BATTLE OF THE BUNS
When it comes to fast-food favourites, the burger still reigns supreme, but is the growing health conscious and hipster movement threatening to change the burger business for good?
Will hipster burgers change the business for good?
Some would argue the greasy heydays of lard-laden fast-food restaurants have all but passed, with industry giants now eager to plug their healthy offerings and low-carb options.
The emerging healthy eating trend has given way for smaller players and new entrants to take market share from the big end of town, leading to a consistent pattern of incremental growth.
Bao Vuong, senior industry analyst for IBISWorld, predicts that rising consumer demand for nutritious fast food will continue to drive revenue for the sector, particularly over the next five years.
While for burger brands, it may sound like music to the ears, Vuong warns the shift in ideals will likely impact the operators that have staked their claim on fried and fatty.
“It can be very hard to keep up with constantly changing consumer preferences for fast-food chains,” Vuong says.
“One of the most important factors for fast-food operators in this changing environment is the ability to easily alter menus where necessary to maintain market share. Continuing health consciousness trends will hinder industry performance, especially for traditional operators, as consumers limit consumption of unhealthy food.”
HEALTHY VS HIPSTER
On the flip side, however, a generational push-back is seeing some Australian consumers fight the healthy eating fad, seeking out the biggest, most exorbitant feeds they can find.
Driven primarily by generation Y consumers, the “cheat meal” craze has seen a drop in millennial representation at traditional franchise burger chains and healthy-burger restaurants like Grill’d.
According to market research firm Roy Morgan, gen Y visitation at traditional fast-food staple chains McDonald’s and Hungry Jack’s dropped by an average 3.4 per cent between 2012 and 2016, while visitation at Grill’d dropped a whopping 2.6 per cent from 2014 to 2016.
Norman Morris, industry communications director at Roy Morgan Research says the growing “hipster-isation” of the burger industry is something that all chains should be addressing.
“The much-reported trend among ‘millennials’ (a group which spans approximately the first half of generation Z and the second half of gen Y) for hipster culinary experiences cannot be ignored,” Morris says.
“In fact, McDonald’s is actively addressing this, even opening an almost unbranded cafe (The Corner) in Sydney to try out potential hipster-friendly menu items before rolling them out in their stores.”
HUXTABURGER
Innovative Aussie franchise Huxtaburger is no stranger to millennial-minded marketing. Take a look at the brand’s 21,000 strong Instagram following and you’ll see a familiar pattern of 20-somethings searching for a fun fast-food fix on a slightly more upscale level.
With a full-service bar, sit-down eating and wealth of food-coma inducing fare, Huxtaburger has deliberately established itself as an immersive dining experience that caters to the gen Y market.
“It is a very deliberate part of our brand strategy to not just exist in the food space,” a member of the Huxtaburger executive team tells Inside Franchise Business.
“You’ll find that most food retailers focus on freshness, providence, quality and/or health. While these values are important to Huxtaburger, some of which form one of our key brand pillars, we also want to capture the hearts and minds of our Huxtamers.”
Since entering the QSR market, the brand has solidified its status as a gen Y and Z hub, going so far as to sign a partnership with Twentieth Century Fox Home Entertainment to celebrate 20 years of the iconic TV show Family Guy.
“Our brand strategy has had a strong PR focus over the past two years, so when Twentieth Century Fox Home Entertainment approached us, we jumped on the opportunity,” the executive says.
“Not only do we get to provide something unique and exciting and to our Huxtamers, the Family Guy partnership offers massive exposure to a new audience who are aligned with our target demographic.”
The two businesses collaborated and developed the Griffin Feed, a signature double patty, bacon burger paired with chips, gravy and secret salt, worthy of Peter Griffin himself.
Huxtaburger says the partnership marks the start of a number of new initiatives the brand is exploring this year, with franchisee profitability at the top of the priority list.
“We have a robust marketing plan this year to support franchisee profitability. We are really committed to this area of the business, so much so that last financial year we almost matched every dollar that our stores paid into the Huxtaburger store marketing fund.”
“Our mission is to create a strong brand and a community that people are proud to be a part of, outside of our food offering. We’re really excited to start exploring that more this year, especially in the digital space.”
You’ll find that most food retailers focus on freshness, providence, quality and/or health. While these values
are important to Huxtaburger, some of which form one of our key brand pillars, we also want to capture the hearts and minds of our
Huxtamers
LORD OF THE FRIES
On the other end of the hipster spectrum you’ll find the developing vegan culture, and in the franchise burger business, one Aussie brand has carved out an industry-leading reputation.
Starting as a vegetarian chain, Lord of the Fries recently made the move to 100 per cent vegan ingredients, addressing the growing health-conscious movement.
