The Wood-Fired Blog

Innovating the Pizza Oven; Part II

In yesterday’s posting about the Ovens from Napoli, I found myself writing and thinking about the companies that make pizza ovens, and their underlying organizational and design philosophies. And whether they are innovative or traditional; pushing the state-of-the-art or still making their grandfather’s pizza oven.

One of the first things that struck me was how virtually every other pizza oven company is deeply rooted in the past, and how much Forno Bravo stands out as an innovator. Looking at US marketplace, with one exception, you really only see two types of company: importers and very small companies who do not do their own manufacturing. Which is pretty cool. This gives Forno Bravo the ability to create new products and open new markets where no one else can. This is fun. :-)

Today, the majority of Forno Bravo’s competitors in both the US residential and commercial pizza oven markets are importers of ovens made by small, family-owned companies located in Italy (and one in France). Even most of the ones who say their ovens are “made-in-the-USA” still buy the actual oven, dome, floor and vent from an European manufacturer. This most important characteristic of this dynamic is that the importer can only ever be as good and as innovative as the company they buy from. Typically, the Italian manufacturers are small, multi-generational companies where the current management took over operations from their parents, and their products are virtually unchanged over the past 20 years.

From a business perspective, this is a reflection of the Italian economy’s reliance on mom-and-pop businesses as source of it’s weakness in today’s connected global economy. Greece suffers from a similar problem — I wrote about the Greek pizza oven market in the past, where I found three different brick oven manufacturers within one mile of each of other in a small town on Crete.

A traditionalist might argue that it’s a good thing that the pizza oven has been virtually unchanged for the past 20 years (or perhaps 2,000 years, all the way back to Roman times), and that we should not mess with a good thing. While this logic has some nice appeal, it ignores the technical advances of the past 20 years. And while the technology of pizza ovens may not have not evolved as fast as, say, smart phones or computers, it has definitely progressed. Today we have access to cost-effective refractories and insulators that are more efficient and cheaper than the alternatives of 20, or even 5 or 10 years go. Technology is an irresistible force, where today’s $15,000 economy car is faster and safer than the $70,000 luxury car from the 1970′s.

At the same time, technology advances also enable design innovation. We aren’t just making the same products using new materials. New materials can also enable new ovens that can be used to make traditional Pizza Napoletana in new places and new circumstances.

Innovation in equally difficult for our very small US-based competitors. These companies do not have their own manufacturing facilities and they only have a few products. I will be blogging next about ventilation and the advantages of different venting methods that underscores the limitation of the designs of these smaller, less sophisticated companies.

But for now, we are happy to have the capacity and skill to develop fun and interesting new products that make pizza ovens better — and available to a growing audience. We really like the new Strada60 oven that is light enough to be moved around for parties and tailgating; and we hope that you like it as well.

And stay tuned for our newest small backyard pizza oven. In time for Christmas.

 

Craigslist, Profit Compression and Pizza Ovens

I’ve been thinking about the NY Times Douthat column on Facebook and commerce, and there is one thing I want to add to my posting (Physical Goods in a Virtual Era).

In his column, Douthat notes that Facebook is no General Motors, and that despite their $100B market capitalization, they don’t actually employ very many people 9 (a tiny fraction of GM’s payroll in it’s heyday). In fact, even Apple, who manufactures all of their devices in factories outside the US, has a small payroll relative to their unquestionably high revenues.

All of which leads me to Craigslist and the profit compression phenomenon. As many analysts have noted, nothing has done more to damage the traditional daily newspaper than Craigslist. By effectively replacing the daily newspaper’s expensive want ads with free or inexpensive online ads, Craigslist has destroyed the newspaper’s main source of revenue, costing the industry scores of billions of dollars. According to University of Michigan Economics Professor Marc Perry, newspaper ad revenues have fallen from a peak of over $60B, and $46B a short five years ago in 2007, to $20.7B in 2011 (the lowest level in 60 years).

Against these massive revenue loses, Craiglist itself remains a small, privately held company. It does not disclose its finances, or even it ownership structure for that matter, but most analysts estimate that it has revenues of slightly higher than $100M. The 11th most popular site in the U.S., Craigslist has only 32 employees. The mouse truly ate the elephant.

But don’t feel sorry for Jim Buckmaster, the Craigslists CEO. Various analysts estimate that the site with worth at least $1B, making Mr. Buckmaster a very wealthy man (at least on paper).

In a similar vein, product companies can compress the profits of a related market through innovation, and turn their increases in unit production into a strategic advantage. For example, as consumers buy iPhones and iPads rather than PCs, Apple benefits from economies of scale, which in part helped them to bring the iPad to market at an aggressive $499 price. Meanwhile, faced with declining PC sales, HP and Dell have been forced to lay off staff.

