Ground game: Gourmet burgers boost beef demand

As U.S. consumers, especially millennials, look for hamburgers with more flavor and fresher beef, more restaurants are catering to the taste for “better burgers.”

Sales at companies offering gourmet or “better burgers,” which typically use fresh meat rather than frozen and often include exotic ingredients, jumped 15 percent last year over 2014 to $5 billion, according to Technomic, a research firm based in Chicago, home of the world’s largest livestock futures trading market.

Although that is still a small part of the $80 billion in total revenue for quick-serve restaurants, Technomic President Darren Tristano said revenues for top-end burgers could double to $10 billion by 2021, outpacing growth in regular burgers.

wShake Shack plans to open another 16 “Shacks” — its trademark trendy restaurants — domestically this year, while Chipotle Mexican Grill has applied to trademark “Better Burger” for its new brand of burger chains. Chipotle declined to say when it planned to launch burger chains.

The United States is already the biggest consumer of beef burgers, with servings of 30 per capita in 2015, compared with 24 per capita in No. 2 consumer Australia, according to New York-based NPD Group, a leading consumer research firm.

Restaurants are reaching out to new customers, who are willing to pay more for better-tasting, healthier burgers.

A double cheeseburger at Shake Shack costs about $8, compared with about $2 at McDonald’s in downtown Chicago. A gourmet burger with Wagyu beef, truffle and foie gras offered by Fleur restaurant at the Mandalay Bay in Las Vegas costs $65.

Even McDonald’s has been tempted to consider fresh beef instead of frozen for its burgers. The company is testing fresh beef in 14 restaurants in the Dallas area, spokeswoman Lisa McComb told Reuters, instead of flash-frozen beef.

The market offers ample room for growth. The most prominent better-burger stores such as Five Guys and Smashburger total fewer than 2,500 globally, compared with more than 50,000 outlets collectively operated by McDonald’s and Burger King.

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