Better Burger Market Heating Up
ARLINGTON, Va. - The “better burger” market is heating up with a number of newcomers. Leading the pack is novice Five Guys Burgers and Fries, a chain that started franchising in 2002. It now has some 500 franchises. Last year when the big restaurant chains were by and large stalling in sales, Five Guys Burgers and Fries was number one in unit and sales growth by double the growth of the number two guy, Jimmy John's Gourmet Sandwich, according to restaurant research firm Technomic Inc. Adding more heat to the fire, U.S. President Barack Obama recently visited a Five Guys near the White House. The visit was broadcast on NBC's nightly news for the whole country to see and talk about. (The video appeared on Blue MauMau within minutes of the event.)
Other better burger brands are also heating up. The newest being Smashburger, a Denver-based chain affiliated with Quiznos. The chain is seeded by private equity firm Consumer Capital Partners. Its first franchise store opened in Grand Junction, Colorado this week. In the last few weeks it has signed area deals for Iowa, Nebraska, New Mexico and Texas.
The big guys are coming in too. Rumor abounds of McDonald's offering premium Angus beef burgers this year.
Darren Tristano, executive vice president for Technomic, observes, “The opportunity for 'better burgers' is heating up. With fast casual players expanding both regionally (Smashburger) and nationally (Five Guys Burgers and Fries), consumers will get more choices. Add in McDonald's, Burger King and Wendy's gourmet burger offerings, Burger Shots and the Big Mac Snack Wrap and we see increasing innovation. Even Rubio's Fresh Mexican Grill on the West Coast is offering a new $1.99 All-American Taco that includes a beef patty topped with cheese in a tortilla and promoted as 'the burger with a Beach Mex twist.' Arby's is also getting in on the action with their 'better burger' made with roast beef. With greater variety, consumers will have their mouths full!”
Some industry observers wonder if consumers are driving a long-term change for gourmet burgers or if chains are pushing themselves to create a bandwagon effect, a sort of short-lived gourmet burger bubble.
“Fast casual success and competitiveness is pushing the niche,” says Tristano.
The problem is that the big chains are joining in. “I think we will see a shakeout in the years to come as some of the fast casual brands go head to head regionally, but for the next few years, there seems to be ample opportunity to grow.”
Tristano emphasizes that the upside in this sector is very good. “I think there is no limit to the demand for 'better' when it comes to food,” he states.
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