Wisconsin Cheese Adds Value

When you turn cheeseburgers into Wisconsin Cheeseburgers, you’re not just adding extra flavor, you’re adding the prestige of award-winning quality. Quality your customers will pay a premium for.
Click HERE to visit the Wisconsin Cheese Burger page and get the recipe for the Wisconsin Gouda Garlic Burger shown below!


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Independent Burgers’ Growth Falters

The number of limited-service burger restaurants declined in the past year, following several years of dramatic unit growth that contrasted with slow growth for burger chain restaurants.

The NPD Group’s Spring 2015 census of restaurants open as of March 31, 2015, shows a 1% drop in the overall number of restaurants (all types), driven by a 3% falloff in the number of independent restaurants (all types). The number of chain restaurants increased to 288,585, which still trails the 340,135 total for all independent restaurants.

Overall the QSR burger category remained flat. But the number of independents open as of March 31 dipped by 1.8% (less than the overall decline in independents) to 6,092. Burger chain locations increased less than 1% to 45,555.

NPD Burger Unit Counts

Source: The NPD Group

Even such a relatively small decline for independent burger restaurants as 1.8% for the past year is startling given that the independent segment was up 6% last spring and up 7.2% year-over-year in 2013. The number of burger chain locations has not risen by more than 1% in any year for the last five at least.

Earlier this month NPD announced that customer traffic at QSR burger chain restaurants has declined by 3% over the past five years. However, customer counts at independent burger restaurants were actually up 1% for the year ended May 2015 and are up 3.5% since the 12 months ended in May 2011. That data makes the decline in independent burger restaurants even more surprising.

NPD says the decrease in independent restaurants overall was concentrated in the full-service segment (casual dining, midscale/family dining, and fine dining).  Full-service independent units were down 3% while QSR independent units remained stable. However, the number of fast-casual restaurants (of all menu types) was 7% higher than a year ago.

NPD called the overall restaurant decline “a reflection of the stalled traffic growth experienced by the foodservice industry over the past several years.  Independent traffic, quick service hamburger, and full service restaurant visit declines, particularly at midscale/family dining restaurants, are contributing to industry traffic not growing.”

As Expected, Chanticleer Buys Little Big Burger

Sure enough. As forecast here in May, Chanticleer Holdings announced a deal to acquire the eight-unit Little Big Burger chain based in Portland. It’s fifth regional burger brand Chanticleer has purchased, following acquisitions of American Roadside Burgers, The Burger Co., BGR The Burger Joint and BT’s Burger Joint, all on the East coast. This acquisition takes Chanticleer into the Pacific Northwest for the first time, giving it bi-coastal presence.LittleBigBurger open

“With Little Big Burger, we have purchased a brand with iconic status and following amongst a new generation of burger-lovers in Oregon. The restaurants are unique in their design and allow a level of interaction with chefs and the cooking process that we’ve never seen before in the burger industry. This is a tremendous opportunity to capitalize on a regionally prominent brand with a proven scalable business model. Little Big Burger’s unit economic model with EBITDA margin greater than 25% will be accretive to Chanticleer’s earnings and provide a great addition to our portfolio of brands,” Mike Pruitt, CEO of Chanticleer Holdings Inc., said in a release announcing the deal, which closes Aug. 14, 2015. “Today’s announcement further strengthens our position and takes us closer to profitability and achieving our ambition to become the leading global exporter of successful and much-loved American brands.”

Little Big Burger (LBB) was created in 2010 by Portland restaurateurs Micah Camden and Katie Poppe. A ninth location opens this fall in Portland, where all but a unit Eugene, Ore., are located. Camden and Poppe also operate Blue Star Donuts and a fried-chicken concept called Son of a Biscuit.

“LBB is a very well-known brand in the Pacific Northwest; people are fanatical about it. So there’s a real opportunity to further expand in Portland and beyond to markets such as Seattle,” Rob Wright told BurgerBusiness.com. The managing director of Portland’s Meriwether Group, a Portland-based advisory firm that served as exclusive financial advisor to the owners, Wright says Camden and Poppe “recognized that LBB was probably better served in the hands of someone who knows how to do [regional expansion] and has the resources to do it.”

Wright said Meriwether Group spent about nine months running “a very tight [survey] of buyers we thought would understand the company and culture. We talked to a handful of people we thought might be good partners for LBB going forward. Chanticleer proved to be a very good fit. We felt they really understood the better-burger market and had a feel for the culture of LBB, which was critical to Mike and Katy.”

Chanticleer did not disclose a sale price but said LBB had 2014 revenues of about $6 million.

LBB will retain its name and its style as it expands under Chanticleer, says Wright. The concept now offers a very limited menu: a cheeseburger and hamburger, both ¼-lb. patties of Cascade organic beef; a veggie burger, soda, float and beer.