We are actively pursuing a profit compression as a strategy at Forno Bravo. By introducing smaller, ready-to-use ovens at lower price points than what the incumbent suppliers had been changing, and by introducing the concept of complete oven kits at aggressive prices, we have significantly lowered the Average Selling Price (ASP) for the entire industry. But as I noted in my earlier posting How Do You Price a Pizza Oven?, our unit volumes are much higher than our competitors and we are flourishing making a smaller per oven profit.

With the upcoming Presto oven, our smallest and least expensive oven yet, we are continuing to push this trend—we hope to the delight of our customers.

Innovation, Garages and Pizza Ovens

Mention the words garage and innovation, and many people will quickly conjure up visions of Hewlett, Packard, Wozniak and Jobs. The Silicon Valley success that started in a garage is the stuff of legend—and it’s a well-earned legend. Start-up companies that built their first products in their garage, long before the even had enough money for company offices, have gone on to create some of the world’s most wonderful, and popular products. Today, the HP garage is a designated California historic landmark and is listed on the National Register of Historic Places.

The HP Garage

In our own small way, Forno Bravo is part of this heritage. I built the first Primavera prototypes in my garage (I really built them and I really used my garage) at a time when Forno Bravo was exclusively an importer and we were not set up for manufacturing. It was an exciting time, and I was distinctly aware that my plan might succeed and it might fail. Either way, it was thrilling to go out on a limb and try something new. Happily, it all worked out.

But that got me thinking. At the time, I hadn’t really connected the dots, but my grandfather was also a garage entrepreneur. He was born in North Dakota in 1904 to a large farming family, and in 1922 became the only member of his family to attend college—earning an engineering degree from North Dakota State. While working for the FCC in Sunnyvale, CA in 1950s as a communications engineer, he did his homework and found two spots on the FM radio spectrum that were licensable as radio stations.

To quote Wikipedia:

A broadcast license (U.S.) or broadcast licence (elsewhere) is a specific type of spectrum license that grants the licensee the privilege to use a portion of the radio frequency spectrum in a given geographical area for broadcasting purposes. The licenses are generally straddled with additional restrictions that vary from band to band.[1] In some cases, the FCC does not assign licenses to any exclusive user, but allows qualified users to obtain a license [1] The Radio Act of 1927 established the regulatory premise that persists to this day: the spectrum belongs to the public and that licensees have no property rights to continue using it.[2] Although the spectrum is licensed to bidders, the purchase does not represent ownership or rights, only privileges to using that part of the spectrum.

He received a license for the stronger of the two locations and he built the radio transmitter in his garage. Without any external funding, he launched the radio station in the early 1960s, and by the time I was a small child, he had sold it. He never worked again, retiring in his late 50s. As a child, my main memories of my grandfather were that he liked fishing, Cadillacs, Ham Radio, and the Coleco Adam personal computer. I wonder what would have happened if he had come of age during the Internet era.

Speaking of Silicon Valley, there is one last interesting twist to the story. My grandfather leased a pad from a farmer, who, the story goes, offered to sell him the land. As a childhood memory, I can still picture the transmitter sitting in a huge field of tomatoes. Forget the radio station, five acres in the middle of Silicon Valley is probably worth a fortune today.

So, here’s to garage entrepreneurs in the family.

New Third Generation FB Castable

This is the original version of the article I wrote on the new third-generation FB Castable. A shorter version of this appeared in the March 2012 Wood-Fired Newsletter.

James

We have developed a great deal of expertise at Forno Bravo over the years with refractory materials and insulators, and we have worked hard to continually improve. We are proud to introduce the third-generation of FB Castable, the material we use to produce our wonderful ovens. In fact, we have been shipping ovens with the new material for a number of months — and everything is going really smoothly; so we wanted to share the news with you. Plus, FB Castable is designed, blended and cast at our own factory in California (made in USA).

Our new material features a new and more complex array of refractory aggregates (calcined material in different shapes and sizes that create a structural web) that creates an even stronger ceramic bond, along with a higher grade of calcium aluminate cement — and it delivers an awesome (and industry-leading) 8,230 psi compression strength. That means better cooking performance and better durability.

In one sense, it all started with the first modular oven that I bought and installed in San Gimignano. Before I visited the oven factory, I found a company brochure for the producer at a local garden center and I spent a very contented afternoon sitting in the autumn sunlight and translating the Italian. The installation instructions were very helpful — particularly considering that my first experiences with brick ovens were Alan Scott’s Bread Builders and the two barrel vault brick bread ovens that I had built in my house in California.

