Thursday, January 2, 2014

Burgers, Burgers, Everywhere!
Four P’s to Winning the Better-Burger Wars
                                                                        By Linda Duke, CEO, Duke Marketing, LLC.
What’s up with burgers on every menu in America today?  The hamburger has gone from an American menu staple to burger joints on every corner in America.  From the build-your-own style burger bars to the better-burger category, to casual dining chains adding their own burgers, one could say the Burger is the hottest trend in the restaurant industry today.
The limited-service burger segment is the largest menu segment—in terms of revenue—in the restaurant industry. Although half of that business comes from one chain—the undisputed heavyweight burger champion of the world, McDonald’s—the “better burger” segment, classified as fast-casual, is rapidly expanding, with growth of over 20% last year compared to just under 4% growth for limited-service chains (per Burger Business 2013). Quickly growing better-burger giant Five Guys Burgers and Fries has not only been dominating the fast-casual better-burger segment—with some competition coming from rival Smashburger—it is the fastest-growing restaurant chain in the country, period, with growth of 792% since 2006, per Technomic. It currently has over 1,000 units in this country and has plans in motion for another 1,500; all current Five Guys franchise opportunities in the United States and Canada have been sold.
The term “Burger Wars” originally came about during the late 1970s due to an attempt by Burger King to generate increased market and mind-share by attacking the size of bigger rival McDonald's hamburgers. Then in 2010, The New York Times stated that the poor economy and recessionary period has led to the return of the Burger Wars but now they include the “Better-Burger” brands as well.
Five Guys, Fuddruckers, The Counter, The Habit, MOOYAH, Smashburger, Fatburger, Unami Burger, Burger21, Elevation Burger, Burgerville, In-N-Out, and so on why are there so many new burger concepts and will they all stand the test of time? 
Three words:  Cost efficient, high margins, frequency.  Because of tightened budgets, consumers have been forced to seek value not only from the major fast food chains but lower priced menu items, burgers, on casual dining menus as well as the new better-burger concepts sprouting up on every corner, are increasingly competing for those consumer dollars.

Who will win the Better Burger game?  Top differentiators:
In-N-Out:                    Most convenient with drive-thru          most loyal following
Five Guys:                   Best fries                                                    most locations
Smashburger:             Unique menu items               growing quickly—gee-wiz factor
MOOYAH:                   Loyal Store Marketing          focused menu-burgers, shakes, fries
The Counter:              100 variations                                           build-your-own
Fuddruckers:              one of the first fast casual’s                  build-your-own
The Habit                    clever name                           donates to education foundation
Unami Burger             truffled fries                           chef-driven $65 gourmet burger
Burgerville                  local products                                    certified green-sustainable
The battleground: a booming market for pricier burgers….how will it be won?  How will these better-burger brands also compete with the goliaths (eg. Wendy’s Burger King and McDonalds)?
FIND OUT the next issue of  Restaurant Marketing Magazine 2014 will continue the story...


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