At local pizza places, costs are taking a larger share of the pie

At the Tievoli Pizza Bar in Palatine, a secret is hidden right in the name.

It reveals the feeling owner Giovanni Labbate and his family have for the business.

Adding a couple spaces, Tievoli spelled backward is “I Love It.”

It’s a family affair. Labbate and his wife, Adrianna, their three sons, plus Giovanni’s mother, Maria, all work there.

“It’s our passion, in pizza,” Labbate said over the phone, just off a plane in Las Vegas for the 40th International Pizza Expo, March 19-21.

It’s a passion that comes at a cost — a rising cost just as people have seen at the gas station and grocery store, particularly in the last five years.

From the imported Crema Di Pecorino cheese, pepperoni and handmade bacon jam that goes on the signature “Tievoli” pizza to paychecks, to the gas that fuels their truck catering wood-fired pizzas, it’s tough to maintain Labbate’s 10% to 20% profit margin sweet spot.

“COVID kind of impacted everything from that point on,” he said.

Labbate said big chunks of sales go toward his two greatest expenses — food (about 28%) and labor (20%) costs.

Tievoli being just a year old, Labbate bought most of his equipment new so currently maintenance is low.

Still, “there’s quite a bit of overhead,” he said.

Restaurateur Mike Nelson got a bit of a break 10 years ago with his initial capital outlay. He found an old, vacant pizzeria almost fully outfitted in a strip mall at Wehrli and Lisson roads in Naperville.

It became the first of three Little Pops New York Pizzerias that Nelson and his wife, Vicki, now operate — the Naperville store for pickup and delivery, an “express” carryout and delivery spot in Aurora, and since November 2023 the 180-seat Little Pops New York Pizzeria Trattoria, 2799 Maple Ave., Lisle, that offers an extensive menu and employs about 60 people.

“This is the most rewarding business I’ve ever run. Your customers become your friends. Then your friends become your family,” Mike Nelson said.

The Naperville store also used to be a sit-down place, but the COVID-19 pandemic ended that.

Between the pandemic and periodic weather events like a drought that hurt the tomato harvest in Modesto, California, or a lettuce shortage that hiked the price to $95 a case from $20, nearly everything has been effected.

“The price of a pizza … it starts with a location,” Nelson said. “It starts with sourcing a recipe, the ingredients, and I think that is the biggest part right now — the cost of ingredients. And also the pizza box.”

For a busy delivery business that’s a factor, 25 to 30 cents each for good boxes that keep pizza crust crisp.

Looking in his kitchen, he sees that pretty much everything there has risen in cost. Also trying to maintain a 15%-20% profit margin, Nelson said a rule of thumb is pricing items three or four times the cost of the recipe for a dish. He can’t do that with Pops’ filet or strip steaks, they’d be too expensive.

“You need to know your cost of your ingredients to price your product so you can stay in business and make enough money,” Nelson said.

“We get some price breaks, but we’re not Domino’s, where they buy truckloads of flour, and they have gone to automation to make their pizza dough. (And) we pay our employees well so they can have a great living.”

Rob Pesci, director of operations for Paisans Pizzeria, echoed the COVID reality for restaurants.

“The price of everything suddenly went up and products just started disappearing,” he said.

Certainly a mom-and-pop shop compared to the likes of a Domino’s, there is still plenty of overhead in Paisans’ several full-service restaurants, which debuted in 1985 in Cicero started by immigrant Luigi Fejzuloski and his son, Pete.

In addition to a stand that serves Morton College in Cicero there are three full restaurants in the Cicero-Berwyn area, three more in Chicago, and as of 2016, another in Lisle. An Oak Lawn location is planned.

“We’re running on pretty close margins (around 10%-12%), but we make up for it with volume,” Pesci said.

Paisans’ pricing must account for delivery liability, and third-party restaurant delivery services “getting their cut.” Pesci said a little over 50% of Paisans’ net proceeds go to food and labor costs.

Utilities and mortgages also take their slice.

Pesci said Paisans will estimate how much of its ingredients it’ll need in a given year, and negotiate with vendors a couple times a year to try to stabilize prices for things such as pepperoni, the volatile cheese market, and flour for dough.

“We’re talking pallets,” he said.

Occasionally vendors will offer discounts on ingredients, but Pesci likes to stick to what has served well in the past.

“We’re not going to sacrifice the quality of our product to save pennies on the pound,” he said.

Pesci said prices have stabilized, but at a significantly higher level than before the pandemic, and he doesn’t expect them to come back down.

“We try to keep it fair,” he said. “Yes, we do want to make a profit, of course, we want to stay in business. But we don’t want to gouge the consumer for that.”