Gourmet Burger Sector Report January 2016 EXECUTIVE SUMMARY .......................................................................................................................... 5 Research background ..................................................................................................................... 5 Key findings .................................................................................................................................... 5 Recommendations .......................................................................................................................... 6 INTRODUCTION ...................................................................................................................................... 7 Background ..................................................................................................................................... 7 AIMS OF THE RESEARCH ......................................................................................................................... 7 OVERVIEW OF THE RESEARCH DESIGN .................................................................................................... 8 The beef burger market landscape ..................................................................................................................... 8 The beef burger foodservice customer ............................................................................................................... 8 Market drivers..................................................................................................................................................... 8 Online surveys.................................................................................................................................................... 9 STRUCTURE OF THE REPORT .................................................................................................................. 9 Terminology .................................................................................................................................. 10 Fast food burger restaurant .............................................................................................................................. 10 Gourmet burger ................................................................................................................................................ 10 Gourmet burger bar .......................................................................................................................................... 10 Risky burgers ................................................................................................................................................... 10 Abbreviations ................................................................................................................................ 10 GOURMET BURGER BAR MARKET CHARACTERISTICS ................................................................11 Introduction ................................................................................................................................... 11 Background ................................................................................................................................... 11 STRUCTURE OF THE MARKET ................................................................................................................ 12 Two leading players stand out in a fragmented market..................................................................................... 12 New wave of entrants since 2010 ..................................................................................................................... 12 Gourmet burgers pale in comparison to fast food burger outlets ...................................................................... 12 Figure 1: Leading gourmet burger restaurant chains, by outlet numbers, August 2015 .................................... 12 Leading chains’ turnover ............................................................................................................... 13 Fragmented nature of the market is apparent in operators qualifying as ‘small’................................................ 13 GBK and Byron lead the fragmented market .................................................................................................... 13 Figure 2: Leading gourmet burger restaurant chains, by turnover, 2010-2014 ................................................. 14 Planned expansion ....................................................................................................................... 15 Many leading chains plan to grow .................................................................................................................... 15 London remains main hub for gourmet burger bars .......................................................................................... 15 Rising property prices are a growing barrier ..................................................................................................... 15 Market continues to attract international entrants ............................................................................................. 16 Acquisitions suggest investor confidence in the market .................................................................................... 16 Some operators look beyond burgers ............................................................................................................... 16 Figure 3: Leading gourmet burger restaurant chains’ expansion plans, August 2015 ....................................... 17 MARKETING ......................................................................................................................................... 17 Above-the-line advertising spend ..................................................................................................................... 17 Figure 4: Recorded above-the-line online, display and direct mail total advertising expenditure by leading identified gourmet burger operators and leading burger bar chains, 2011-15 ................................................... 18 Social media presence ..................................................................................................................................... 18 Figure 5: Social media presence of the leading identified gourmet burger operators and leading burger bar chains, October 2015 ....................................................................................................................................... 18 RISKY BURGERS AT LEADING CHAINS .................................................................................................... 19 Methodology ..................................................................................................................................................... 19 Most leading chains serve burgers medium or pink .......................................................................................... 20 Figure 6: Mentions of pink/medium burgers being available at leading identified gourmet burger operators’ venues, October 2015 ...................................................................................................................................... 20 Figure 7: Menu descriptions referencing pink/medium burgers, October 2015 ................................................. 20 CONCLUSIONS ..................................................................................................................................... 21 COMPETING AND ALTERNATIVE CHANNELS..................................................................................22 Introduction ................................................................................................................................... 22 Fast food venues .......................................................................................................................... 22 Price points ...................................................................................................................................................... 22 Operating format .............................................................................................................................................. 22 © Mintel Group Ltd. All rights reserved. i Gourmet Burger Sector Report January 2016 Customer aspiration to trade up ....................................................................................................................... 23 Figure 8: Agreement with the statement “If I had more money I would eat at other food outlets/restaurants more instead of fast food restaurants”, by gender, age group and location, May 2015 ..................................... 23 McDonald’s explores customised and gourmet burgers ................................................................................... 23 Consumer interest in gourmet burgers at fast food venues .............................................................................. 23 Thicker burgers and premium breads appeal at fast food venues .................................................................... 24 Figure 9: Fast food restaurant menu enticements, May 2015 ........................................................................... 25 Pubs .............................................................................................................................................. 25 Burgers are a menu staple at pubs ..................................................................................................................