Sales are beefing up at better burger restaurants
The humble burger still reigns as America’s favorite food, but a growing number of foodies are searching for something a little more special: Sandwiches made with fresh Angus beef, a better quality roll and such toppings as aged cheddar or homemade pickles.
The so-called better burger segment has become one of the restaurant industry’s best performers in recent years, in part because of unprecedented growth by Five Guys Burgers and Fries, known for its hand-formed burgers, fresh-cut fries and unlimited free toppings.
More recently, a number of upstarts have elbowed in at the table, adding turkey or veggie patties and myriad toppings such as tzatziki (a yogurt-cucumber sauce), dill pickle chips, goat cheese or brie. Some also offer salads and beer.
The better burger segment remains a tiny portion of the restaurant industry, with estimated sales of $2.2 billion in 2011, but it grew 21% from the previous year, according to a recent report by Technomic, a Chicago research firm. That compares with sales growth in 2011 of 3.2% for all fast-food and fast-casual restaurants that focus on burgers.
Technomic defines better burger restaurants as establishments that use fresh meat and make sandwiches to order. That means consumers will have to wait up to 10 minutes or more for a better burger. They also can expect to pay more — as much as $10 for a meal.
But the idea appears to have broad appeal. On a Friday afternoon, the Elmhurst Smashburger in Chicago was bustling, with groups of co-workers, families, friends and couples out for celebration lunches, quick bites and family meals.
Heather Hoy and her husband, Blair, were enjoying a lunch with their three children and nephew in celebration of the last day of school.
She was tackling a Spicy Baja chicken sandwich with pepper jack cheese, guacamole, chipotle mayo and jalapenos. Sweet potato fries and haystack onions were also hits with her family, she said.
“It’s obviously higher quality than some of the fast-food places,” she said.
McDonald’s continues to dominate the fast-food burger business, posting nine straight years of worldwide same-store sales gains. In recent years, the chain has expanded its menu and kept sales growing.
Salads, smoothies and coffee drinks have helped win back women, but Darren Tristano, executive vice president of Technomic, said serious burger lovers got bored along the way.
“That’s when the opportunity opened, and that’s when the chains jumped in,” he said.
McDonald’s declined to comment for this article. But the chain has chased the better burger trend, adding Angus burgers with a better quality bun and upgraded toppings like mushrooms and Swiss cheese.
Tristano said the economy also has been a factor in better burger growth. “Consumers were looking for familiar products that could be a little better but didn’t break the bank,” he said.
Better burger chains appear to be building on a winning concept that Lorton, Va.-based Five Guys Burgers and Fries ushered in on a nationwide level when it began franchising in 2002. It’s been the fastest-growing restaurant chain in the U.S. by sales since 2008, up 32.8% in 2011 to $951 million, according to Technomic. Five Guys has 1,035 locations, founder Jerry Murrell said.
“I don’t know if we can take credit” for popularizing the better burger model, Murrell said. He pointed to In-N-Out Burger, the Irvine chain that opened its first store in 1948. In-N-Out “did a terrific job in California,” he said.
Although new burger concepts are “popping up all over the place,” Murrell said, “there’s plenty of room for competition.” But he had words of caution for competitors that are building out the menu beyond burgers and fries.
“When you open a place up you have a tendency to start adding things and get away from the burger,” he said, adding that he’s seen competitors “start having a little trouble with quality.”
He’s determined to keep things simple and not try to please everyone. That includes being more concerned with getting the burger right than having it arrive fast.
“We have a sign in some of our restaurants that says, ‘If you’re in a hurry, there are a lot of really good hamburger places close to here,’” Murrell said. “Some of our franchisees are afraid to use it.”
