Papa Murphy’s leader doing more than raising dough
The future of Papa Murphy’s, the take-and-bake pizza chain that just completed its IPO, rides on CEO Ken Calwell’s leadership and his plan to win the 21st-century pizza wars.
Latest move: In May, completed IPO raising $64 million for company at $11 per share; stock now trading at $8.70.
Career: President and CEO at Papa Murphy’s since 2011. Previously chief marketing officer and chief food innovation officer of Wendy’s International. Earlier posts include chief marketing officer at Domino’s and senior director of marketing at Frito-Lay.
Cash compensation: $597,000 in 2013
Stake in company: 423,344 shares, about 2.5 percent
Source: Company filings
The future of Papa Murphy’s, the take-and-bake pizza chain that recently completed its IPO, rides on CEO Ken Calwell’s leadership and his plan to win the 21st-century pizza wars.
Calwell, 52, a former competitive triathlete, locks his eyes on you and wrestles your questions to the ground. A Midwesterner, he exudes the region’s charm and adeptly unpacks anecdotes.
Then he bounds from his conference-room chair to command a big-screen presentation. Speaking in rapid-fire fashion, wiry arms waving, he proceeds to reveal what’s really going on in the $45 billion pizza market and why Papa Murphy’s, headquartered in Vancouver, Wash., is on a path toward pizza-world conquest.
A datahead, he’s as quick with industry statistics as he is with anecdotes.
“Fifteen to 20 percent of Americans say they’re pan-pizza lovers. We didn’t have a pan pizza before I got here,” says Calwell, who, in 2011, took the helm of Papa Murphy’s International, with more than 1,400 stores in the U.S., Canada and the United Arab Emirates, all but about 5 percent operated by franchisees.
He also knows which pizza chain is putting what on your pizzas, and how much. He snaps off another stat: Papa Murphy’s’ “base pepperoni pizza has about 30 percent more cheese” than those of the prime competitors: Pizza Hut, Domino’s Pizza, Papa John’s Pizza and Little Caesars.
Calwell, who previously held management positions at Pizza Hut and Domino’s, is working to vault Papa Murphy’s, a popular brand in the Pacific Northwest, onto the national scene.
Problem is, naysayers stand in his way.
Some franchisees have sued the company in Clark County Superior Court, alleging it misrepresented sales volumes, made false representations to them and charged excess advertising fees, among other things.
The company went public in May, making its costs and profits public for the first time. And while Wall Street analysts remain bullish, skeptics say Papa Murphy’s is weaker than it admits.
Calwell takes all of it seriously. But he says his is a growth company focused on the long term: stores in new markets, higher-performing stores, more sales, market-share expansion and, eventually, profitability.
“Sometimes you’ve got to be patient with these things,” he says.
Jayson Tipp, senior vice president of marketing, strategy and technology, calls Calwell “the best boss ... (a) real human being.”
Tipp, whose corporate-management experience includes stints at Redbox and Starbucks, says Papa Murphy’s can prove the naysayers wrong.
“I can’t tell you what is going to happen in the future, but we’re going to work our asses off to win.”
After Calwell grabbed the steering wheel at Papa Murphy’s, he set about turning it onto a new path: to not only beat back its four bigger competitors but to grow itself into a national brand capable of its own national advertising.
So how does Papa Murphy’s win the 21st-century pizza wars? It doesn’t hurt that the company enjoys lower labor costs than its competitors. And that’s partly because Papa Murphy’s stores close by 9 p.m., while its competitors stay open until the wee hours of the morning.
But those competitors are after up-all-night, pizza-hungry young males, Calwell says, while Papa Murphy’s focuses on families who cook their pizzas well before 9 p.m.
“Young males aren’t big on using their ovens,” Calwell says. “Sometimes they use their ovens for storage.”
Yet strategic changes in price and product offerings, and new performance measures and technological upgrades — all pushed by Calwell — are the bigger parts of Papa Murphy’s’ move to dominate more turf.
As Calwell has diversified the offerings, he’s also brought stores under a five-star rating system. The idea is to do better by consumers, drive up sales, reward store owners who meet the goals and coach those who struggle.
“I don’t want it to be ‘Everybody gets a trophy,’ ” Calwell says. “I want it to be like ‘You have to earn it.’ ”
Next up: a makeover of Papa Murphy’s stores to strengthen the message that the company uses fresh ingredients and cooks its dough at each store — complete with dough beater placed in full view of customers.
Not everybody’s on board with the changes.
Last month, Forbes magazine published a story about a survey, released in December, of more than 300 franchisees who control more than 1,000 of Papa Murphy’s’ about 1,400 stores.
Forbes reported that the survey, conducted by the Papa Murphy’s Franchisee Association, “paints a picture of owners unhappy with how the chain deploys advertising dollars, designs ad campaigns, determines product pricing, helps floundering stores and receives franchisee feedback.”
Tipp says the survey is a months-old snapshot that, not surprisingly, suggests some franchise owners have been uncomfortable with some of the changes. The company responded, he says, by visiting and talking with franchisees.
Calwell strikes a tone that’s equal parts pragmatic and optimistic. And he grounds his rebuttals in the language in which he’s so fluent: data.
Papa Murphy’s has had “13 straight quarters of same-store sales growth,” he says. “I’m growing market share versus my competitors.”
Of the doubters and the short-sellers, Calwell says, “I can’t do much about that directly, other than put my nose down, build the business, build the owners profitability, and I think the results will speak for themselves over time.”