Dominos CEO: Pizza, pineapple, and courage

Now, this is going to be a fun conversation. We aim to settle the biggest pizza debate ever. Is it okay to have pineapple on pizza? Should you use fork and knife? And lastly, will he join me to the world championship in pizza in Italy?

Tune in.

Well, hi everybody. I'm super happy. I'm here with Russell Weiner, the CEO of Domino's Pizza. Very welcome.

Pineapple is absolutely included. There are 34 billion ways to make a Domino's pizza.

What makes a good pizza for you?

And so why stretching is so important is unless, you know, if you have your center that's too thin, or what have you, you can really have, look, like. I said before, anything with dough, sauce and cheese is going to taste good. But we want the ingredients to be in the right place. We want the pizza to be crunchy and not soggy. And so those are all the things that we look for.

So, like me, as an example, so like I told you, for me, I'm a pepperoni pizza guy. But I remember when we were working on our specialty pizzas, my wife's a vegetarian. I worked with our folks in the test kitchen. I said, you know what? We need a vegetarian pizza that I can eat with my wife.

And our vegetarian pizza is my second favorite to pepperoni on the menu. And so we really have something for everyone. And I urge people, the beauty of Domino's is you can mix and match, even within the pizza. So try something you've tried and try something new.

The next steps for pizza is really, I'd say, there's something that everybody's doing and there's something that pizza is doing. If you run a restaurant today and you're running the scale, you've got to be working with big data, data on your customers and data on how to optimize your operations and using AI around that. We could talk about that if you want. And that's what you're seeing in general, the restaurant industry. Within pizza, folks are starting to do what I talked that Domino's did a while ago, which is launching items that go with pizza.

that may be a veto vote. So you've seen a lot of single serve sandwiches and items like that that have been launched recently.

And so I think, while we will always be, technology will always be an enabler and we're always going to be at the forefront, we have to be at the forefront of deliciousness. Technology can support that. But I think what we've seen is when we spend too much time talking about technology, even though we have the best pizza in the business, we don't get credit for it. And so today, this is one of the first interviews I'm having, where I still want our amazing team to get credit for all the technology we're going to do, and we're going to continue to lean in. But if we don't drive deliciousness, if we don't have people thinking of us as a pizza company, that what technology is, is an enabler.

All we want as a pizza company is for the product to be great, for the service to be great, and technology is a part of that. But it's part of us being fanatics about the pizza experience.

And the boxes were so sturdy at Domino's because, you know, we were a delivery company. And so boxes need to be piled on top of each other without hurting the product. The boxes were so sturdy that we would make furniture out of them. So my end table were five pizza boxes on top of each other. Our TV was out a bunch of pizza boxes.

This was in college. And so, you know, I talked to college friends and they say, wow, this Domino's thing was meant to be, you know, a long time ago. So the boxes have to be sturdy, but they're also, it's all about quality. And so there's box that enables the product to stay hot while not being soggy. And so boxes are critical to us.

Now, because of all the boxes we do, we also want to make sure we're doing as much as we can to minimize our impact on the environment. And so 70% of the materials used in our boxes are recycled.

Are you fast?

They would fold the boxes. All the boxes would be folded. The pizza would come out of the oven. We'd unfold the box, put the pizza back in and then refold it. So three times.

During COVID, we had some real volume pushes and we had some shortages on people. And so we completely redid our circle of operations. One of the things is boxes. So even someone like me now can fold a box quick, because we don't pre-fold, unfold and refold. All our boxes are flat outside of the oven.

When a product comes out, you put it on a flat box, you box it around the pizza and then it goes out. So it's only one fold, and it's a significant time-saving. Makes the job easier too.

Yeah. And a good number of our franchisees were running below break even at that point. And so, when we looked into all of the opportunities, one of them was the taste of the pizza. But I'll tell you the other one, this is a really piece of insightful research. A lot of people don't do this, but I'd urge you to.

There's how something tastes, and then there's how the brain perceives it. And so one of the best things we did, and this was just an accident one day, I asked someone to do this in research, is we took our pizza and we put it in a competitor's box. We put a competitor's pizza in our box. So not only did blind, did our pizza not taste as good as the competition, wasn't a huge difference, but it wasn't as good. But the bigger thing was the brand issue.

We put our pizza in somebody else's box and all of a sudden it tasted better and vice versa with theirs. And so the biggest thing with the pizza turnaround was not just changing and improving the product. It was a marketing behind it. I think the marketing was the bigger piece of it, because we had to change, you know, 50 years of perceptions around the brand.

This is 15 years ago, Google. And I Googled new and improved and I got 14 million hits. And I realized we can't just say this is a new and improved Domino's pizza. Everyone says new and improved. That doesn't mean anything.

