Article
Bigger burgers beef up business
Burger sizes and prices are changing the quick-serve landscape.
June 20, 2007
When Robert Andersen decided to start a new hamburger chain, he recognized one big trend in the QSR industry — bigger burgers. And the reason was simple, Andersen said: Bigger burgers are of a higher quality than the thin patties that dominated the fast-food market for so long.
Capitalizing on the trend, Andersen opened Plano, Tex.-based Mooyah Burgers in April, serving burgers as large as ¾-pound. The response has been overwhelming, Andersen said.
And why not?
According to Datassentials, a Chicago-based menu-research firm, the availability of extra-large burgers, at least ½-pound in size, is highest in quick-serve and mid-scale restaurants, with just under 40 percent of operators offering at least one extra-large burger. Additionally, nearly 75 percent of all burger operations offer at least one extra-large burger item, while 40 percent of coffeehouses, bakeries, ice cream shops, and other food establishments also offer extra-large burgers.
But size is not enough to satisfy the public; it also has to be affordable. The typical Mooyah burger sells for $3.95; the average price for an extra-large burger in the quick-serve space is $4.42, compared to $9.90 in fine dining restaurants.
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"People can't get a really great burger without paying $10, so I think we really hit a nerve from that standpoint," Andersen said. "They get a nice looking burger that's a pretty good size and that they need both hands to eat, without breaking their bank account."
Andersen said his 2,000-square-foot store is on pace to exceed $1.2 million in sales. "They can't get enough of them," he said. "It's almost as if these people have been repressed."
A lotta burger
Despite a wave of health consciousness that has rolled across the nation, when American consumers walk into restaurant and look at the menu, more often than not they zero in on the 1/3-pound burgers and larger.
It may seem contradictory but that's the way it is, said Jeff Jablow, director of training and menu development for Cheeburger, a 21-year-old burger chain with 69 locations, headquartered in Ft. Myers, Fla.
"We offer salads, chicken, and meatless products like the portabella mushroom sandwich, but our No. one item is our burger, and the ½-pound sells as well as the ¼-pound," said Jablow. "When it comes to burgers it's one of those menu items that will never go away and, like everything else, we want the biggest and the best."
In the 1950s, the industry standard for a hamburger was 1/10-pound, and that didn't change until the 1980s when the ¼-pound hamburger was introduced, said Brad Haley, executive vice president of marketing for Carl's Jr. and Hardee's.
Haley said during the decades when the fast-food industry clung to the skinny patty, the casual-dining segment, restaurants such as TGI Friday's, Chili's and Applebee's, emerged with bigger- and higher-quality burgers, paving the way for QSRs to add larger burgers to their menus.
Carl's Jr. unveiled its ½-pound burger in 2001, and dubbed it the Six Dollar Burger.
"These restaurants educated the consumer about the quality of hamburgers and the fast-food industry didn't keep up," Haley said. "So when we introduced the Six Dollar Burger, the name of the product was odd but it summarized the positioning we were going after. The idea was it was the same quality and size as the kind of burger you get at a sit-down restaurant. But there you pay $6 for it, whereas at Carl's Jr. you get it for $3.95."
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Two years later, Hardee's introduced its line of Thickburgers, patties that range in size from 1/3-pound to 2/3-pound.
"Those burgers helped turn the Hardee's chain around," Haley said. "It was struggling at the time. It had a successful breakfast program, but didn't have successful lunch or dinner menus."
When Hardees introduced the Thickburger in 2003, its average unit-volume was $763,000 compared to $916,000 in fiscal year 2007, a 20 percent increase. And when Carl's Jr. introduced the Six Dollar Burger in 2001, its average unit volume was $1.07 million compared to $1.44 million in fiscal year 2007, a 34 percent increase.
"If you look at where the volume is going it seems to be consumers trading down from casual-dining to quick-serve restaurants," said Haley. "And it's because it's a great proposition for consumers because they can now get a burger that is as good as what you could get at those sit-down restaurants, but it's less expensive and you can get it more quickly. That's a pretty powerful combination of benefits."
Haley said the new hamburger-industry standard is 1/3-pound when previously the ¼-pound burger was considered large.
Andersen said it's all about the experience for customers. And when they leave the house with the goal of purchasing a burger, diets and weight worries are left behind.
"We talk about eating healthy so logically that makes sense, but we really eat with our hearts," Andersen said. "And you'd think it's just big old guys like me eating burgers, but we probably have a higher percentage of females than males and that's been the most amazing thing."
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