Analysis by Sheila Eggleston The rise and rise of pizza is providing a sound base for investment in the market. Manufacturers are putting money into plant, technology and the quest for great bases and toppings, while promotional activity has been aggressive, and advertising spends huge. However growth is in danger of reaching saturation point and the chances of pizza being classed as a commodity hasn't gone unnoticed by suppliers. The market is worth £503.7m, growing 8% year on year, and manufacturers are being spurred to provide better quality and innovative products by their discerning band of consumers. The three best sellers in both of the market's sectors ­ frozen and chilled ­ are cheese and tomato, pepperoni, and ham and pineapple. While brands dominate the £325.6m frozen sector, own label reigns over the £178.1m chilled. Canadian Pizza has just announced a £13m investment in fresh pizza production which will bring new lines to the own label market. The investment includes a new topping facility at Deeside which will be running by September 2001. MD David McLaughlin says: "The whole market has become commoditised and this has made everyone sit up and look at its true value. "What we are bringing to the party is investment in equipment and 2001 technology. We are looking at snacks using ciabatta, bruschetta and foccacia bread as light bases which don't need lots of toppings." While McLaughlin is not convinced that microwaveable is the Holy Grail in pizza he does believe toastable products have potential. Also meal deals where pizza is sold with a salad or a beer can boost sales. "Although it's difficult for some who don't have food to go or the space," says McLaughlin, "we are going to see more of it as retailers get slicker in store." Organic remains a niche market but with retailers increasing their organic ranges, the growth potential is there. Canadian Pizza has recently struck a deal with Asda to supply organic pizza under its Pizzaman brand. Simply Organic was launched by Schwan's and marketing controller Ben Johnson says it would be hard to value as it isn't quite a year old. "But even though organic pizza is less than 5% of the market, it will continue to grow. Chains like Tesco are doing a good job of promoting organic in a cohesive way." Size matters in this market and the clock has turned full circle as 5ins pizzas make a comeback with the growth of eating on the go. But those who can remember the early pizzas can rest assured. They bear no resemblance to the stodge based, meanly topped products of yesteryear. Schwan's claims to be the trendsetter for this upgraded revival, responding to lifestyle changes and people wanting more food to go. Its bestsellers are 5ins Chicago Town deep dish triple cheese and pepperoni. "We don't copy," says Johnson. "It's a pointless exercise. We were the first to launch twin packs in a 9ins format and others have since followed suit." A new Freschetta line is being planned, and sweet pizza is another possibility, as he says: "You have flans which are both savoury and sweet." He claims "eat size" is more important in determining what consumers will buy. "Our research shows most people think about the eat size when they buy pizza, so we are working with retailers on better merchandising." Heinz' acquisition of the UB frozen and chilled division last year brought the San Marco brand into its fold. Marketing controller John Hendy says: "The twin pack sector is growing by 50% and our big initiative is the San Marco twin pack ­ two 9ins pizzas for £2.99. Targeted at families it offers everyday good value. "We've also just introduced technology which puts the toppings on all together so that you get an even spread." Although Schwan's claims to have "seen off" McCain's Pizza Delivery with its bake and rise brand, Freschetta, McCain's has scored with Micro Pizza. Prior to its development, McCain's had lost ground to its US rivals, but claims the year old brand is worth nearly £20m and more than 4% of the sector. Marketing manager Rob Waddell says: "We have sold enough Micro Pizzas in one year for it to have been bought by every household in the country. New varieties and support over the coming months will drive sales and further grow the category." McCain's has backed its brand with £2.8m this year, Green Isle's Goodfella's has a £2m spend and Schwan's £2.4m, although the latter intends to double this figure in 2001. Heinz' £11m frozen food marketing budget includes £2m on pizzas. But Schwan's and Heinz are now going head to head with McCain's ­ Heinz with its microwaveable 5ins Heinz range, aimed at young snackers, and more products including baked beans, and Schwan's with Chicago Town SnackPack. Findus, now owned by Swedish Investment firm EQT, continues to build on its French bread pizza range. and plans to capitalise on the growth of food to go in 2001. Another innovative line is Pizza Snacks from Freiberger which can be cooked from frozen in the toaster in four minutes. This year the German company invested in new "high care" manufacturing lines in its Berlin and Muggensturm factories. It says the introduction of the 49p main meal pizza offering value and quality has attracted new users. UK md Richard Harrow says: "It's the ability to provide improved products and attractive promotions or EDLP which is the key to success." Danish meat supplier Steff Houlberg is hoping to expand its UK business with a range of toppings which includes spicy pork and beef, meatballs and various pepperoni flavours. The company is targeting wholesalers with products in resealable bags for easy storage and to stop wastage. Steff Houlberg has seven plants in Denmark where the product is made and has now set up a UK base. Stateside Foods is the UK's largest independent frozen and chilled manufacturer specialising in Italian style stone-baked and stuffed crusts. Last year it acquired the Tolona pizza plant from McCain's where it makes thin and crispy and deep pan. But, in volume, it says stone-baked has stormed ahead because of chains like Pizza Express which has encouraged people to try new flavours. Pizzas developed for Safeway include roasted vegetable and goats cheese, and spinach and ricotta. "If we had tried to launch those two years ago, they wouldn't have worked," says sales and marketing director Guy Sabini. Hazlewood Foods says for the first time, chilled pizza expenditure is growing at a faster rate than frozen. Director Peter Cleghorn says: "Consumers have more money to spend and chilled pizza is seen as an aspirational category over frozen. "This upward trend will continue, especially as retailers are investing heavily in the sector through product development and increased space." A challenge facing chilled producers is the rising dough concept which has revitalised the frozen pizza market. Hazlewood Foods is trying to solve the problem of how to offer a similar chilled line while stopping the dough from rising in a non frozen environment. {{FOCUS SPECIALS }}