TO begin to imagine just how challenging it is for a pizzeria to compete in Jamaica, consider that a diner could get two beef patties and a soda for the same price of a single slice of pizza with just one topping at most establishments.

That’s certainly a bad recipe in a country where per capita income is just US$4,500 ($387,000) per year. Against this background, industry experts say it is very difficult to sustain a pizza parlour that doesn’t possess the critical mass needed to bring cost down and be price competitive in the restaurant industry.

“People believe that you can just open a pizza (restaurant) and do well, but it’s really a tough, tough business,” noted William Mahfood, managing director of the Wisynco Group, which operates the Domino’s Pizza franchise on the island.

“You have to consistently give good service, you have to manage your inventory and at the same time you have to sell at a margin to make money,” added Mahfood, who has been in the business for three years.

The margins on pizzas, insiders say, are razor thin due to the high costs of inputs. They say that’s a major reason why a lot of pizza operations exit the local market within a short while. Swanks, Pepperoni and Pizza Pazza are just some of the names of pizzerias that have come and gone over the years.

Businessman Balram Vaswani, who operated Pizza Pazza along Knutsford Boulevard in New Kingston, described the cost of ingredients as being the “greatest challenge” in operating a pizza parlour.

“The main ingredient in a good pizza is buffalo mozzarella, which is not made in Jamaica,” Vaswani explained.

“When we had Pizza Pazza, we could not guarantee a fixed price for the cheese, so the variation of cost was a problem and you can’t change the prices on a weekly basis,” noted the entrepreneur, who successfully ran the Jamaica News Network before selling it to Radio Jamaica.

Vaswani told Sunday Finance that Pizza Pazza — which was located across the road from the Quad and Asylum night clubs — depended heavily on the late night to early morning consumer traffic because it could not penetrate the lunch time market, largely due to pricing.

“I would say that about 70 per cent of our revenues in that area came from between 11:30 pm to about 4:00 am when everybody was leaving the clubs,” Vaswani acknowledged.

“The lunch traffic was difficult… within a three minute walking distance or less, you had Juici, KFC, Tastees etc,which all offered box lunches (in the region of) $300,” he noted, adding that the fact that Pizza Pazza catered for outdoor diners was another problem because of the heat.

When it opened in 2007, a pizza slice at Pizza Pazza was $214.59, with toppings costing an extra $21.46 each. Add a $70 drink to that bill and it was competing with a meal deal from KFC, a ‘Satisfaction’ from Island Grill and a box lunch or multiple patty meals from Juici and Tastees.

Even today, three years later, two beef patties total only $160, way below what that parlour wanted for a slice of pizza back then.

Renowned Cordon Bleu-trained chef Jacqui Sinclair was concise in her explanation of the Jamaican market for pizzas.

“People have to make serious choices in Jamaica …pizza here is a luxury, not a necessity,” she said, adding that “(Jamaicans) don’t get the same satisfaction in terms of ‘belly full’ with a slice of pizza.”

That said, the pizza businesses that have gone for mass have succeeded, such as Domino’s and Pizza Hut. Domino’s has nine branches on the island while the number of Pizza Huts total five.

Said Mahfood: “The biggest problem (in the industry), as I see it, is with a one or two store operation to maintain consistently good service at the prices that will be fairly competitive. At Domino’s, because we have that scale, we have better costs on the inputs because we buy by the container load.”

Vaswani agreed, saying if he ventured into the pizza business again, among other things, he’d ensure that the business enjoyed a certain level of economy of scale.

“If you have the pizza and you know it’s perfect, quickly franchise the model to get like 14 or 15 locations where you can get the cost of the product down,” admitted Vaswani.

“If I had to re-do my model based on electricity cost and the cost of various things in Jamaica, I would also stick to the best ingredients, lock up long-term agreements in terms of cheese and other stuff that’s guaranteed, use as much local produce and I’d build a brick oven,” he said.