Burger Industry Analysis 2014 - Cost & Trends
Burger Industry in 2014 at at Glance
Birth of the Burger
In the early 1200s, the Mongol army placed slabs of lamb and mutton under their horse saddles as they rode into battle. After the meat was tenderized by the saddle and the back of the horse, they would consume it raw, as if it were an uncooked beef patty. This strange but practical method eventually developed into the creation of modern ground beef. Now that you’ve got ground beef, you know what has to come next: the hamburger. Some believe that the hamburger came from a meatball stand owner who flattened his meatballs between two slices of bread. He then called his new on-the-go creation “Charlie’s Hamburgers.” Others believe that the hamburger originated from a hot dog vendor who decided to substitute their hot dogs for beef, naming this invention the “hamburger” after their location, Hamburg, New York. On the other hand, Texans believe that the burger was a reincarnation of the breakfast patty - a beef sandwich squeezed between two slices of french toast and garnished with glazed onions. Although all of these instances have hit hamburger history, it is still uncertain which one of them is the true story behind the birth of the hamburger. Check out our list of recommended burger franchises at the bottom of this page!
However, no matter how you slice it, the hamburger industry nowadays is nothing like as it was before. Hamburger franchises have spread their ways across the nation and continue to find innovative ways to turn their customers into loyal burger-fanatics. No meatballs and hot dogs here, folks! The hamburger industry is beefin’ up for good.
When it comes to a good hamburger, Americans definitely are not careless eaters. A 2009 report indicated that 75% of burger-lovers rank the quality of the meat as the first or second most important attribute to their burger. Second in line was toppings, ranked either first or second place by 42% of consumers. Even though the affordability of the burger is considered, high-quality ingredients are still key in producing a successful burger franchise.
Even during the recession, Americans want to take their families out for a hamburger outing every once in a while. Statistics show that nearly 50% of consumers purchase burgers from fast food restaurants at least once every three weeks, and approximately 21% of people chomp down at a fast casual chain at least once a month. However, to counter this restaurant hopping habit, the number of burger-eaters who make their own burgers once a week has increased by 3% since 2007.
In America’s history, the hamburger has come to represent patriotism and festivity. The hamburger is ever-present at large family outings, particularly at Fourth of July and memorial day celebrations. Given the timelessness of this All-American classic, it’s no wonder that the hamburger stands as one of the few “recession-proof” food industries in the United States.
These Franchises Got Beef!
The hamburger industry is highly competitive, and there are a few leaders that tend to stand out from the remainder of the pack. Five Guys Burger and Fries for instance, a relatively young but rapidly accelerating player in the hamburger market, began franchising in 2002, and since then, has expanded to over 770 locations in the country. In fact, this franchise reported the highest annual jump in sales among major hamburger franchises - up a whooping 38% increase from 2009.
In addition, Smashburger, a young franchise operated in junction with Quiznos, is sizzlin’ up the Southwest region. Its “Smash. Sizzle. Savor.” motto is already heating up the competition in Nebraska, New Mexico, and Texas; Smashburger is looking to further expand towards Washington D.C., Boston, and in several other areas around the country.
Even Mexican food franchises are hopping on the burger bandwagon. In 2009, Rubio’s Baja Grill promoted an All-American taco topped with a beef patty and cheese, calling it the “burger with a Beach Mex twist.”
Don’t think we could ever leave out the big guys: fast food franchises Mickey Di’s and Burger King are still up in the ranks, but now adding a lil’ spice to their traditionally successful hamburger business. In response to attacks from America’s health-panicked parents, McDonald’s has included more Angus beef products and Weight-Watcher’s approved meals on its menu. Moreover, McDonald’s shares have increased over 120% in the last five years, proving that even obesity concerns cannot curb Americans’ appetite for fast food hamburgers.
However, do not let this competitiveness stifle you. Whether it be a nationalized franchise such as Burger King or a regionally targeted restaurant like Smashburger, the burger industry is rift with opportunities for investment. Visit FranchiseHelp.com’s directory of hamburger franchises for a full list of franchising opportunities.
Always Hungry for More (Burgers)
With America’s fight against obesity, e-coli concerns, the mad cow disease outbreak, and the recent go-green campaign, the hamburger industry has certainly had its fair share of obstacles. However, the U.S. Fast Food Market Outlook for 2010 indicates that burger consumption in the United States has actually been continuously rising in the past few years. Furthermore, the hamburger industry is predicted to surge at a Compound Annual Growth Rate of 4% this year.
One of the strongest reasons for the hamburger’s longevity is its wide-spread appeal. The burger is affordable, portable, and customizable; they can be served gourmet-style or as a rustic yet classic to-go food. With this type of versatility, hamburger franchises - or any food franchise for that matter - can easily adapt the hamburger concept to current economic settings. For example, Burger King is promoting its “Build It Your Way” concept, allowing customers to stack on toppings, patties, and cheeses of their choice. Burger King is taking advantage of the burger’s versatility and marketing it towards people’s preference for customization and choice.
All in all, the rising teenage population and improving economic conditions have revitalized the fast food industry, and the hamburger franchises are expected to be at the forefront of this expansion.