“It’s very exciting to add another award-winning better burger concept to our portfolio. Micah and Katie have done a tremendous job establishing a brand that burger lovers in the region crave. We look forward to taking LBB to the next level and beyond,” said Rich Adams, president-COO of American Burger Company, Chanticleer’s burger brand unit.

McDonald’s Tests ‘Gourmet Breakfast’

Already testing all-day breakfast, McDonald’s Australia operation—which developed the Create Your Taste platform, McCafé and other ideas now in the U.S.—is testing an upscale “Gourmet Breakfast” menu in at least one market, BurgerBusiness.com has learned.

McDonalds Gourmet Breakfast in Australia

(photo credit Lauren Waters)

All-day breakfast, launched July 2 in the Illawarra region south of Sydney and since spread to the Gold Coast region on the east coast, is more limited than the U.S. trial. Just six items from the regular breakfast menu—Bacon & Egg McMuffin, Sausage & Egg McMuffin, Sausage McMuffin, Hash Brown, Hotcakes and English Muffin (with honey, Vegemite or strawberry jam)—are being offered 24 hours a day. The U.S. test, which launched in April, includes nine breakfast items.

Gourmet Breakfast, testing in Annerley, a Brisbane suburb in Queensland, is a completely new morning menu, anchored by a “Café Breakfast” platter of toasted sourdough bread, bacon, two chipolata sausage (a small pork sausage) links, scrambled eggs, wilted spinach, grilled tomatoes, a hash brown patty and tomato relish.

McDonald's Gourmet Breakfast 2

(photo credit Lauren Waters)

Also on the menu are Belgian waffles with yogurt and fruit; a corn fritter platter with avocado, grilled tomatoes, crumbled feta cheese, tomato relish and spinach; a Bacon and Egg Roll (bacon, egg, spinach and tomato relish on a toasted brioche-style bun); and an Avocado Smash platter with toasted sourdough, mashed avocado, crumbled feta, spinach and sliced tomato.

Point-of-purchase merchandising says diners can customize Gourmet Breakfast items “at the kiosk,” presumably the same kiosk used for building Create Your Taste burgers.

McDonald’s Australia has long been interested in elevating perception of the brand through higher-end menu items. This has included an “M Selections” menu, tested in 2011, that included an Angus the Great and Grand Chicken burgers plus a NYC Benedict Bagel at breakfast, plus the Chicken Schnitzel & Citrus Mayo, Chicken Schnitzel & BBQ rolls and Angus & Egg Brekkie breakfast burger last year. Last December, McDonald’s opened The Corner, a healthy-foods café, in Sydney. Recent additions the The Corner’s menu have been a Mash & Lamb Winter Protein Box and a Lemon Lime & Bitters beverage.

Burger Chain Traffic Continues Decline

While overall foodservice customer traffic is at its highest level in six years thanks to breakfast popularity and spending is up, customer counts at QSR burger chain restaurants continue to slip, according to new data from The NPD Group.

McDonald's customers in EuropeFor the 12 months ended in May 2015, restaurant and foodservice visits were 61.1 billion, compared with 60.6 billion visits during the comparable period ended May 2010. However, customer traffic at QSR burger chain restaurants has declined by 3% over the past five years.

However, traffic at independent burger restaurants was actually up 1% for the year ended May 2015 and is up 3.5% since the 12 months ended in May 2011. Traffic has dipped 2% at independents overall (all menu types) in the past five years.

Total foodservice traffic rose 1% in the year ended May 2015; total QSR category saw traffic rise by 1%. Midscale/family-dining restaurants experienced a 3% decline over that period. Casual dining ended a long decline in traffic to remain flat.

A 3% increase in spending in the year ended May 2015 was driven by a higher average check average (itself driven by higher menu prices, no doubt).

Breakfast was the star daypart in the year ended May 2015, with customer traffic up 4%. QSRs accounted for most of the breakfast gains. Lunch and dinner were flat for the foodservice industry; afternoon snack traffic declined by 2%.

Burger King, Tim Hortons Flex Muscles

Restaurant Brands International (RBI) reported Q2 sales so strong that it invites the question of when its $17 billion Burger King and $6 billion Tim Hortons brands will begin to cannibalize each other.

Burger King A.1. Cheeseburger

Burger King’s A.1. Hearty Mozzarella Bacon Cheeseburger

“Strength” was a word repeatedly used by RBI CEO Daniel Schwartz, and with good reason. Burger King’s 6.7% increase in global same-store sales was its best showing in nearly 10 years. That included a 7.9% rise in the U.S./Canada and a 5.1% jump in Europe/Middle East. RBI did not disclose how much of its same-store-sales growth was from price/check and how much from traffic gains. Schwartz pointed to the success of the A.1. Hearty Mozzarella Bacon Cheeseburger—noting that the A.1. Sauce was the only new ingredient in that build—Extra Long Pulled Pork Sandwich and Chicken Fries in explaining the sales gain.

