Maybe you have heard of Telepizza on more than one occasion, or maybe not, but do not worry if you have not heard about it yet. In today’s article we will review the history of Telepizza, a company that has reached unsuspected levels of popularity in Spain thanks to its food and we will check if, indeed, the secret is in the dough. Since its creation, it has faced different adversities and a powerful competition such as Burger King or McDonald’s, the big fast food chains, which had a remarkable growth internationally.
Telepizza was founded in 1987 by Leopoldo Fernández Pujals in the neighborhood of Madrid called “El Pilar”. That was the first restaurant of the chain, which gradually spread throughout the capital and later to the rest of the Spanish provinces, finally becoming the leading company in the national pizza market. Its current headquarters are in San Sebastián de los Reyes (Madrid).
The company has been producing or buying all its ingredients centrally since 1992, although in its day it also had factories in Guadalajara, Barcelona, Móstoles and Alcobendas. Its production is concentrated in the factory located in Daganzo de Arriba (Madrid), from where the dumplings are made and later distributed to all the restaurants.
After a rapid expansion, by 1996 it had become the first company of its kind to go public and it was then when, after a period of nine months with his brother Eduardo at the head of the company due to a “coup d’état” together with other small shareholders of the company and being a period marked by a slowdown in growth, Leopoldo Fernández Pujals sat back in the control chair thanks to his largest investor, BBVA, once again boosting the growth of his family business. Telepizza managed to take 50% of the national market, surpassing McDonald’s in sales.
However, in 1999 the company’s founder decided to focus on other areas and sold Telepizza, bringing the company into a new phase led by Pedro Ballvé and José Carlos Olcese. By then it was already a leader in pizza home delivery with 233 establishments in Spain and a presence in Andorra, Chile, Cuba, Guatemala, Iran, Morocco, Mexico and the Czech Republic.
In 2003, it closed operations in Mexico and France. Characterized for being a company that knows how to adapt to any situation, it has been introduced in ships, shopping malls and, since 2005, in hotels, implementing the Telepizza Room Service, in which its pizzas not only arrived at your home but also in your hotel room.
In 2006, the venture capital fund Permira buys the company, indebting it in order to carry out the operation. In 2007, Telepizza is delisted from the stock exchange and takes full ownership of its shares. The following year, in the midst of the economic crisis, Telepizza would continue to expand to Dubai in that year, and to Colombia in 2010, buying the Jeno’s Pizza chain. This was followed by new branches in Peru, Ecuador, Panama and Russia over the next three years. The truth is that he was not wasting any time.
After being delisted from the stock exchange and in the midst of an economic crisis that still did not seem to end, 2013 arrived, a fateful year for Telepizza. The company begins to lose value and, if we add to this the debt derived from the Permira fund and the costs involved in growing in new markets following its internationalization strategy, the result for Telepizza is a bank indebtedness reaching 529 million euros in 2013.
Between 2013 and 2018 Telepizza was struggling to stay afloat. The indebtedness reached 300 million euros, the company goes back to the stock exchange, and they were still losing money. And in desperate situations, desperate measures: the decision was taken to expand in America, but without achieving the success that the investment funds expected. With a debt that kept growing and after trying to solve it, finally in 2018, Telepizza reached an agreement with Pizza Hut.
In this agreement, the Spanish pizza company sold itself to its competitor, becoming the master franchisee of the U.S. chain in Latin America (excluding Brazil), Spain, Portugal and Switzerland. This type of franchise is a very useful practice for international development. It allows the master franchisee, in this case Telepizza, to open different establishments of the franchisor, Pizza Hut, in order to expand within a specific geographical area. Following this alliance, the group formed by Telepizza and Pizza Hut, later joined by Apache Pizza and Jeno’s Pizza, was renamed Food Delivery Brands in 2021. Thus beginning the “reconstruction” of Telepizza under its new president, Jacobo Caller.
Today, they have more than 1,400 stores worldwide with a presence in 15 countries. In 2022 it celebrated 35 years in the market. It has invested time and money in innovating its image and connecting with its public, in order to reach the younger generations, with the intention of boosting its business.
