The simple hamburger is not so simple anymore. Over the past five years, the foodservice market has been flooded with “better burger” chains – a serious effort to upgrade the lowly meat patty to gourmet cuisine. After the beef, it is all about the toppings and nothing says gourmet burger, like Real California Cheese.
For decades, eating burgers meant dining at the top fast food chains. Today, the buzz is all about Five Guys, The Counter, Habit Burger Grill, Smashburger and In-N-Out. They are the growth leaders of the burger industry, causing major burger chains to look over their shoulders.
Not one of today’s trendy burger chains looks to slash their food cost by purchasing cheaper ingredients. Of course, they care about food costs and the rising cost of commodities, but they are enticing consumers by offering premium ingredients that cost MORE than what is available at traditional burger chains.
Processed American cheese tops most fast food burgers. At retail, natural cheese sales climb every year, while American cheese declines. Now is the time to make the switch to natural and promote the cheeses on your menu. You will be able to raise your price in line with the improved value.
Smashburger sells burgers starting at $6.50, The Counter offers $12 burgers. Fast food franchisees complain and push back on the 99-cent price point. Consumers know that a standard burger is not the same as thicker, high-end burgers. They know they’re paying more and still they line up. Not every day, but enough times a month to create huge growth in the “better burger” category.
Do not be afraid to offer higher-quality menu items at a higher price-point; it could be a “limited-time-offer” item. Push up your highest price point; people tend to buy in the middle, so it is easier for them to rationalize a higher-midpoint if the highest price is higher.
Focus marketing efforts to engage consumers on your PRODUCT, not your price. Advertising price convinces consumers to search for bargains, not great food.
Operators that compete on price without properly differentiating their product are losing market share. Consumers are smart enough to tell the difference at “better burger” chains. Great cheeses can help sell that difference.
Overall, we encourage you to seek better ingredients, describe the experience, charge what your product is worth and let consumers decide. This strategy works for hot burger concepts and can work for you, too.