And so how do you get people to really listen? And we started throwing around this idea called tensions. And the idea here is if you understand the tensions in your brand and you understand the tensions in society and you can address those two together, you've got a big idea. And so the tension in our brand back then was we were a pizza company and our pizza didn't taste very good. That was kind of a secret we weren't telling everybody.

Not that people will walk in the hall saying, oh, I know, our pizza doesn't taste good. But in theory, when you think about the tension, this was a pizza company sitting on a pizza. They knew they'd get better. Well, what was going on in 2009?? That was when the banks were going under, the CEOs of the car companies were flying down to DC to ask for bailouts.

And so what customers were telling us? the tension was in their life is. I can't trust anybody anymore. Whether it's the companies, the banks, nobody's telling me the truth. So we felt like, all right, well, I know, we're just a pizza company, but if the world wants to hear the truth and we have a truth, that's pretty harsh, we will be doing something that everybody wants all the pillars of society to do, even though we're just a pizza company.

And that'll get people talking. And that's what happened. So we went on air with this background, with these tensions of everyone in the world seems to be lying to me, kind of the American consumer thinking that. And we went on, we told them the truth. And, more importantly, we did something about it.

And it was the most amazing experience to be a part of. We were three days away from running out of pepperoni. We sold so many pizzas. We were all going out and working the stores. And that was just the.

I mean, we didn't say. we didn't say that we.

X is over here. Well, you want to save money. So what you do is you take some ingredients, change them around, and you say, is the new product X, does it statistically taste? the same? It does.

But then you do a statistics on that one and you innovate on that one. And all of a sudden, five generations later, this product does not taste like this product. And so what we did not have and we have now is a gold standard.

Any change we make has to be better than the gold standard. And what had happened over time is from a cost perspective and sometimes even just to enhance the quality of the delivery, the product changed. And it wasn't like we were significantly worse than the competition, but it wasn't where it needed to be. And I said, this perception was there about us. So yeah, we went on.

It's one of the best scoring ads in the history of, certainly of QSR, where we went out there and we said, hey, actually, we had customers do it. We showed customers the pizza. We talked to them about the brand and we showed what they said about the pizza. And then what we did was, using some reality TV techniques. We surprised them at their house with a new pizza, showed them what they said about the pizza and said, hey, what do you think?

And people just were blown away by the transparency of it. And then we had all this other stuff online. And tell me, I get really excited about this campaign. Did you do anything internally?

And so we felt like we were prepared there from a risk mitigation standpoint. But the other piece was we had franchisees. We had franchisees who had put their heart and soul and their life blood into this brand. And we wanted to make sure they came along with us and they understood why we were doing what we were doing. So we did a couple of things.

One is, we actually went out and did a roadshow. We had a blind taste test of the old product versus the new product. And literally, I remember to the day, literally only one person. And nobody knew what the old one was. It was A and B, or C and D, or whatever it was.

Only one person liked the old product better. And so we got their buy-in. And once they were all in, we were able to go for it. So it was a great example of partnership turning around a business. One place where your business hasn't worked particularly well is Italy.

Well, I think a couple of things. One is having the right partner. For example, I look at our China business now and it's on fire. It was not that way with our first partner. And so you got to find the right partner.

And you got to make sure you launch the product that's right for that environment. When we look back into what we did in Italy, the decision was made to launch a product that tasted more like an Italian pizza versus embracing really who we are. And so Italy is a huge market for us. At some point, I'm sure we'll give it another shot. But when I look back into, maybe, why that didn't work, I think those were two of the larger reasons.

Right. Your pizza was too Italian. Haha. Well, if you don't love who you are, why should you expect anyone else to love you?

Changing tacks a bit here, what is it that drives you personally?

And some of the best individuals and friends I have in the world are here, including our franchisees. And so at this point, my feeling is I am both actively trying to drive the business today, but, more importantly, leave it in a great place for the folks who are coming behind me. Because I know a lot of these people. So you may have a lot of CEOs saying, I'm working towards the future, because they know and look, I'm going to be doing this job for a while. But they know at some point, when they retire, they're going to still be stockholders.

I'm a hard holder in Domino's Pizza.

So that's a real big piece for me. And then outside of work,

just trying to do what I can, with local and national charities, giving back, teaching, those types of things are just fulfilling. Because at this time of your life, you realize your kids will never listen to you, no matter how old they are. But for some reason, when you present to other people and you give them input, they listen to you. So that's fulfilling as well.

I think there may be a couple of ways to do these jobs. One is through

intimidation. We've all had those bosses. And the other is taking other people with you. Now, taking other people with you doesn't mean it's all hugs and happiness. Sometimes you're going to have.

clear, transparent, sometimes tough conversations. But I've always tried to. Because in my career, I'm sure you too, you've had bosses that have and haven't. I like to treat people the way I would want to be treated. And that's something that we make sure.

that is part of our training program and part of what our leadership team does on an everyday basis.

