Environmental Scan: Buitoni PizzaBy: Shannon Pickering

An environmental scan indicates that Buitoni Pizza is a product which is well positioned to

capitalize on current demographic and socio-cultural forces taking place in Canada. However,

Buitoni faces threats from regulatory forces, namely a recent recall, as well as from competitive

forces, which it needs to pay close attention to in order to stay relevant in the highly competitive

pizza sector.

Buitoni Pizza is a great example of a food product which reflects the demographic and socio-

cultural forces currently affecting Canadian consumption patterns. The emergence of non-

traditional families is continuing to rise in Canada. There are currently more households without

children then with, and the number of single-person households is on the rise. The only

household type that has decreased in recent years is households with children, which was down

0.5% (Statistics Canada). These trends are reflected in Buitoni’s smaller size and adult appeal.

Its size is smaller than typical frozen pizzas, and it is not large enough to feed a traditional family

on its own. Its size is ideal for feeding one or two people. Its gourmet ingredients and flavours

are appealing to adults, reflecting families with fewer children, as well as an aging population.

An increasingly busy lifestyle, an increased focus on health and an increased demand for better

quality food are all socio-cultural forces which Buitoni Pizza is well positioned to capitalize on.

As dual-income households continue to increase, Canadian consumers are increasingly

demanding fast, convenient pre-prepared meals. However, consumers are also demanding higher

quality, healthier food products. Butoni is a product which can satisfy all of these demands. Its

quality ingredients and unique topping combinations portray Buitoni as a high quality, gourmet

meal, which as a frozen food product is also fast and convenient. Its small size also makes it an

ideal choice as a snack or a meal on the go. Furthermore, Buitoni is a comparatively healthy

frozen pizza option, allowing busy yet health-conscious consumers to not have to compromise on

health, taste or convenience.

Regulatory forces have recently been a cause of concern for Buitoni. The biggest threat Buitoni

currently faces is a voluntary recall issued by Nestle on December 11, 2012, which involved five

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of Buitoni’s pizza varieties. As a result of pizzas being found to contain metal pieces in

Germany, both the Canadian Food Inspection Agency (CFIA) and Nestle issued a health hazard

warning. The Canadian food Inspection Agency protects Canadians from food hazards. It takes

swift action on complaints, and closely monitors the effectiveness of recalls. Although most

food recalls are initiated by the company involved, the CFIA can initiate a mandatory recall if a

company fails to comply. The complaints from Germany were enough to warrant a recall of

Buitoni products that may be considered harmful. Nestle, like any other food company needs to

comply with CFIA regulations. It was in their best interest from a public relations standpoint to

voluntarily recall these products, rather than having a mandatory recall issued by the CIFA.

The recall has since dominated Buitoni’s internet presence, with numerous articles being written

about it and these articles coming up as top search engine results for Buitoni. The prevalence of

internet use in Canada is a technological and socio-cultural force which cannot be ignored. With

many Canadians using the internet to obtain information, Buitoni needs to take action to ensure

the media coverage of the recall does not permanently tarnish its reputation.

Buitoni faces strong competitive forces from numerous direct and indirect competitors, the

strongest of which are other companies offering pizza products. Pizza as a whole is a highly

competitive sector in the food industry, and Buitoni faces increasing competition in the frozen

thin crust pizza sector. Many brands are offering smaller, gourmet thin crust pizzas similar to

Buitoni. Store brands such as Our Finest by Wal-Mart, as well as very well-known brands such

as McCains are now offering frozen thin crust pizza. These pizzas are often larger and less

expensive than Buitoni, with the least expensive pizza being offered by Donatello which sells for

$3.00 for 755 grams. In order to stay competitive, Buitoni must remain sensitive to the lower

prices being offered for very similar products, as well as the improved quality and growing

number of frozen thin crust pizzas being offered to consumers.

Buitoni also faces indirect competition from restaurants offering pizza. Many restaurants are also

capitalizing on the consumer desire for healthy, high quality thin crust pizza. Both Pizza Pizza

and Pizza Hut offer health-check certified pizzas, which are verified to be healthy choices by the

Heart and Stroke Foundation. They are offered in flavours such as Chicken Rustica at Pizza

Pizza and Margherita at Pizza Hut. Restaurant pizza already has a competitive advantage in that

it is generally considered to be of higher-quality then frozen pizzas. Furthermore, an improving

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economy may give restaurants even more of a competitive edge. On average, Canadian

households reported spending $7,795 on food in 2011, down 0.4% from 2010. Spending on food

purchased from stores fell 1.8% to $5,588 on average, while spending on food purchased from

restaurants rose 3.6% to $2,207 (Statistics Canada). As the economy improves, people may

continue to choose restaurants as a means of convenience, rather than purchasing frozen prepared

meals. Aside from the pizza industry, Buitoni must also closely monitor competitive forces from

other indirect competitors including other frozen food products and the food industry as a whole.

Shannon Pickering