The “better burger” segment was already on a roll, but economic factors have begun to exert even more pressure on cheeseburger-focused brands in ways that will favor fast casual over quick service.
According to data in the 2015 Burger Consumer Trend Report, total burger consumption appears to have peaked and leveled off since 2013, likely due to higher prices for beef in supermarkets and in restaurants. Beef’s ongoing perception as less healthful than other types of meat is persisting as well. Fast-casual brands withstood that challenge better than quick-service chains, posting a collective gain in 2014 system sales of 11% compared with a year earlier, as opposed to a 1% increase for their quick-service peers. But both segments’ 2014 growth rates trailed their five-year compound annual growth rates through that year, meaning the more robust growth they enjoyed immediately following the last recession is cooling off.
To grow sales, operators will have to innovate new kinds of burgers and sides that not only pique consumer interest, but also rein in food costs. The consumer demands most prevalent in Technomic’s research about burgers all seem to be part of the better-burger cluster’s DNA: greater customization, improved transparency and alternative proteins.
Three in five adults surveyed in the Burger Consumer Trend Report called build-your-own burger offerings appealing, and slightly more than two in five said they were willing to wait a little longer for a custom-built burger. Unsurprisingly, consumers also indicated they would be willing to pay more for a customized burger than for either a signature burger or a standard burger. For many better-burger chains, customization has been part of the service model from the start, letting consumers pick and choose their toppings either while moving through the make line or while ordering from a digital kiosk or tablet.
While it will be harder for quick-service chains to integrate customization, fast-food brands might have an easier time being more transparent about the ingredients they use and sourcing practices. The Burger Consumer Trend Report found that seven in 10 people agreed that high-quality types of meat or cuts of meat make a burger “premium,” while slightly less than half of respondents said the same thing for high-quality vegetable toppings, specialty cheeses, specialty toppings and housemade ingredients.
Finally, fast-casual companies are also showing leadership in putting different kinds of meat on a variety of buns, which is important for meeting consumers’ different needstates. The growth in chicken sandwich incidence at burger brands follows customers’ demand for sandwich options that either cost a little less than beef or can be seen as slightly more healthful. Shake Shack’s test of the Chicken Shack, its first non-beef sandwich, says a lot about the trend. Health-conscious eaters might also turn to the beef-mushroom blended patty on the Earth + Turf item at Flip Burger Boutique in Atlanta. Blended burgers can also meet the need for indulgence, such as the main offerings at Slater’s 50/50, where many of the burgers are composed of half-beef-half-bacon patties.
Customization, premium cues and alternative meats aren’t impossible for quick-service chains to adopt, but the hard part for those brands is to choose which upgrades work for their core consumers, without threatening profitability or speed of service. Fast casual’s longer track record with these features likely means that better burger will continue to get the better of quick service for a while.