Pizza dough becomes rising force in 2012 politics
Romney and Cain are just the latest to spend their pizza money to get a bigger piece of the political pie.
By Jason Notte, TheStreet
With pizza industry alumni using their dining and delivery experience to think outside the box, pizza has a rising political profile.
Two candidates in the field pursuing the Republican party's 2012 presidential nomination have long, stringy ties to the pizza industry and are just the latest pizza alumni to make their presence felt in American politics.
The pizza industry brought in $36 billion in 2009, the last full year for which complete statistics are available, and provides a nice resume item for candidates pushing for economic growth. But don't take the link too far. The industry declined 1% from 2008 to 2009 and has seen its share of struggles in the year and a half since, making relying on pizza for popularity at the polls look as dumb as calling it "'za."
"Politicians are not attracted to pizza any more than 93% of all Americans who have fallen in love with the world's most perfect food," says Steve Green, the publisher of pizza industry magazine PMQ. "However, there are at this time a good number of pizza alumni who have become politically active because the pizza industry is a fabulous incubator of talent."
Republican hopeful Herman Cain's entire campaign is held together by dough, mozzarella and tomato sauce. While serving as an executive with Pillsbury in the early 1980s, Cain caught the company's attention by taking over 400 Philadelphia-area outlets of Pillsbury's then-subsidiary Burger King (BKC) and transforming them from the chain's least profitable to its most profitable. Pillsbury asked him to do the same with Godfather's Pizza in 1986 and named him chief executive of the foundering chain.
That success and Cain's moonlighting gig as the chief executive of the National Restaurant Association earned him a spot on Bob Dole's 1996 presidential campaign as an economic adviser. They also funded his own campaigns for a Georgia Senate seat in 2004 and for the presidential nomination in 2000 and this year. To this day, however, they still haven't earned him public office.
That's the key difference between Cain and his pizza-primed GOP rival former Massachusetts Gov. Mitt Romney. The latter was still with Bain Capital when it bought a 93% stake in Domino's Pizza (DPZ) for $1 billion in 1998. He's used the profits from that and other Bain deals to back both of his presidential campaigns.
"The pizza industry is a microcosm of business. All of the business principles can be learned and mastered in the process of providing customers what they want for a fair and sustainable price," Green says. "Our industry is very competitive because it has such low barriers of entry and, like their political views, every good pizza operator believes their pizza is the best."
The industry is also not all that it once was. The NPD Group counted 68,992 pizza shops in the U.S. in 2008 but in spring of 2010 said the number was at 65,859. Even PMQ thinks that number is off and puts the ranks closer to 64,950. Meanwhile, chains including Round Table Pizza, Sbarro and formerly pizza-centric Uno Chicago Grill all filed for bankruptcy within the past two years, with only Uno emerging.
Of those, the Top 50 pizza chains own 42% of pizzerias and take in 48% of the sales. That's not exactly great news for pizza in general, as fast-food industry publication QSR ranked only Pizza Hut (YUM) among its top 10 and added only three more -- Domino's, Papa John's (PZZA) and Little Caesar's -- in its Top 30. When Consumer Reports asked subscribers to rate pizza chains this month, the highest scorer was Papa Murphy's Take 'N' Bake Pizza, of Vancouver, Wash. The chain not only scored a lukewarm, left-in-the-delivery-guy's-car 7.8, but somehow managed to beat such rivals as CiCi's and Sbarro without cooking or delivering its pies.
Pizza seemed to have a lot more power in the greasy, gastronomically questionable days of the 1980s and '90s, and it comes as little surprise that much of the industry's political power stems from that success. For example, the man who sold Domino's to Bain Capital knew a little something about political influence. Domino's founder Tom Monaghan used his pizza fortune to lobby for anti-abortion causes and anti-abortion Supreme Court appointments. He also funded Catholic causes including Ave Maria University, the Catholic community of Ave Maria, Fla., and Ave Maria Mutual Funds, which feature companies whose operations are in line with Catholic teachings.
Monaghan also briefly owned the Detroit Tigers before selling them to other politically active pizza entrepreneurs. Mike Ilitch and his wife Marian founded Little Caesar's in 1959 and came up with the "Pizza Pizza" idea of two pizzas for the price of one competitor's pie back in 1979. The proceeds helped the Ilitches build a sports empire that includes the Tigers and NHL's Detroit Red Wings, which have won four Stanley Cup titles since the couple bought the team in 1982 and have appeared in the playoffs for 20 consecutive seasons dating back to 1990-91.
Their pizza profits have also earned them some influence in political circles, with Mike and Marian making campaign contributions to President Barack Obama, New York Democratic senators Chuck Schumer and Kirsten Gillibrand, former New York City mayor and Republican candidate Rudy Giuliani and the Major League Baseball and Wendy's/Arby's Group (WEN) political action committees.
Pizza money's a proven commodity on the political sidelines, but can it also be the tip pizza industry alumni-turned-politicans need to deliver an election win? Perhaps this year's hopefuls should ask Pizza Hut president Mike Rawlings, who was sworn in as mayor of Dallas last month.
"If you can run a pizza chain, how hard can it be to run a country?" Green says. "A CEO's job is not to make pizza, its to make money. You always have to balance the budget. That's the only way you get reelected."
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
These companies won't soar like other plays in the sector, but they make for great income sources.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.