to reinvigorate pizza sales.
32:29Do you typically have leftovers?
32:31No, not really.
32:35Except for the pizza bones.
32:37I'll feed them to my dog.
32:40In one of these focus groups, Patty hears one of the attendees use the term pizza bones, which are the
32:46crusts that you leave on the plate.
32:48You don't eat the crust?
32:52And suddenly Patty realizes there's an opportunity here.
32:56What if the crust was as delicious and as desirable as the pizza itself?
33:03Scheibmer doesn't know it, but this innocent comment will lead to a billion dollar idea and reimagine how we eat
33:11pizza.
33:17In the mid-1990s, Pizza Hut's Patty Scheibmer has discovered a possible key to unlocking pizza's full potential.
33:26She realizes in focus groups that people are really leaving the crust behind.
33:32One guy actually calls the crust pizza bones.
33:36So how do you prevent people from leaving pizza bones on the plate?
33:40Well, you make the crust taste better.
33:41And the main thing people love about pizza is the melty cheese.
33:49So, of course, a perfect way to make the crust taste better is by stuffing it with cheese.
33:57Scheibmer begins experimenting with a variety of cheeses.
34:01At the time, this was completely unprecedented.
34:04This is like putting a side dish inside the pizza.
34:09But it's not as simple as just putting cheese into the edge of a dough.
34:14Not all cheeses are the same.
34:15They have different amounts of moisture.
34:17And if it's too little moisture, the cheese won't melt properly.
34:21If it's too much moisture,
34:26you'll have a buildup of steam that'll rip through the crust,
34:29and then you get molten cheese pouring out the edge.
34:37Finally, she tests a relatively new product called string cheese.
34:44String cheese had become popular in the late 1980s
34:46and was available at most grocery stores in the country.
34:49And its diameter is exactly the right size for pushing into a pizza crust.
35:00The beauty of the string cheese product is that it's a mozzarella.
35:04But unlike most mozzarella, it's been stretched a little longer.
35:08And so the casein proteins tend to have stronger bonds.
35:18So as you pull apart the crusts, you get this perfectly viscous cheese pull,
35:25which is so visual, and it goes right along with that idea
35:28of having an experience with the food
35:30and not just making it be something that fills your belly.
35:35On March 26, 1995, Pizza Hut's Stuffed Crust Pizza
35:41hits their roughly 8,000 locations nationwide.
35:45People loved stuffed crust pizza when it came out.
35:48It was something that hadn't been seen in pizza before.
35:51The crust was always just a glorified handle.
35:55The moment you make the crust edible,
35:57pizza becomes a very different type of food.
36:00It means that you can eat the crust first.
36:04You can dip it in the sauce.
36:05And the idea of taking an often discarded bit of the pizza
36:10and making it arguably one of the most desirable parts of it,
36:14this was revolutionary.
36:16Within months, the new product accounts for nearly 30% of all Pizza Hut sales.
36:23And in its first year alone,
36:25Stuffed Crust Pizza becomes a $1 billion product.
36:32But not everyone is thrilled with Pizza Hut's most recent success.
36:37Notably, their former president, Frank Carney.
36:41Looking at what was happening with his baby, Pizza Hut,
36:44Frank Carney was not too pleased at their decision to go toward mass appeal
36:48in the face of this mom-and-pop restaurant that he started.
36:52Since leaving his company over a decade ago,
36:54Carney has struggled to find his next big project.
36:58After he sells off his pizza company to Pepsi,
37:02he goes into venture capital and loses his shirt.
37:06So he decides he's possibly not a real good investment guy,
37:09but he knows his pizza.
37:12He still had energy, new ideas, new concepts that he wanted to put into pizza.
37:16And it's around this time that he discovers a young pizza chain coming out of Indiana
37:21that had been growing in popularity.
37:23Carney doesn't know it, but his disdain for his former company will spur his unexpected return to the pizza industry.
37:31And it won't be with Pizza Hut.
37:41In the mid-1990s, the co-founder of Pizza Hut is feeling stuck.
37:47Since leaving Pizza Hut in 1980, Frank Carney used his finances to become venture capitalists,
37:53but it didn't work out so well for him.
37:55But he couldn't go back to Pizza Hut.
37:57They had moved on without him.
38:07That is good.
38:11So, instead of starting a new brand in the way that he did in the late 1950s,
38:16he decides to latch onto another chain pizza company that had been growing in popularity.
38:24That is really good.
38:25And I speak, of course, of Papa John's.
38:30Papa John's is a small pizza chain that was founded in Indiana in 1984.
38:35There are only a few hundred stores, more of a regional, local company, not a national player.
38:41And so, compared to the big three, there's not a lot going on there.
38:46Papa John's.
38:48But Frank Carney thinks that Papa John's can go bigger.
38:51He thinks that they have what it takes to be a contender in the national pizza industry.
38:56So Carney takes one last shot at investing and opens his own Papa John's franchise, which proves to be a
39:03hit.
39:04By 1997, he owns over 60 and tells everyone about it in his own unique way.
39:11Frank decides to announce to the world that he's working with Papa John's by producing a commercial in which he
39:18declares to the board of Pizza Hut that he's changing teams.
39:21Sorry, guys.
39:24I found a better pizza.
39:27It was an incredibly audacious move.
39:30You have one of the founders of Pizza Hut switching to a rival company, and not just any rival company,
39:37not the second place or third place, but like a young upstart company.
39:41This is a big deal.
39:43It's a massive shakeup.
39:45It's a mic drop moment.
39:46Pizza Hut, needless to say, is not pleased by these ads.
39:50So they filed a lawsuit against Papa John's.
39:52Papa John's loves this.
39:54This is the best press they could ever get, especially when the court rules in favor of Papa John's.
40:01It really backfired on Pizza Hut because this is the thing that puts Papa John's on the map and skyrockets
40:07them into the number four biggest pizza chain in the United States.
40:11No longer is there just a big three.
40:13Now it's a big four.
40:18And Frank Carney ends up with 133 franchises for Papa John's and becomes a major player in the company.
40:28Frank Carney's impact on the world of pizza in this country is undeniable.
40:33He's co-founder of the largest pizza chain in the world, Pizza Hut.
40:37And he's also the guy who helped make Papa John's the number four pizza chain.
40:42That's incredible.
40:45But Carney's success would not have been possible without the rivals that pushed him to new heights.
40:51Like Tom Monaghan, who retires in 1998 after selling all but a small steak of Domino's for a whopping $1
41:00.1 billion.
41:03Tom Monaghan is all about innovation.
41:06And his fingerprint on the pizza industry will be felt forever.
41:10And Mike and Marian Illich, who transformed Little Caesars into the world's biggest carry-out pizza chain with over 5
41:18,000 locations across the globe.
41:21Mike Illich is a man who rose from nothing, who took a small investment with his wife and turned it
41:29into a billion-dollar business.
41:31And now he's become one of the big pizza kings.
41:36Today, the big four pizza chains remain the same, with gross annual revenue placing Papa John's in fourth, Little Caesars
41:44in third.
41:45Only now Pizza Hut is number two, just behind Domino's at number one.
41:51On the surface, these companies were competing with each other.
41:54But what they were actually doing was they legitimized the idea of pizza to mainstream America.
42:02The chains still control about half of the pizza business in America.
42:06So, as much as I am a mom-and-pop pizza guy, I love that the chain pizzerias exist.
42:12There is this beautiful sort of pizza pie circle of life, where all of the pizza communities are working together,
42:20even though they are competing.
42:22And the spoils of the pizza war, they come to us.
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