Burger Wars, Part 1: Game Changers

Douglas J. Peckenpaugh, Community Director of Content/Culinary Editor

Only a few short years ago, the chain quick-service restaurant (QSR) field was sufficiently covered by the big three, namely McDonalds, Burger King and Wendysand heavily dominated by burgers. Sure, various regions featured their own players, with In-N-Out popular in California, Burgerville further north in Oregon and Washington, and Whataburger across the South. And when it comes to sliders, we had Krystal generally in the South and White Castle in the Midwest. Adding further burger diversity to the fray are Sonic, Jack in the Box, Dairy Queen, Hardees, Carls Jr. and Red Robin, all with 2011 U.S. sales over $1 million according to Technomics 2012 Top 500 Chain Restaurant Report.

But over the last few years, the burger game has changed considerably. We are clearly a nation of burger eatersU.S. estimates range from 150 to 200 burgers per year per capitaand were pushing our appetite for that quintessential American sandwich to new limits. Noted chefs and restaurateurs, like Hubert Keller, Bobby Flay, Daniel Boulud, Emeril Lagasse, Tom Colicchio and Danny Meyer, as well as TV celebrity chefs like Richard Blais, have added their own contributions to the field. Meanwhile, major cities like Chicagono stranger to beefhave seen the opening of multiple burger-centric restaurants, such as Kumas Corner, DMK Burger Bar, The Bad Apple, Epic Burger, M Burger and Tom & Eddiesand these continue to thrive. And just as quickly, a good handful of better burger chains like Smashburger and Five Guys have rapidly expanded across the country. The various approaches to these burgerssome of which are decidedly upscale and gourmet, with innovative and high-culinary toppings and bunshave seriously challenged our historically set criteria for burgers, forever raising the bar of expectations.

And all throughout, the big three continue their relentlessly waging of the burger wars, forcing industry changes as menu items see updates to bring them more into the competitive fray.

This first installment of a new, ongoing series of articles here on the Food Product Design website addressing this major foodservice industry trendwhich has begun trickling into the ranks of retailwill look at how the big three burger chains have adjusted the burgers on their menus to change with the times and jockey for increased market share; future articles in this series will address other parameters of this battle, including the challenges posed by the better burger chains (to review these burgers, see the "Better Burgers" Image Gallery), the impact of gourmet-level independents, a growing consumer desire for increased sustainability and transparency (tied to incremental distrust of big food), the importance of the international market, other aspects of the menu like perennially profitable breakfast items, and more.

Soaring Golden Arches

McDonalds has long maintained its dominance in the QSR burger field. Its statistics are nothing short of staggering. The burger-focused chain serves an estimated 68 million customers every day in over 119 countries at over 33,000 units. Technomic ranks the chain firmly in the No. slot, with $34,172,000 in U.S. sales during 2011, up 5.5% from 2010.

But maintaining momentum from year to year is challenging, even for a giant like McDonalds. The U.S. economy continues to pose struggles to most consumers and, as a result, the foodservice market has seen its share of seismic shifts in recent years as consumers dine out lessand when they do, they have begun trading up and down in search of the best value for their tightly guarded away-from-home dollars.

These challengesamong othershave altered consumer perceptions when it comes to the value of the McDonalds brand, and the company has reacted to help polish its image (Is McDonalds Losing That Lovin Feeling? Advertising Age, Feb. 20, 2012). This has included campaigns to demonstrate increased transparency regarding the origins of its ingredients, reformulation to remove pink slime (ammonia-treated beef trimmings) from its ground beef mix, and phasing-out use of gestation crates in what could prove an industry-changing move (all of which I will address in-depth in a future installment of this series centered on how the big three are altering business practices in the wake of shifting consumer perceptions of big food). After all, where McDonalds goes, the industry as a whole soon follows

Menu innovation is a key component to staying in touch with our ever-evolving American foodscape. On the burger end of things, this primarily was embodied in the release of the McDonalds premium third-pound Angus line in 2009: Angus Deluxe, Mushroom &Swiss and Bacon & Cheese, as well as a limited-time offer (LTO) Chipotle BBQ Bacon, all featuring 100% Angus beef and a new bakery style bun. The Angus line was originally test-marketed in Southern California, ostensibly to see how it would fare against competition like the Original Six Dollar Burger from Carls Jr., as well as the burgers from regional favorites In-N-Out Burger and Fatburger (McDonalds Angus Adds Higher-Priced Burger in the U.S., Bloomberg, July 1, 2009). Clearly it fared well, and a successful national rollout ensued, with the burgers remaining on the national menu to this day.

