The Story of the 50-Year-Old Pizzaria Donatos

Just when Americans were introduced to pizzas and the pie was becoming a staple food, Donatos was born. 

“My first lesson was, make a good pizza and be nice to the customers, and they’ll line up out the door,” Jim Grote, founder of Donatos said.

As a teenager, Jim Grote was first employed in a pizzeria found in the South Side of Columbus where cutting pepperoni sticks were his tasks. 

Donatos was started in 1963 when an insurance worth $1,300 was purchased by Grote. The name of the establishment had no connection to the founder's name but the Latin word Donatos reflected their philosophy - "to give a good thing."

Superior products, good people and good treatment to customers were their priority in pizza operation and their system include consistency in pie making. 

“We put 100 pieces of pepperoni on our 14-inch pizza. Still do.”

“We’ve got a process for everything from the dough and the crust right down to how you cut it.” said Doug Whitmer, Dnatos franchise owner in Raleigh, N.C.

The first store in Thurman Avenue was built in 1974 after getting all systems right. All of the four children worked with Grote but now only one was left to work there, namely Jane Grote. 

In the 1990's, franchising was opened then Mcdonald's purchased Donatos in 1999 but was acquired back in 2003. Now over 101 franchised locations now and continues to grow around United States. 

So what made Donatos popular over the years? 

Thin Crust pies that used provolone instead of the usual mozzarella was what Donatos were known for, not to mention the square cuts in the pizza and the friendly staff. 

This year, their company is celebrating 50 years of serving pies. They have been on top of the fast-casual pizza industry but they are ensuring they would stay there by implementing a strategy from market research. 

One of the ways CEO Tom Krouse believes in is keeping its principles. 

“a principle-based, prosperous company built to last for 50 years and beyond.” he said.

“Donatos is one of the more original fast-casual pizza players,” said Darren Tristano, EVPt of Chicago food research Technomic and added “But today, we’re seeing a real redefinition of fast-casual pizza.”

In this industry however, fast-casuals serve only fresh, made-to-order food that are usually higher in price range. 

2012 was Donatos' year when the chain was on top of Technomic's Top 150 Fast Casual Chain Restaurant Report. Sales reported to be over $166 million despite its 9 percent drop from 2011. 

Not even Wolfgang Puck came close to Donatos as it reportedly makes a $63 million sale last year with a spot at No. 2 in the list. 

The competition that Donatos feel closer to would probably be Pizza Hut, Domino's, Papa John's and other fast food pizza joints. In addition, more competitive generations of fast-casual pizza chains are challenging Donatos in the industry. 

“There are 15 different, made-to-order, individual pizza concepts in fast-casual,” Tristano said. “How Donatos chooses to acknowledge the trends and move forward is going to be critical to its success in the future.”

At 69, Grote is still working and seems to have no plans in retiring. With its slow growth through franchise and pizza supplying in groceries, the fast casual chain is popularized even better in its differentiated product. 

“We’re the only ones who have fresh mozzarella balls, Asiago cheese, and toppings like cinnamon and almonds,” Krouse said. “People’s tastes are getting more demanding,” 

Fresh toppings, unique toppings and health conscious products are all they have to offer. 

Of course, technology isn't left out as they apply web and mobile ordering processes. 

“We have Web and mobile now, and we are working on enhancements to the process to make it even easier to order online,” Krouse said.

The innovation that Donatos is putting efforts into is widely appreciated by many, especially families that need special diets or big families who are in need of good and fast services. 

All that makes up Donatos number one in their category. 
Posted by Diane Araga, on July 19, 2013 at 11:00 AM