Name a more iconic duo than pizza and beer.
Yum! Brands, Inc. (YUM) knows it's a winning combination and that's why the Pizza Hut owner is piloting a new beer and wine delivery program in Phoenix, Ariz. The program debuts Tuesday, Dec. 5 with beer offerings. Wine will be available in that market in January and then the company hopes to expand the service to other metro areas.
"Beer and wine are the perfect combination to pizza, and we can serve as a one-stop shop because we can do that all in-house, no added fees, no extended time." said Yum! Brands spokeswoman Stacy Lynn Bourgeois.
Customers will be able to order alcohol with or without pizza, she told TheStreet. In Phoenix, the first four offerings are Budlight, Budweiser, Shock Top and local favorite Kilt Lifter for $10.99 each for a six-pack. All four brands are owned by Anheuser Busch Inbev NV (BUD) .
Pizza Hut will use its existing delivery program to support the service, Bourgeois said. Delivery fees will depend on the restaurant, usually varying between $2 and $3. The pizza chain will be the first fast casual franchise to offer booze for delivery, but it will not extend its alcohol selection beyond beer and wine, the company said.
Delivery workers in Arizona have been trained to ask for IDs during delivery. Prices will vary depending on the market.
"I'm really excited about the fact that they're doing it themselves," said John Gordon, a restaurant analyst at Pacific Management Consulting Group. "The restaurant industry is still grappling with delivery."
Adding beer and wine to the mix of offerings, he told TheStreet, will drive the average ticket higher while the cost of delivery remains the same per order. For Jimmy John's Franchise, LLC, for instance, the cost of delivery per order is about $10.
While chain restaurants at large have struggled in recent years, Yum! has done considerably well under a highly franchised model and the leadership of a new CEO, Greg Creed. Its most notable success story is Taco Bell, whose brand strongly resonates with Millennials. Pizza Hut and KFC, meanwhile, are in earlier stages of a turnaround.
In the third quarter, Yum! posted same-store sales growth in all three chains. Pizza Hut saw a 1% uptick in same-store sales while boasting a new delivery algorithm that improves timing by six to seven minutes.
Pizza Hut beer will be delivered in specially designed coolers, Bourgeois said, similar to its new heat retaining pizza delivery bags unveiled in September.
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