Nestlé is testing a way to make a hot thin-crust DiGiorno pizza on demand in places such as college dorms and airports as the world’s largest food company looks to move the brand “beyond the freezer.”
The kiosk, which looks similar to a Redbox DVD rental machine, allows consumers to order a cheese or pepperoni pizza for $9 that is delivered through a slot in the machine ready to eat in three minutes. Nestlé launched a pilot kiosk at a Colorado Walmart in April and introduced a second one three months later at a company facility in Ohio where it develops frozen foods.
“This is about moving beyond the freezer, and fundamentally shifting the opportunity for us to serve consumers in places and occasions that we don’t have immediate access to today,” Adam Graves, president of Nestlé USA’s pizza and snacking division, said in an interview. “The early results are encouraging and there are any number of imaginable applications where this concept in tech could go in the future.”
Nestlé said of the roughly 100 customers it surveyed who have purchased from the kiosk, 95% of them believed some aspect makes the hot DiGiorno pizza a good value and 92% see themselves buying another pizza from the kiosk in the future.
Nestlé is using the two DiGiorno kiosks it has rolled out already to determine whether it will expand the pilot, the pace at which it would do it, and where the kiosks would be located. Possible areas where the vending machine could appear include college campuses and dorms, home improvement stores and airports. Nestlé said it is the first major CPG company to do a pilot for an automated pizza vending machine.
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DiGiorno, with the tagline “It’s Not Delivery, It’s DiGiorno,” is Nestlé’s best-selling pizza, with nearly $1.4 billion in annual sales during the 52 weeks ending July 16, according to Circana, a Chicago-based market research firm. The brand is also the market leader in the $6.9 billion frozen pizza category, topping its closest competitor in Red Baron, which had $1.3 billion in sales during the same period.
After remaining flat for several years at about $4.7 billion, sales surged during the pandemic and have continued growing ever since.
If Nestlé decides to roll out the kiosk more widely, it could allow the company to grab a larger share of the frozen pizza market. The machines also potentially could become a threat to pizza delivery firms such as Domino’s and Papa John’s.
The Switzerland-based CPG giant eventually could bring other brands in its frozen portfolio, which includes Hot Pockets, Lean Cuisine, Tombstone pizza and Stouffer’s, to a kiosk like the one making DiGiorno. But for now the focus is entirely on DiGiorno.
Graves said the launch speed of the new kiosks is being dedicated by several factors, including Nestlé’s ability to replenish the machines, demand for the pizzas and the need to service the technology. It’s a drastically different process than Nestlé’s existing business model in retail, Graves noted.
The company also is keeping a close watch on the quality of the pizza to ensure it is the same as what consumers expect from the frozen DiGiorno they purchase in stores.
“We’re being very mindful about how and where we scale because of that and the quality and trust commitment we have with consumers,” Graves said.