The Sizzle of Success

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Burgers and Fries boost the hospitality industry’s economy.

The burger is the most unstoppable force in the food universe.” Those may sound like strong words from an entrepreneur who first immersed himself in the booming burger market in June 2010; but based on his enormous success in the ‘better-burger’ category, Shant Mardirosian, owner of The Burger’s Priest, Toronto knows of what he preaches. “The burger will always, always, always be popular — it will never not be popular,” says the former seminary student.

The burger market may always be popular, but with the growing influx of gourmet burger restos and fast-food offerings popping up across the country, some are beginning to wonder if the segment has reached a saturation point. Laura McGuire, editorial manager at the Chicago-based research firm, Technomic, isn’t worried. “The burger trend is stronger than ever, with room for growth. Canadians love burgers,” she says. “The many options now available are only making consumers more excited for what’s next in burger innovation,” says McGuire. “For every new burger introduced, there are droves of burger-loving Canadians eager to try it and compare their meal to past burger experiences.”

That’s where ‘better burgers’ come in; they’re gourmet burgers that are less expensive than fine-dining fare. According to Scott Hume’s U.S.-based burgerbusiness.com, the niche segment has been growing by approximately 25 per cent each year. In Canada, the burger-and-fries sector as a whole is an exceptionally lucrative segment of the hospitality industry, one Mardirosian estimates is worth $20 to $30-million in the Toronto market alone.

Tom Ryan, founder and chief concept officer of Denver-based Smashburger, owned by private equity firm Consumer Capital Partners, says the annual U.S. burger market is worth “$60 to $100-billion, but the lion’s share of growth is coming from the ‘better-burger’ category.” Revenue for the company totalled $39.4 million in 2010, up from $1.4 million in 2007 when the chain began smashing its burgers. His company, has experienced “industry-setting growth” since launching in 2007. “There’s lots of dynamics in the burger space, but the better-burger category is really driving [the market] right now,” he says.

According to Technomic’s 2011 Top 200 Canadian Chain Report, the limited-service hamburger segment totalled $5.5 billion in 2010, up 5.2 per cent from 2009. Perhaps the scope of potential profit is the reason some burgerpreneurs, keep their cards close to their chest.

A newbie restaurant owner, Mardirosian protects his meaty recipe like a painting inside the Vatican. “That’s a secret we don’t tell anybody,” he says guardedly. “It’s 100 per-cent beef, but we don’t tell anyone anything about it; it’s a 100 per-cent secret,” he says slyly. “People go through my garbage; the stuff comes in special unmarked cases and nobody knows what’s in it.” What diners do know is what’s on the menu. It features classic burgers such as the double cheeseburger ($7.99), bacon cheeseburger ($6.58), and a signature dish called The Priest ($9.99) — a cheeseburger topped with fried mushrooms stuffed with cheese.

For Mardirosian it’s a simple approach that’s earning praise at his original concept, which offers spiritual information tastefully displayed on the company website. “We do the classic American cheeseburger,” Mardirosian says proudly. His parishioners have been worshipping his cheeseburgers ($10.72 for a combo) so consistently, that a new Toronto location opened across town in January.

The create-your-own burger concept is driving sales at Smashburger. Choose your bun — classic egg, multi-grain or spicy chipotle — then your patty, and load on free toppings and sauces such as spicy chipotle mayo, blue cheese dressing, even tzatziki. Kosher pickles, jalapeños and sweet relish anyone? The fries are unique. Borrowing from fine dining, the russet potatoes are tossed with rosemary, olive oil and garlic ($1.99), while the shoestring fries are seasoned with sea salt ($2.29), and truffle fries are topped with shaved parmesan and truffle essence ($2.99).

Today’s fries appeal to a growing appetite for more innovative varieties, which suits a range of tastes, such as the yam fries served with burgers at Vancouver-based Joey Restaurants or the promise of fries hand cut daily and custom seasoned at the Toronto-based Smoke’s Poutinerie. In 2010, Jamie Kennedy brought his spuds to Toronto’s Air Canada Centre, offering yukon gold fries ($6.50) tossed in fine and coarse sea salt and thyme. The yukes also come with a splotch of chili mayo, ketchup or cider vinegar.

