Restaurants Are Jumping on the Fast-Casual Pizza Trend

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The hottest trend in fast casual is no longer burritos, freshly baked sandwiches or even gourmet burgers. The key to fast growth in the otherwise stagnant restaurant industry is pizza.

Yes, pizza.

Unlike the traditional pizzerias that are best known for the quick deliveries of large pies, the fast-casual movement is led by chains that assemble individual-sized pizzas as they're ordered, firing them up in commercial ovens that bake up the customized pies in minutes.

Nation's Restaurant News recently singled out some of the rising stars of fast-casual pizza. They are small regional chains at the moment. There's Fired Pie in Arizona, Blast 825 in California and &pizza in the Washington, D.C., area.

The movement is strong, and even the biggest players are still in their infancy. Nation's Restaurant News points out that Pasadena-based Blaze Pizza was the first chain to hit 50 units last year, but two other concepts -- Pieology and Mod Pizza -- are expected to surpass 100 locations by the end of this year.

Things are moving pretty fast in this space and even the big boys are starting to pay attention.

There's Dough to Be Made

Chipotle Mexican Grill (CMG) hopped on the fast-casual craze early with its namesake burrito chain, and two years ago it made a tactical investment in Pizzeria Locale. It tweaked the concept by incorporating the assembly-line ordering process that has made Chipotle so popular, letting folks pick out individual toppings for the 11-inch pies that are then baked up in turbo ovens that deliver the goods in just two minutes.

Buffalo Wild Wings (BWLD) has also taken a minority stake in PizzaRev, another fast-casual concept. Customers order artisanal pizzas that are built as they're ordered and they're ready to eat after a three-minute stint in the oven.

Some of the chains that don't have affiliations with public companies are also well connected. Fired Pie was started by regional executives from California Pizza Kitchen and &pizza has Ruby Tuesday's (RT) founder as its chairman of the board.

With privately held chains growing quickly and big money behind some of the publicly traded operators, it's a safe bet that vacant stand-alone buildings and strip mall locations will be easy sells for this new breed of pizzeria. One would think that the new niche's success would come at the expense of traditional chains, but that hasn't been the case so far. Analysts see revenue at Papa John's (PZZA) and Domino's (DPZ) growing at 5 and 9 percent, respectively, this year. Then again, they have also embraced the trend by adding fancier fare to compete with changing dining preferences.

The fast-casual pizza trend is heating up, and just like the pies themselves, it's heating up in a hurry.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Buffalo Wild Wings and Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days, and check out The Motley Fool's one great stock to buy for 2015 and beyond.
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