Wendys Takes Over No. 2

The No. 2 slot in the big three was long held by Burger King, but that recently changed after Wendys posted slightly higher U.S. sales figures for 2011 ($8.5 million for Wendys compared to $8.4 million for Burger King, per Technomic). From 2010 to 2011, Wendys increased sales by 1.9% while Burger King dropped 3.6%. This is the first time Wendys has held the No. 2 slot since the chain got its start in 1969.

Wendys entered the better burger game in 2009 with its Bacon & Blue burger, highlighting use of blue cheese crumbles. It was originally tested as an LTO, but made the full-time menu in 2010. However, it was eventually dropped from the national menu in the wake of the newly unveiled Wendys Daves Hot N Juicy burgers (replacing their standard single, double and triple burgers), which saw the chain analyze each component in the mix, resulting in a thicker, round patty and newly sourced crinkle-cut pickles and red onions, as well as toasted and buttered bunketchup, no mustard. The 2½-year project, dubbed Project Gold Hamburger, also yielded the W burger, which features a signature sauce (Wendys Remakes Its Burgers, USA Today, Sept. 21, 2011).

Fighting for the Kingdom

Burger King threw its crown into the better burgers ring back in 2010 when it released its Steakhouse XT line (the XT stood for the extra thick 7-oz. patty): a regular Steakhouse XT and an A.1. Steakhouse XT with fried onions and A.1. sauce, as well as an LTO Smoky Cheddar Steakhouse XT with smoky BBQ mayo, all on a bakery-style roll. These were a direct response to the McDonalds Angus line, as well as the mounting competition from smallerbut quickly growingupstart better burger chains. Later, in 2011, Burger King gave stuffed burgers a shot with the Jalapeño & Cheese BK Stuffed Steakhouse Burger, which featured a creamy, slightly spicy poblano sauce.

But losing the No. 2 spot to Wendys clearly didnt sit well. Later in 2011, Burger King tested an LTO California Whopper, featuring guacamole and bacon, along with the usual lettuce, tomato, onions and cheese, in a clear attempt to compete with Wendys fresh approach. But the overhaul at Burger King was just getting started.

In 2012, the company unveiled plans to once again become a publically traded company after going private just one year prior (Burger King Strikes Deal to Go Public Again, Nations Restaurant News, April 3, 2012). And other changes were afoot. Burger Kings approach to advertising and marketing changed, most notably dropping The King from commercials, a mascotif you willthat had been prominent in the chains rather offbeat ads since 2004, an approach geared toward the younger male demographic. Burger Kings new marketing approach seeks to appeal to a broader set of demographics.

This year has also brought a major menu overhaul for Burger King. Among other changes that align their offerings more closely with McDonaldsthe menu now includes four new salads, two chicken wraps, fruit smoothies and frappestheyve replaced the Steakhouse XT line with new Chefs Choice burgers, a standard burger thats on the regular menu (quarter-pound bacon cheeseburger on an artisan-style bun) and LTO Bacon & Bleu and Bacon Cheddar BBQ versions.

A Question of Fries

A key component of todays burger wars is french fries, that omnipresent salty side to savory burgers. McDonalds has long professed its superiority in the fry game, but in early 2011 Wendys self-proclaimed itself the new victor in the wake of an eight-city blind taste test it conducted, via an independent consultant, comparing its newly reformulated Natural Cut Fries With Sea Salt to those from McDonalds (Wendys reported that 56% of tasters preferred their fries, 39% preferred those from McDonalds, and 4% had no preference). After the new fries were released, sales increased by 16% (Wendys Heats Up French Fry Wars, QSR, April 10, 2011). Not to be outdone, Burger King also reformulated its fries in 2011, the first time it had tweaked its formula since 1998.

These ongoing tweaks to the big threes burgers and fries are nothing short of a perpetual need to remain one up on each other, as well as stay in step with the range of up-and-coming better burger chains, an aspect we will focus on in a future installment of this series.

The burger wars are still raging on the battlefield we call American QSR, with no armistice in sight.