But while the installation instructions were good, I was particularly struck by the fact that each residential oven was available in two versions — one in a red colored material and the other in grey. After struggling with my bad Italian, and the fact that the brochure had a number of technical terms that could not be translated online, I came to the realization that the company was following the traditional “good” and “best” product strategy, where the red oven was made using a product that roughly translated to “small volcanic pieces”. The grey ovens on the other hand were easy to identify. The company called them “refrattario”.

I met the company owners armed with a number of questions, and they did not disappoint me with the answers. The red ovens were in fact made using a locally sourced terracotta material strengthened with a heat resistant volcanic aggregate, which was significantly less expensive than true refrattario. And because in their minds the ovens were for occasional, hobby use (their word in this case), the red terracotta material wasn’t great, but it was basically good enough. Of course if you were serious, they said, you would pay a lot more for a true refractory oven — which used the same material as their restaurant ovens. But, they were a lot more expensive.

As a buyer, I thought this was confusing and it made the decision harder than it should be. Was the cheaper oven good enough? Would it work well and last? Should I pay a lot more for the better oven?

I decided from day one that Forno Bravo would use the same commercial-grade, true refractory material for all of our ovens. And over the years, we have continually improved our ovens and the materials we use.

Which is why we are so excited to announce the third generation of FB Castable. This true refractory material is our own proprietary technology that delivers remarkably fast heat-up times, great heat retention and unrivaled durability. It is incredibly strong.

You can read more about it on Fornobravo.com. Link to this page:

http://www.fornobravo.com/pizza_oven_selection/refractory_primer.html

Innovating a 2,000 Year Old Product

The word innovation usually conjures up images of semiconductors, Internet software and green energy. But at Forno Bravo, we keep innovating around a 2,000 year old product. I have written a lot over the years about the ovens in ancient Pompeii, and how remarkable the design, the materials and the craftsmanship were on the ovens.

How do you improve on something that has been so well known and understood for so long?

That is certainly the thinking of many (I might even say most) pizza oven companies. They seem to have stopped innovating 30 (or more) years ago, and they are still selling the same products that they were making and selling in the 1980s, or earlier. But I think I am too restless for that type of an approach, and it leaves too many opportunities unexplored.

At Forno Bravo we are having a lot of fun constantly improving our products and developing products that serve new markets and oven uses. Going all the way back to the first days of the company, our goal has always been to make wood-fired cooking and pizza ovens as popular in the U.S. (and Canada, the UK, Australia and the rest of the world outside of the Mediterranean) as they are in Italy; to make the pizza oven as popular as the propane grill. Yes, I keep dreaming.

And it has always seemed to me that the best way to do that was to make it a lot easier for the person who likes to cook and likes good food to buy, install and use a pizza oven. We quickly came to see that one sizes does not fit all, and that one person’s hobby is another person’s nightmare, and that not everyone wants to install a modular pizza oven kit in their back yard. Some do and some do not.

I often think that Forno Bravo has more in common with Apple, or Google, than our competitors in the pizza oven marketplace. Where Apple works with processors, memory, battery capacity, packaging, size and weight, we work with refractories, insulators, heat holding capacity, packing, size and weight. We make trade-offs with size and weight and how they impact the user experience. We use fundamental technology to get more performance (cooking capacity and heat retention) from the same (limited) physical space; we work hard on product packaging to deliver maximum utility from fixed weight restrictions; and we deliver awesome performance when weight and sizes are not limiting factors.

We have a number of different levers (means of design and production that we can control) to work with, including refractory binders, refractory aggregates and additives, refractory mortars, insulation, dome design, ventilation design, air flow, oven opening design, stands and enclosures, metal, paint, powder coating, chimneys, and a wide range of ascetic design materials.

Our applications include backyard cooking for a small family, or for large parties, professionals catering events throughout their community, pizzerias striving to make world-class pizza, create a following, build a brand and make a profit, people who want to roll their oven to their pools deck, or into their garage for the winter, or want to install a small oven on a small deck, who like the look of smooth stucco, or want to build an outdoor oasis. People who want to make great pizza, real crusty hearth bread, or who know how a brick oven just makes everything they cook taste better.

So as long as our customers are willing to keep trying hard to make a better pizza or a better loaf of bread, we are happy to keep working hard to make our ovens better—and to keep coming up with ovens that you can use in all sorts of new ways.

In fact, we have a new innovative oven that is just about ready to be introduced to the market. Stay tuned for the Forno Bravo Presto.