It’s no secret burger joints prosper in a fragile economy, but marketplace frailty is also forcing operators to find new ways to attract regular clientele. “Our interactive table offers a unique experience. You can build your own burger right at the end of your fingertips,” says Alexandre Maher, founder and president, iBurger, Montreal. A fondness for hip technology led Maher and his team to create an interactive menu table. It’s a touch-screen tabletop resembling a giant iPad. “We need to have good food and offer good service, but we also want to be innovative in creating special burgers.” What bacon lover wouldn’t be wooed by a high-res image of dinner? A gourmet burger with foie gras, caramelized onions and Maître Jules cheese ($27) is just a click away. Serving between 1,000 to 1,300 clients per week, with check averages ranging from $19 at lunch to $31 at dinner, Maher has found a niche.

According to Ryan, Smashburger’s success is due to lateral moves by consumers looking for an inexpensive meal. “We’ve found customers come in sideways from other fast-casuals, and clearly they save money by [trading] down from adult-casual concepts, burger or not,” he says. “So we found ourselves in a very fortunate place given the financial realities of the marketplace.”

Ryan believes Smashburger’s success during the recession was serendipitous. “We ended up in a very special place, because we founded ourselves 18 months before the recession, and we were off to a great start. Then we grew right through the recession,” he adds. “We run about 55-per-cent lunch, 45-per-cent dinner. Burgers are America’s favourite food, and they’re probably America’s most-loved comfort food.”

While the benefit of selling comforting burgers and fries remains constant, the market has changed. Years ago, healthy meals on burger menus were almost verboten. Today, less fattening meals and veggie choices are common. For instance, Toronto’s Oliver and Bonacini does well with its Portobello burger ($14.75), and other operators sell chicken, lamb or salmon burgers to appreciative diners. At Maher’s iBurger, its signature sushi burger is tartare of salmon with mango, avocado, lemon and wasabi, between two rice cakes, topped with seaweed salad ($20). Maher says it’s a huge hit. “People come every day to discover this unique dish. If you talk to any one of our customers, you’ll hear about the sushi burger.”

Another dish that satisfies the craving for a low-fat burger is game-meat patties. “Our burgers are made from meat raised on our own farm — naturally grazed, hormone and antibiotic-free — and aged to our own specs,” says Alistair Barnes, executive chef of  the Calgary-based Canadian Rocky Mountain Resorts (CRMR). The customers love the game-ranch burger made of elk and bison ($17). “We use a 50/50 mix of bison and elk for our burgers, hand formed with a few ingredients such as fresh sage and thyme, salt and pepper… with no fillers.”

Aaron Jourden, editor at Technomic, believes catering to diners who don’t eat beef is a trend borne out of the recession. “Increasingly popular are non-beef burgers — turkey patties and black-bean patties.” He says restaurateurs are stepping up as the economy lags, offering “an array of indulgent sauces and unexpected toppings, which can range from pineapple slices to kimchi to fried eggs.” CRMR’s Barnes, who makes his own original relishes and salsas for his game-meat burgers, agrees the burger trend will continue. He promotes the healthy aspects of his burgers. “We certainly like to promote the healthy side of our game burgers, which are low in fat and higher in protein than beef.” (See foodserviceandhospitality.com for Barnes’ recipes.)

So will the sizzle fizzle, fade or continue to flourish? iBurger’s Maher believes it depends on each market. “In the past, burgers were known as fast food, served in a cheap place with poor decor. Now, the market has changed, there are nice places with atmosphere offering good drinks and a good burger,” he explains. “Of course, a good burger is more expensive and not all markets are ready for it.” Barnes feels the industry needs to better promote the health benefits of the burger. “The burger market will continue to be popular in North America as long as the industry keeps in mind the health and flavour aspects of this dish,” he says.

Hume, from burgerbusiness.com, believes QSR burger sales can remain strong if operators always have something to talk about. Promotions, done swiftly, lead the way. “That’s why you’re seeing limited-time offers go up.” He says a fast pace is a smart idea, when it comes to offers.

Mardirosian, whose flagship 450-square-foot The Burger’s Priest location pumps out an average of 700 patties on weekdays and 1,000 burgers Friday and Saturdays, stresses the dollars and sense of the burger business. He argues, that with only a slight differential in price between his fare and what the larger chains offer in a combo, the choice is simple when satiating one’s craving for a burger, “with mine, you get it a whole lot better.”                                

             

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