“Over the last few years, Australian consumers have shifted towards a plant-based diet that has seen LOTF become even
more relevant than before,” co-founder Mark Koronczyk says.
The Melbourne franchisor believes more burger chains will follow suit, dictated by driving consumer demand.
“Burgers and fries have been popular all over the world since the ‘60s but what is growing is that businesses are making ethical choices,” he says. “Consumers are influencing businesses to be more transparent about where their food is coming from and its effects on the planet.”
Similar to Vuong, Koronczyk believes the healthy eating and hipster movement is likely to bring a boost to the industry, encouraging more international players to make a move Down Under.
“There is definitely still room for burger brands to expand across the country,” he says. “A lot of fast food joints are currently trying to tap into the vegan movement and introduce plant-based options to their menus which will hopefully mean some more great partnerships with innovative food tech brands will come to Australia from around the world.”
CARL’S JR.
The international welcome is certainly getting through. Since opening its first store in Queensland just one year ago, Carl’s Jr. franchise owner, The Bansal Group has replicated the brand’s immense success in the US, Down Under.
With seven free-standing, drivethrough Carl’s Jr. locations in greater Brisbane, the group is on track to hit its target of 30 stores in Queensland over the next few years. However, Gaurav Bansal, group owner, confirms that expansion will only happen when the timing is right.
“In 2019, we’re continuing to expand in the Brisbane area, namely, Riverview, Forest Lakes, Eight Mile Plains and Berrinba. We’re also excited to introduce locations in regional Queensland this year such as Townsville and Rockhampton,” Bansal says.
The chain’s American influence is plain to see, a factor which Bansal believes is a key differential in the competitive burger business.
“Carl’s Jr.’s American roots allow us to bring something special to the table,” Bansal says. “Being born in the US marketplace, the Carl’s Jr. brand has tenacity. We’ve had to overcome great challenges in our category to compete with the other QSRs in the States and worldwide. I think that sort of influence will continue to grow and shape the way that Australians choose to dine.”
Consumers in this country are continually evolving, which is why
Bansal believes it’s important for QSR
and fast-food operators to be agile yet grounded in their key market offering.
“Before entering the burger market, be sure to ask: ‘Why is your burger different?’ and ‘How is your customer experience going to be different than the larger players in the market?’ Understand that well before you begin the franchising journey,” he says.
“The burger market has become particularly oversaturated in recent years, and only the strongest brands will survive long-term. It’s imperative to provide customers with consistent value, quality and choice to maintain good sales.”
HOG’S EXPRESS
So strong is Australia’s affinity for burgers that chains outside the sector have weighed into the market, introducing innovative models in order to compete.
In 2017, Aussie steakhouse franchise Hog’s Breath Cafe launched a QSR kiosk model to take a bite out of the booming burger industry.
Aptly named, the Hog’s Express fast-food business leverages the successful brand name, while at the same time offering an easily accessible, inexpensive alternative to its signature slow cooked prime rib.
“We know that consumers are increasingly busy and looking for quick, accessible and inexpensive food options, so we’re excited about the future of this model, and the versatility it affords us to pop up anywhere from shopping centres and petrol stations, to airports and cinemas,” says Hog’s Breath CEO, Ross Worth.
The brand is banking on convenience to drive growth, incorporating a mobile food truck business to coincide with the developing Express business.
“We’ve quietly trialled our food truck at several events in WA over the past few months, from local sporting fixtures to the Adele concert at Domain Stadium where we served more than 500 people in under three hours, and it was clear to us that Australia wants the option to grab a Hog’s fix on the go,” Worth says.
The burger market has become over-saturated in recent years and only the strongest brands will survive long term.
THE FUTURE
Like all sectors housed within the food and beverage industry, the burger business is undergoing a period of rapid change.
New technology and the implementation of delivery platforms are likely to alter the landscape forever, however Bao Vuong suggests it isn’t all bad.
“This is a huge positive. Demand for ordering platforms has grown exponentially over the past five years and to be able to tap into that, however small, is a boon to the industry,” he says.
“Although still only a small part of many fast-food chains’ revenue, this share can be expected to grow over the next five years as demand for convenience continues to grow. This has provided an extra stream from where fast-food chains can generate revenue, which is always a positive.”
As far as consumer tastes are concerned, Roy Morgan’s Norman Morris believes the only constant is change, but as long as convenience, taste and price still play a factor, it’s unlikely Australians will be taking burgers off the menu any time soon.
“Fast food brands wishing to gain an advantage over their rivals in this competitive and ever-changing market need to ensure they have an in-depth understanding of their customers (as well as those of their rivals) and how their culinary tastes are evolving,” he says.