And so I think it's all about keeping that perspective. What I am able to do because of my time here at Domino's is I want to be part of Domino's. I want to make Domino's better. And so what I'm able to do when decisions come my way is really just say, hey, you know what, if we're doing the right thing for the business, then that's the right thing for Domino's pizza. And that's freeing.

I think a lot of CEOs are, believe me, I know you're an investor. We care about what our investors think. But I think what investors want is they should want a CEO and a leadership team that sometimes doesn't care what they think, as long as it ends up in a better result. And everything we do here is with the desire to make Domino's better.

Why? Let me talk to you a little bit about why. And when you talked about leadership principles, you know, so much of what I learned was from her. There were other, obviously, people along the way. She was your boss at some stage?

She was my boss at Pepsi. So I worked at Pepsi for 11 years before I came here. And she was my first boss. She hired me in. And at Pepsi, this was during the dot-com boom.

And so all these public companies or companies that were going to go public are trying to hire Pepsi people to be in their business.

There's a whole other story about how I got into marketing, because I never took a marketing course in my life. And the first part of my career was trying to compensate for that and get over to do marketing. And C. kind of gave me that chance. She hired me from another place.

And I was running marketing in their food service division, which not very sexy from a marketing perspective. But anyway, what I was saying is all these people were leaving to go to these startups, internet startups. And I was maybe working for C. for about four or five months. And I think they were running out of brand managers.

So they said, hey, who's got someone who they can move over to be brand manager on Pepsi? And she brought up my name. And very few people, she was starting a whole new part of the organization. Well, four months into her role, give up somebody. And that changed my life, changed my career.

She then became chief marketing officer at Pepsi and brought me over to be vice president of Colas, which is a big job there. Well, before I think most people would have thought I was ready. And then, lastly,

when Domino's was looking for a chief marketing officer, I guess I could say this now, because it's 15 years ago.

They actually wanted her. They kept calling her and calling her because they wanted a sitting chief marketing officer. And she said, I'm not going to do it, but I got the guy for you. And they didn't want to interview me, but she got them to interview me. And obviously that brought me here and changed my life.

So I think on the personal side, that's one piece. On the other side, on the business side, I'd say Dave Brandon, who's our, and I'm not just saying this because he's our chairman. I'm going to give you a really clear example about why that's the case. So I told you, we launched this new pizza. We went on air with this really controversial, it seems, now maybe not, but really controversial campaign.

When I pitched the idea to Dave, what I didn't know at the time was Dave was planning on retiring from Domino's and he was going to go work at the University of Michigan. He played their undergraduate on the football team. He was going to be the director of athletics. I would say nine out of 10 CEOs, when you bring them a controversial idea, that they can only be on the bottom. So if this controversial idea didn't work, Dave would have been gone.

He would have been the guy who screwed up Domino's. Maybe me, but he, and he would have been much better off telling me, hey, that new and improved idea that you said wasn't really big, just do it. We'll be up 1% and he could go on his way because he will have turned around the company. And he approved it with nothing to gain. I still say now to this day, I get credit, certainly our former CEO, Patrick Doyle, who's another mentor of mine, should get credit, but that never would have happened if Dave was worried about anything other than the success of this business.

And so those are two personal and.

I think you got to be brave to jump out of an airplane, but you have a parachute.

And so the key in business is to be brave and bold, jump out of that airplane, but have the parachute. So when we made the decision on the pizza, we had all the data. When we make decisions on the people, we see what they've done and we look at not only the what, but the how. And so I think when folks say take risks, if you just say take risks, that's just something to put on a t-shirt.

You should take educated risks. There's still room for error. So I think I know I'm a risk taker. I try to be bold in our decisions.

But what I tell people is, I like to have the answers for the test before I go into the test. And so when we do these things, I hope to our customers and our team members, they look like bold decisions, but we.

When you make decisions, how important is gut feel? To me,

And so I think that's a balance that I look for and that I feel like I have. And the other piece of it, though, is making sure you're surrounded by people who know they can push back.

Because if the day you think you know everything is the day you've failed. And so gut feel is important, but also taking the input of the people around you that you trust is also important.

But I'm from New York. And in New York, what you do is you fold your pizza and you eat it like this. And it's even okay to drip a little bit on you. And so that's the way I eat my pizza. I wear it.

Absolutely, it'd be pizza, but probably two or three times a week.

Now, lastly here, if I say a Bulgarian goat cheese cream with truffle, what do you say then?

Very good. Russell, we have a plan. We got a travel goal here. It's been great having you on. Big thanks for feeding the world.

And hey, I look forward to that Italian trip.