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Burger Burdens

CHICAGO — How much are your convenience-store customers willing to pay for a hamburger?

It might be less than the gourmet Kobe beef burger at the restaurant down the street, but more and more consumers noticed the cost of a good hamburger started inching higher last year. Fortunately, foodservice operators have ways to stem potential burger-sale losses.

Deanna Jordan, senior research analyst at Technomic in Chicago, wrote in a recent blog post that consumers might not yet be talking—or walking—with their wallets, but they are cognizant of the hamburger price hike. Fifty-one percent say they have noticed the increase over the past year, according to Technomic’s 2015 Burger Consumer Trend Report.

Going back to last November, the U.S. Department of Agriculture had expected the beef supply to decline 3.6%, or 1 billion pounds, in 2015 as domestic production decreased and imports were constrained by tight global supply.

Last fall, the retail price of ground beef rose 17% from the year-earlier period as steaks and roasts got pricier, according to the U.S. Bureau of Labor Statistics.

Operators, wrote Jordan, have at least three options to keep the burgers flipping and avoid consumer backlash. The three include:

  • Blended patties. There’s no doubt that consumers associate premium burgers with high-quality meat more so than with any other attribute, wrote Jordan. As beef prices rise, offering blended patties with less expensive meats like pork, value cuts like beef brisket and even nonmeat ingredients like mushrooms can help operators balance high food costs while offering variety and uniqueness. Stuffed burgers, which appeal to 30% of consumers, can serve the same purpose.
  • Specialty toppings. Although meat quality still outranks all other attributes, fewer consumers now than in 2013 say the quality of the meat makes a burger premium, indicating opportunity to convey quality through ingredients beyond the middle of the burger, wrote Jordan. The analyst remarked that high-quality vegetable toppings, artisan/specialty cheeses, specialty toppings and house-made ingredients all rank among the leading attributes that consumers associate with a premium burger. These nonprotein ingredients are ostensibly cheaper and can be added as an option for an upcharge, said Jordan.
  • Premium sides. About 44% of consumers say they usually order a burger as part of a combo meal. Sides are a key part of the burger occasion, wrote Jordan. Premium side offerings, such as sweet-potato and natural-cut fries and sea-salt finishers, can be utilized to drive brand differentiation and appeal to consumers’ desires for unique and premium offerings. She cited Wendy’s Baconator Fries to “premium-ize” its side offerings and capitalize on the success of its popular namesake menu item.

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