Tim Hortons’ quarter was almost as impressive, with a 5.5% systemwide increase in same-store sales. Its U.S. stores performed better (+7%) than its Canadian unit (+5.4%). A new Dark Roast coffee and dessert items such as the Creamy Chocolate Chill were strong performers. But Tim also improved its lunch menu with items such as a beefy Philly Steak Panini.Tim Hortons Steak Panini

And that’s where the potential for sibling conflict arises. The more Tim Horton expands in the U.S., the more it competes with Burger King for breakfast, lunch, dinner and snack dollars. RBI can happily concede the Canadian market to Tim Hortons, which has 3,819 stores there while Burger King has less than 300. But in the U.S., there are 892 Tim Hortons and RBI wants more. It recently opened its first store in St. Louis, so it’s no longer just hugging the U.S./Canadian border. The more it expands, the more customers will be asked to choose between a Whopper and a panini. For now, however, RBI and its shareholders are enjoying having two strong brands.

Monday Meeting: Line Extensions Rule

This is high season for QSR menu expansion. New beef, chicken and other burgers sprout on menus in the heat. Begin your week by catching up on these bits of burger news that you might have missed:

Wendy's Spicy Chicken

Wendy’s Spicy Chicken

Wendy’s today starts  a new campaign for its Spicy Chicken Sandwich, flavored with a mix of black pepper, chili pepper and mustard seed and topped with lettuce, tomato and mayo. Introduced in 1996, the burger has been popular since. Suggested price is $4.49.

Carl’s Jr./Hardee’s has busted the $5 price ceiling with the first extension of the All-Natural Burger introduced in spring. The Mushroom & Swiss All-Natural Burger tops the natural beef patty with “natural hand-picked sautéed mushrooms,” natural Swiss cheese, tomatoes, mayo, lettuce and red onion and serves it on a baked-in-house bun. The new burger is priced at $5.39, or as a double burger for $7.89. The original All-Natural Burger came out at $4.49. Rising beef prices showing? Click here to continue reading Monday Meeting: Line Extensions Rule

The Week’s Most Intriguing Burgers 7/24

I knew there was no way I’d be able to keep this list to the usual seven burgers. This has been a grand week for interesting burgers from all over the world. Represented below are burger bars in Lithuania, Italy, Canada, the UK and even Tasmania. I couldn’t even squeeze in the Asian burger from Burgerie in Berlin. The U.S. burgers look pretty darn good as well and there were many more I could have listed. It’s an amazing business.

The Rail, Canton, Ohio SPICY TORTILLA MELT An all-Ohio beef patty with sautéed onions, lettuce, tomatoes, fresh tortilla chips and house-made pepper-Jack cheese sauce on thick Texas Toast.

The Rail, Canton, Ohio
An all-Ohio beef patty with sautéed onions, lettuce, tomatoes, fresh tortilla chips and house-made pepper-Jack cheese sauce on thick Texas Toast.

Click here to continue reading The Week’s Most Intriguing Burgers 7/24

Is Menu Simplification Hurting McDonald’s?

McDonald’s Corp. President-CEO Steve Easterbrook boldly predicted the company’s now-seven-quarter-long string of down quarters globally will end in Q3. It came close in Q2: same-store sales were down just 0.7% in the quarter ended June 30, 2015. Certainly it helps to be lapping past declines, but the vow reflected his confidence that the turnaround he was brought in to engineer has begun. He cited several major markets showing sales and customer-traffic improvement.

Sirloin Third Pound burger sales didn't meet  expectations in Q2.

Sirloin Third Pound burger sales didn’t meet expectations in Q2.

But the U.S. business continues to lag other major markets. Domestic same-store sales were down 4% for Q2, but Easterbrook remains confident about an improvement. “I believe we’re making the right moves to stabilize the U.S. business,” he said. Those moves involve changes—more subtle than dramatic, he admitted—in value, service and menu. Toasting buns a few seconds more, changing how it sears and grills burger patties to improve juiciness: these are the menu improvements being made. Easterbrook reaffirmed that his plan is to improve core menu products and continue the menu-simplification initiative rather than return to a “frenzy” of new-product introductions. Is that the right strategy?

Canada saw new beef and chicken burgers, McLobster and poutine.

Canada saw new beef and chicken burgers, McLobster and poutine.

Easterbrook cited McDonald’s continuing success in the UK, Canada and Australia, and positive momentum in France and Germany. Since the beginning of the year, McDonald’s lone major addition has been the introduction of the there-item Sirloin Third Pound burger line. But the major markets that are recovering or improving have had more frequent and more varied product launches. Ironically, several of them are American-themed. Click here to continue reading Is Menu Simplification Hurting McDonald’s?