“Our goal now is 10,000 pizzas a day”: How the pandemic—and $13 million—is turning General Assembly into a frozen-pizza powerhouse

“Our goal now is 10,000 pizzas a day”: How the pandemic—and $13 million—is turning General Assembly into a frozen-pizza powerhouse

Lalani, at his Entertainment District pizzeria Photo courtesy of General Assembly Pizza

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In 2017, Toronto restaurateur Ali Khan Lalani opened General Assembly Pizza, one of a whole whack of premium pizza restaurants in Toronto. Last week he closed a $13 million round of funding, step one in transforming a local pizza brand into a global empire. Here, he tells Toronto Life about a supremely successful pandemic pivot, how downtown pizza tastes differ from the burbs’ and why the future is frozen.

Last week, General Assembly Pizza closed a $13 million Series A funding round. That seems like a crazy amount of money. What are you doing with it?
It’s definitely not something I would have imagined at this time last year. The funding is financing our transition into a food tech company. In September we launched our e-commerce platform for our monthly pizza subscription service. The goal was to get 100 subscribers in the first month, ideally 250 the next. Instead, we got 50 on the first day, 500 by the first month and over 1,000 subscribers in eight weeks. Over that period we were doing everything out of the restaurant—making the pizzas, packing the pizzas, delivering the pizzas—and we realized that wasn’t going to be sustainable. If we wanted to keep going we were going to have to level up our production, so we had an internal meeting where we asked ourselves “Are we in or are we in?” We needed to try to raise some capital and double down on becoming an e-commerce company.

And obviously that went well. Thirteen million!
When we kicked off our fundraising in December the goal was to raise about $3.5 million. At that point we had almost 2,000 subscribers, so we were thinking of building a production facility where we could make 5,000 pizzas a day. But then the numbers kept going up and up, which meant that we would need an even larger facility—which meant raising more money. We were lucky that there was a huge amount of enthusiasm with our investors and we ended up over-subscribed. Our goal now is 10,000 pizzas a day or up to 20,000, assuming we get to that point.

Is that a safe assumption?
Definitely. We are excited to be in expansion mode. One of the great things about being in e-commerce is that we are able to really dig into and follow the data. We know, for example, that about 55 percent of our customers start their subscription with the base package—four pizzas a month—but by month two, more than half of those people move up to six or eight or 10 pizzas, so that’s incredibly encouraging. We have also followed data to determine the locations with the most demand. At first, our subscription service was servicing only M postal codes, but we started a waiting list on the website where we asked people to put in their postal codes. So we knew right away that our second zone would be in the L postal code, so the GTA. This week we are launching in the N zone, which includes Kitchener, Waterloo, Cambridge, Guelph, London and Stratford.

What can data tell you about the diverging pizza tastes of 416ers vs 905ers?
The most popular pizza in the M postal code is the margherita and the most popular one for those with L postal codes is our Loving Cup, which is cheese and pepperoni.

I guess that means there are more vegetarians downtown?
I think that’s probably the case.

 

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Let’s go back to the beginning of the pandemic. Were you as worried as most restaurateurs?
Absolutely. We temporarily closed our restaurant like so many others, and it was just a really sad and scary time. I had to lay off more than two thirds of my staff—people who have kids and rent and mortgages, so that was a lot of pressure. At the same time, we were lucky because we had already been thinking about making a frozen pizza product for the better part of a year—we were always just too busy to get started, or at least that’s how it felt. Looking around our empty dining room we thought, okay, let’s get to work. First we started selling kits for make-at-home pizzas—dough, sauce, toppings—and those did pretty well. Pizza really is built for takeout and delivery, which put us in a fortunate position compared with other restaurants. By the first week of April, we had reworked five of our most popular pizzas as frozen pizzas. We gave them out to chefs, sommeliers, friends, family members—anyone who would give us feedback. The plan, at that point was to sell them out of our restaurant. But I was at the grocery store one day and I noticed that there were two products that had limits on how many customers could buy: toilet paper and frozen pizzas. That was sort of an a-ha moment. I went to talk to a bunch of grocery store owners who could barely keep pizza on their shelves, and the reaction was very positive. They were like, “How quickly can you drop them off?”

Can a pizza cooked in a conventional oven really stand up against a Neapolitan stove?
Obviously the oven at our restaurant is far different than the average oven. Our goal is the best quality frozen pizza experience at home, done in under 10 minutes for roughly $10. We knew if we just took already-cooked pizzas and packaged them up for frozen, that wasn’t going to work. So we started asking questions: What level of par cooking did we want? Was there enough leoparding on the crusts? Because these pizzas are being reheated in someone’s home oven, do we need more sauce? If we need more sauce, do we need more cheese? Do we need to cut the mushrooms or jalapenos thinner? There was a lot of trial and error and we probably went through about 500 pizzas, but I think we got it.

Where did the idea for the world’s first pizza subscription service come from?
That is an idea that materialized one night when my wife and I were making dinner from a GoodFood meal box. We were trying to decide if we should make the tacos or the salmon, and then suddenly it just hit me. I had some General Assembly pizzas in my freezer so I took them out, put them in the GoodFood box and started thinking about how we could use the same model. My wife just looked at me like, “Are you thinking what I think you’re thinking?” I was up until 4 a.m. that day.

Who do you see as your competition? Meal subscription services? Dr. Oetker? 967-1111?
Our competition is any other pizza brand that is delivering hot pizzas, or frozen pizza lines at the grocery store. We think our product can take market shares from QSRs—Pizza Pizza, Dominos, Little Caesars—and also from the incumbents on the shelves that have been doing frozen pizzas the same way for years—the ones made with 40 different ingredients. I think people are ready for something that tastes better, looks better and exists at the intersection of value and quality.

 

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What’s to stop all the other guys from stealing your subscription model?
Absolutely nothing. This is a question I contemplate three times a day. If some of the big chains tried to implement a subscription service, they might end up with some pretty upset franchisees. I do think we have an advantage for doing it first and doing it well. We put a lot of effort into bringing hospitality to e-commerce. Feedback on our customer experience has been extremely positive, so hopefully there is some loyalty there.

Did you do anything to celebrate after last week’s windfall?
Believe it or not, that night my family and I had three GA pizzas for dinner. Of course I was excited—and I’m still excited—but the hard work is really just beginning. We were fortunate to raise that kind of capital, now we have to put that capital to work in a way that is responsible.

Your current expansion is within Ontario, but where can you imagine this going? Are we talking world domination?
The first step is the new facility. We are just finalizing the lease now, so I can’t give specifics, but it’s in the west end—the Etobicoke area. We’re expecting to make our first pie there by June 1. We have aspirations to be a national brand by the end of the year, a North American brand next year and a global brand within four years.

Those are some grand ambitions. Comfort food has been the one and only food trend for the last year. Do you worry at all that once everyone is vaccinated and coming out of their pandemic haze, carbs and cheese will fall out of favour?
I think we’ll see a shift when people are able to come back into their favourite restaurants again, but as it relates to our product, I don’t think much is going to change in terms of consumer demand. The frozen pizza business was ripe for disruption and innovation and I think we’re only getting started.