Papa John’s Pizza Is Going Organic

April 4, 2017, 1:00 PM UTC

Papa John’s (PZZA) is the latest restaurant chain to experiment with new ingredients in a bid to stay on trend with consumers’ evolving palates.

The pizza purveyor has launched two pilot programs that incorporate organic produce and gluten-free crusts in its menu at select U.S. locations. Papa John’s organics pilot focuses on four toppings (Roma tomatoes, green peppers, yellow onions, and mushrooms) available only in the Lexington, Ky. market. Its gluten-free crust will be available in four Los Angeles, Phoenix, Nashville, and St. Louis.

“We just think this is a trend that is going to be out there, and we want to be the first in our industry to have organic produce on our menu,” chief ingredients officer Sean Muldoon told Fortune in an interview. Papa John’s is partnering with online organic delivery provider Green BEAN Delivery to source the produce it will need from family farms across several states.

For Papa John’s, both test programs are aimed at tilting menu items toward trends that consumers say they care about today. About half of all U.S. households buy organic produce, and around 13% of produce that is grown in the U.S. today is from certified organic farms. Muldoon says that figure could rise to 20% by 2020. “That was telling us this is where the consumer is going,” he said, adding it points to increased attention toward health and wellness.

America’s healthy foods trend is incentivizing big restaurant chains to remove artificial flavors and colors and use more natural ingredients. Panera Bread (PNRA) and Chipotle Mexican Grill (CMG) are each well on their way, while even chains like McDonald’s (MCD) are doing things differently.

All those higher-quality ingredients come at a cost, of course, though executives argue that consumers reward chains that are serving “cleaner” foods. Papa John’s has committed to spending $100 million annually to ensure it is using fresher ingredients. Past initiatives have included using only cage-free eggs, chickens raised without antibiotics, and removing 14 “unwanted ingredients” like corn syrup.

Sometimes menu innovations take patience. Because Papa John’s doesn’t use a lot of eggs, going cage free wasn’t too big of an effort. But a shift toward organic creates far more logistical complications and is also more expensive if implemented across the company’s 3,441 North America locations. Muldoon says testing organic produce is important because a lot of consumers perceive it as being healthier and even making them feel better. While the taste difference will be indiscernible, it is the perception of health that matters with this kind of menu innovation.

To ensure its test programs are successful, Papa John’s will monitor sales trends and even social media feedback to see how they are going. Of the two, the organic produce initiative is further along in the testing process than the gluten-free crust. While Papa John’s is employing procedures to prevent contact with gluten, the company is not yet recommending the gluten-free crust for those with Celiac Disease or serious gluten intolerance because of potential contamination.

All of this experimentation comes from a position of strength. Papa John’s, as well as top rival Domino’s (DPZ), has posted steady sales growth and outperformed rivals even as there has been broader softness in the restaurant category.

Read More

Great ResignationInflationSupply ChainsLeadership