Foodservice research firm Technomic's newly released "Top 75 Limited-Service Burger Chains Restaurant Report" provides an overview of the 75 of the top-selling, limited-service, burger-centric concepts. As a whole, burger chains' sales growth was 1.6 percent last year, reaching $65 million.
Much of that growth is attributable to the "better burger" trend that befits the swiftly growing fast casual segment.
The category continues to outpace the restaurant industry as a whole, with the top 100 fast casual chains growing 6 percent to nearly $18.9 billion.
"Better burger," however, doesn't automatically equate to "fast casual" anymore and, as a concept, is becoming a bit trickier to define, according to Mary Chapman, Technomic's director of product innovation.
"You have to look at if it has higher quality beef, does it have interesting or higher scale toppings or bread? Those are the three main characteristics typically, but that doesn't mean 'better burger' is always fast casual," she said.
Burger growth on a bell curve
McDonald's is still the clear driver of growth within the category, offsetting recent struggles from Burger King and Wendy's. But slipping sales aside, the three QSR giants combined still account for 75 percent of limited-service burger sales in the U.S.
"Even a brand growing 150 percent per year is going to be dwarfed in pure dollars by McDonald's, Wendy's and Burger King," said Darren Tristano, Technomic EVP.
Still, fast casual brands now represent a majority of the Top 75 burger chains in Technomic's new report. However, those chains represent just 2.6 percent of the burger sales from the list.
"This is an interesting time in the burger segment," Tristano said. "We are seeing very high growth rates from smaller brands and a steady stream of new entries making their presence felt, while at the same time some of the larger brands are struggling to maintain their footholds."
Even though they account for less than 3 percent of sales, the fast casual concepts have made a huge impact on the American menu staple, as QSRs scramble to upgrade their options and stay competitive with the growing "better burger" demand.
For example, McDonald's launched its Angus burger line in 2009. Wendy's is prepping for a systemwide rollout of Dave's Hot 'N Juicy line in October, and Burger King just launched the California Whopper, a spin on the chain's signature product, with guacamole added as a topping.
"The better burger trend has kept (QSR) on their heels," Chapman said.
Benefits of being a 'better burger' concept
While QSRs continue to roll out higher quality burgers, they also continue to add to their core menu – coffee, oatmeal, smoothies, etc. These aren't your grandparents' burger, fries and shake joints anymore, and the strategy may be paying off as it appeals to broader tastes.
That menu differentiation, however, may also be benefitting fast casual concepts such as Smashburger, Mooyah Burgers and Fries and Five Guys that continue to focus squarely on burgers.
Denver-based Smashburger, for example, was listed in the top 100 of the recently published Inc. 500 after turning in a 3-year growth rate of 2,673 percent. The more than 100-unit chain had a 2007 revenue of $1.4 million, and a 2010 revenue of $39.4 million.
"I would venture to say that many of these better burger concepts will be well-served moving forward because they have that tight focus and they're not distracted by oatmeal or coffee," Chapman said. "They're able to do one thing and to do that one thing really well."
Chapman added that both strategies can work well, depending on how a restaurant executes its offerings.
"There is a blurring of the segment lines a bit, and not just because of the increase in burger offerings. Quick-service restaurants are remodeling and offering coffee, while some fast casuals now feature drive-ins. What it comes down to is what the consumers want and, right now, that's freshness and quality," she said. "Customers don't know the difference or don't care about QSR or fast casual. They just want a place that sells good food at a convenient time and place."
Technomic's Top 10
Technomic's 10 fastest-growing limited-service burger chains, as ranked by percentage unit growth, include:
- Shake Shack, 133.3 percent
- Smashburger, 116.3 percent
- Mooyah Burgers & Fries, 54.5 percent
- Five Guys Burgers and Fires, 34.7 percent
- Freddy's Frozen Custard & Steakburgers, 27.8 percent
- The Habit Burger Grill, 26.9 percentBobby's Burger Palace, 25 percent
- Jake's Wayback Burgers, 20 percent
- The Counter, 18.2 percent
- Fatburger, 48.9 percent
Read more about trends and statistics.