Continuing with the changes, the restructuring of Food Delivery Brands, the restaurant group that manages Telepizza and Pizza Hut, was announced at the beginning of the year. A restructuring marked by the exit from some countries and the concentration of attention on its key markets: Spain, Portugal, Ireland, Chile, Mexico, Colombia and Ecuador. By 2024, they plan to have 1,332 stores worldwide, that is, almost one hundred stores less than they currently have. With this, they intend to generate more revenue, achieve an increase in ebitda and their most important objective: to reduce the consumption of the company’s financial resources.
On the financial front, they are still struggling to get off the ground. Debts have remained over time, including the recent refinancing of 70 million euros to reduce its debt by 50% that Telepizza has agreed with its shareholders.
Since its birth, Telepizza has been present in the lives of families in Spain. In this advertising spot from 1995, the brand already made reference to the secret of its pizzas and the value of enjoying a pizza with the family, marking Telepizza’s advertising trajectory throughout its 35 years of existence.
Its characteristic slogan, “the secret is in the dough” has been there since the creation of the company. From the factory located in Daganzo (Madrid), almost all Telepizza stores around the world are covered. In this factory, the dough is made with flour, water, salt and other ingredients that the company keeps secret to give it a specific flavor and texture, hence its slogan. Once the dough is made and has passed all the relevant controls, it is sent to Telepizza stores, thus promoting the use of a fresh and 100% original dough in each of its restaurants. After a year, 60 million dough balls leave the factory.
Between 2000 and 2011, they focused their advertising strategy on the quality of the pizzas and “round moments”, referring to those moments when eating a pizza was the right idea: a party at home, a dinner with the family, or eating a pizza after a hard day.
In the following decade, Telepizza campaigns would put the focus on promotions and discounts proposed by the brand, and begin to bet on the online world. Also in 2019, it launches its loyalty program, Mitelepi. This program allows the user to be part of the telepizza community and accumulate “telepicoins” just for registering on the official website and placing orders. It also gives you the possibility to enjoy exclusive offers and promotions depending on the level you belong to: bronze, silver, or gold.
Due to the global health crisis caused by COVID-19, Telepizza launched an advertising campaign highlighting the value of the people who were on the front line during the pandemic and who, unfortunately, general fear meant that they were underappreciated on multiple occasions. This spot attracted a lot of attention and was widely commented in the media, as it gave a lot of importance to the fact of understanding and wanting to help those who are not going through an easy time.
In 2021, according to data from the consulting firm Kantar, it was revealed that the quality of thier pizzas is higher and its products are tastier than those of other brands. But when it came to connecting with the public through advertising, they were not doing so well. Therefore, in their intention to reconnect with their customers by going back to their origins, they launched an advertising campaign full of sincerity in which they made reference to these data: “Our customers love our pizzas, but our ads not so much”. With this, they assumed their mistakes in advertising and began a new stage of communication in Telepizza, in which reaching the younger audience had become a priority.
In 2022, coinciding with its 35th anniversary, they returned to focus on their original slogan, “the secret is in the dough”, betting on digital channels and social networks. In this way, the brand intends to consolidate its long-term strategy. They also aim to create a sense of belonging to the Spanish market.
For the time being, in 2023, they are continuing along the same lines. In their latest advertising spot, Yolanda Ramos and Farid Bechara took part. Both play two cleaning professionals who, after a hard night’s work at the Royal Palace, need to relax and order a pizza delivery. The brand, referring to its beginnings and the pleasure of having a pizza delivered to your door, or in this case, to the door of your workplace, presents the title of the campaign “Long live the dough, that’s the secret”. A secret that since 1987 has spread thanks to word of mouth among consumers, making the brand grow to become a reference in the sector.
Jesús Cubero, the Global Chief Marketing Officer of Food Delivery Brands, in an interview this year, told how the rethinking of the new brand strategy and its communication was beginning to bear its first fruits. With this new tactic, they plan to return to the classic, to the traditional, focusing on giving value to the family atmosphere of the Telepizza stores of those early years when the company did not stop growing and that coincides with the years when the original founder of the company was at the helm.
This does not mean that they are going to be left behind, but keeping in mind the future they are facing and the new generations, they intend to offer a service at the level of what Telepizza means to its customers, both nationally and internationally. Despite innovating, their secret remains the same as always.
Undoubtedly, despite all the adversities it has faced throughout its more than 35 years of history and all the adversities it still has to face, Telepizza is still the reference restaurant in Spain to order pizza at home as it was in the 90s.
Image: Telepizza.
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