The Burger Bubble

Modern lessons from that essential American craving

"The once-humble hamburger has gotten too fancy for its own good." writes the Wall Street Journal's Julie Jargon, who pithily sums up the dilemma:

As the number of outlets serving “better” burgers— featuring nontraditional toppings and artisan buns—skyrocketed over the past decade, so has the average burger tab, turning some customers off.

Brian Cockerline, a 20-year-old Rutgers University student, used to go to Five Guys for a burger once a week in South Plainfield, N.J. With fries and a drink, his tab was around $13. Now, he is cooking burgers at home instead.

“I like Five Guys but I can buy ground beef and one onion and get pretty close to the same burger for half the cost,” says Mr. Cockerline, who rarely goes to Five Guys anymore. “A hamburger, to me, is not a luxury,” he said.

Mrs. Jargon goes on to note two eye-opening facts that belie the fulsome expansion of "better burgers" into almost every part of the country. Most importantly, lunch traffic to quick-serve hamburger restaurants dropped by 5% last year. That steep decline is the largest year-over-year decline that market-research firm NPD Group Inc. has ever recorded.

“It’s not sustainable for them to expect people to show up and spend $13 on a burger on a consistent basis,” said Kurt Kane, chief concept and marketing officer at Wendy’s Co. That would seem sage analysis indeed: Mr. Cockerline now mostly goes to Wendy’s when he is too busy to cook—because he can’t make a meal any cheaper than $4, he said.

A second fact underlines the simple economics: Wendy's own internal analysis show that, on average, people only have $4 to $6 to spend on lunch each day.

Read more of Julie Jargon's excellent article…

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Drinks Without The Booze

As more customers limit alcohol intake, mocktails and alternative drinks are having a moment

The Guardian's Kate Hawkins points out that alcohol consumption, especially in younger age groups, has fallen steeply. In the UK, the number of drinkers fell 26% between 2002 and 2012. Moreover, the number of young between 16-25 that drinks little or not at all has risen by 40% in that same decade.

The trend isn't limited to the UK. Data from the Washington Post show that a full 70% of Americans aren't really "commercially-viable" drinkers.

That 70th percentile consumes a miserly 2.17 drinks a week. Put another way, 75% of alcohol consumed each week is sipped by the top 10% of adults. If your restaurant has an average clientele of, say, 500 people only 150 of them seem likely to order beer, cocktails or wine.

Flipping that equation over, it's long-understood that soft drinks have some of the fattest margins of any food item. Are there ways to turn your teetotaler patrons into paying drinkers?

Examining The Options

The Guardian article goes on to examine several smart non-alcoholic options, including varieties of beer, wine and related. It's worth a look. However, the NY Post did a real-world piece on a selection of similar drinks, to decidedly mixed results. But, spoiler-alert, the final choice did come off quite well:

The New York Times did a small survey of Mocktails last year. While even Starbucks has gotten in the act - with some interesting ingredients to boot (like barrel-aged maple syrup!).

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