Noble Roman's expands grocery offerings to boost bottom line

Back to TopCommentsE-mailPrintBookmark and Share

You can never count out Noble Roman’s.

The Indianapolis company founded in 1972 has evolved from a chain of sit-down family restaurants to a franchisor of small pizza shops in hospitals, bowling alleys and gas stations, to a dual-brand concept offering pizza and subs. Now, it’s gaining ground in the grocery business.

Noble Roman’s franchisees continue to operate about 800 stores in a variety of formats, but the chain’s growth engine has shifted to grocery. A new take-and-bake pizza program, launched in 2009, offers pies in more than 550 grocery stores including Marsh Supermarkets.

Take-and-bake accounted for a whopping 12 percent of the company’s revenue in the fourth quarter of 2010, up from 2.5 percent in the first quarter. And in January, Noble Roman’s added deep-dish lasagna, cheesy breadsticks, pasta sauces and cheese tubs to its grocery lineup.

Noble Romans products on Marsh supermarket shelf. Noble Roman’s has been selling products in more than 550 grocery stores. (IBJ Photo/ Perry Reichanadter)

The grocery store program is based on licensing agreements with the stores, which buy products from Noble Roman’s at a markup in lieu of royalty payments, said Noble Roman’s CEO A. Scott Mobley. Stores can offer the products with a minimal initial investment, and existing deli staff members prepare the pies with the same ingredients used in the chain’s restaurants.

The program has been a hit with customers of the 24 Buehler Foods stores in Indiana, Ohio and Illinois, said Linda Luchini, the chain’s sales manager for deli and bakery.

Luchini has presided over numerous in-store pizza programs since the 1970s, but none has caught on like the Noble Roman’s offering. The stores sell 12-inch pies for $5.99 each, or two for $10. The price point keeps the store competitive with $5 pies from Dominos and Pizza Hut.

Lasagna goes for $7.99, and jars of pasta sauce—the slowest seller—go for $5.99 apiece. The pizzas net a roughly 40-percent margin for the grocery stores. The top-selling locations are in Ellettsville and Jasper.

To get the Noble Roman’s kiosks up and running, Buehler spent about $250 per store, for signage and a shrink-wrap machine to cover pizzas.

“This one is the best quality, it’s very easy, the packaging looks great,” Luchini said.

Supermarkets love to stock familiar dine-in brands on their store shelves since the products tend to deliver stronger margins, said Neil Stern, a senior partner at Chicago-based McMillanDoolittle LLP, a retail consulting firm.

On a recent grocery store visit, Stern started taking photos of every restaurant brand he spotted on the shelves. He counted 40, including Cinnabon, White Castle, Boston Market and Taco Bell. Stern noted that California Pizza Kitchen gets 35 percent of its profits from royalties from its line of frozen pies, made by Kraft Foods.

“The trend is moving more toward ‘make it’ or ‘take it,’” Stern said. “The questions are, how do you get the product supplied, what is the value of the brand, and does it help sell for a higher price?”

Besides the obvious revenue, grocery stores get another weapon in the battle for “share of stomach,” and the restaurant chains gain brand awareness. The risk for restaurants is that grocery sales could cannibalize dine-in sales.

For Noble Roman’s, selling pizzas in grocery stores was born out of necessity. During the recession, fewer families visited Noble Roman’s restaurants, and financing dried up for potential new franchisees.

“Our corporate culture is very nimble and can-do,” Mobley said. “I think these strengths are what allowed us to respond so quickly to circumstances.”

The grocery business is the primary reason investing guru John Gay, who writes The Quiet Investor newsletter, recommended Noble Roman’s shares in his February edition.

He believes grocery sales could contribute 15 cents per share in profit, substantially above the roughly 2 cents per share royalties and fees from franchises contribute.

Gay is calling for Noble Roman’s shares to triple, from a recent $1.02 per share, in the next three years.

“Pizza is America’s national food of convenience,” Gay wrote. “To have 500 grocery stores sign up in one year for Noble Roman’s new program is a good reflection of this passion, and acceptance by another 500 this year is probably a likelihood.”•


  • Noble Romans
    Anybody know where I can find the Noble Romans cheese dip around the Indianapolis area?

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. why oh why does this state continue to elect these people....do you wonder how much was graft out of the 3.8 billion?

  2. i too think this is a great idea. I think the vision and need is there as well. But also agree with Wendy that there may be better location in our city to fulfill this vision and help grow the sports of hockey and figure skating in Indy. Also to help further develop other parts of the city that seem often forgotten. Any of the other 6 townships out side of the three northernmost could benefit greatly from a facility and a vision like this. For a vision that sounds philanthropic, the location is appears more about the money. Would really like to see it elsewhere, but still wish the development the best of luck, as we can always use more ice in the city. As for the Ice growth when they return, if schedules can be coordinated with the Fuel, what could be better than to have high level hockey available to go see every weekend of the season? Good luck with the development and the return of the Ice.

  3. How many parking spaces do they have at Ironworks? Will residents have reserved spaces or will they have to troll for a space among the people that are there at Ruth Chris & Sangiovese?

  4. You do not get speeding ticket first time you speed and this is not first time Mr.Page has speed. One act should not define a man and this one act won't. He got off with a slap on the wrist. I agree with judge no person was injured by his actions. The state was robbed of money by paying too much rent for a building and that money could have been used for social services. The Page family maybe "generous" with their money but for most part all of it is dirty money that he obtained for sources that are not on the upright. Page is the kind of lawyer that gives lawyers a bad name. He paid off this judge like he has many other tine and walked away. Does he still have his license. I believe so. Hire him to get you confiscated drug money back. He will. It will cost you.

  5. I remain amazed at the level of expertise of the average Internet Television Executive. Obviously they have all the answers and know the business inside and out.