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Round 2 of the Burger Brackets Has Begun!

Round 1 is complete. The field has been reduced from 64 to 32. But there really aren’t any losers. Every burger brand that came up short put up a crazy good fight. Burgers rule because Americans love their burgers and their favorite places to eat them. That’s what the Burger Brackets show! A crazy total of 68,817 votes were cast just during the first round. You folks had your brand’s back!

But Round 2 is tougher because it lasts just two days. Voting closes at 7 p.m. CT on Sunday, March 23. So get the troops re-energized and get them voting. The Round 2 matchups are below. CLICK HERE to go to the A.1. Burger Brackets Voting Page. Good luck to all!

Round 2 MatchUps


Breaking Down the Top 5 Burger Chains

2013 Top 5 Chain Sales The 10-Ks have been filed with the SEC allowing the annual comparative look at the balance of power among the largest burger chains. There’s one significant change this year.

A few years back, it was widely reported that Wendy’s had passed Burger King and become the No. 2 burger chain. News outlets repeated it again and again. But it wasn’t correct because it was based on an estimate of Burger King’s sales that proved to be well below the actual sales number that Burger King provided when it became publicly held again.

But now it actually may be true that Wendy’s ranks No. 2 in U.S./Canada sales (it and BK report North American sales). The two chains were fairly close before but Wendy’s saw a 1.8% gain in same-store sales in 2013 while Burger King’s total domestic sales declined slightly due to a 0.9% drop in same-store sales. By my estimate, Wendy’s has inched ahead of Burger King in North American sales.

That said, the difference between being Nos. 2 or 3 in North America is fairly unimportant. Increasingly, the quick-service burger business at the top is a global industry. That’s confirmed by an interesting passage in McDonald’s 10-K where the world’s largest restaurant chain defines its competition, which includes everyone down to the taco truck on the corner:

  • “The Company’s primary competition, which management refers to as the informal eating out (“IEO”) segment, includes the following restaurant categories defined by Euromonitor International: quick-service eating establishments, casual dining full-service restaurants, street stalls or kiosks, cafés, 100% home delivery/takeaway providers, specialist coffee shops, self-service cafeterias and juice/smoothie bars. Market data related to cafés is separately available and now included in the IEO segment. The IEO segment excludes establishments that primarily serve alcohol and full-service restaurants other than casual dining.
  •     “Based on data from Euromonitor International, the global IEO segment was composed of approximately 8 million outlets and generated $1.2 trillion in annual sales in 2012, the most recent year for which data is available. McDonald’s Systemwide 2012 restaurant business accounted for 0.4% of those outlets and about 8% of the sales.
  •     “Management also on occasion benchmarks McDonald’s against the entire restaurant industry, including the IEO segment defined above and all other full-service restaurants. Based on data from Euromonitor International, the restaurant industry was composed of approximately 16 million outlets and generated $2.3 trillion in annual sales in 2012. McDonald’s Systemwide restaurant business accounted for 0.2% of those outlets and about 4% of the sales.”

Because CKE Restaurants is now privately held, there’s no solid data on its two chains this year. But I’d say Hardee’s continues at No. 6 with estimated 2013 sales of $2.2 billion while Carl’s Jr. would be No. 7 with an estimated $1.7 billion in sales. Put Whataburger No. 8 at an estimated $1.55 billion.

Here are a few other interesting bits from the Top 5 Burger Chains’ SEC filings:

  • Motley Fool, which delights in writing foolish things, recently ran a piece suggesting that Burger King is making “strategic moves aimed directly at dethroning its larger rival McDonald’s.” This is nonsense, of course, considering among many other things, McDonald’s average restaurant sales, which are double those for Burger King. Satisfries are great and all, but BK isn’t dethroning anyone soon.
  • Jack in the Box says  70% of its sales at company stores come via its drive-thru windows. For Wendy’s, 64.8% of sales are through the window.
  • Wendy’s is shifting ad spending in favor of national media. Last year, franchisees contributed 3.25% of retail sales for national advertising and 0.75% for local/regional ads. Beginning this year the mix is 3.5% national/0.5% local.
  • Burger King notes that entered into contracts with Coca-Cola Co. and Dr Pepper/Snapple Inc. to offer their soda brands. The contract obligates BK to purchase a specified number of gallons of soft-drink syrup. How much? “As of December 31, 2013, we estimate that it will take approximately 16 years to complete the Coca-Cola and Dr Pepper/Snapple, Inc. purchase commitments.” Drink up.

McDonald’s COO Fenton Retiring in October

Tim FentonMcDonald’s Corp. has realigned some management roles following the surprising announcement that Tim Fenton will step down as chief operating officer, effective Oct. 1, 2014. Fenton, 56, who has worked with McDonald’s for 41 years, said he needed to step aside due to chronic asthma.

“I simply cannot continue to meet the global travel demands of this position and will focus on improving my health closer to home,” Fenton (r.) said in a company announcement. “I intend to always be of service to this great company, our employees, customers and suppliers.”

The company said Fenton will continue to serve as COO during a transition period after which he will function as a special advisor to CEO Don Thompson focused on global franchising, restaurant portfolio optimization and other strategic business initiatives.

The company will not replace Fenton in the COO title. Instead it elected CFO Peter Bensen and Global Chief Brand Officer Steve Easterbrook executive vice presidents and expanded responsibilities for each of them. Bensen will assume oversight for worldwide supply chain, development and franchising. Easterbrook will take on oversight for the Restaurant Solutions Group; corporate strategy; and the Global CSR [corporate social responsibility], Sustainability and Philanthropy department.

Burger Fan Visits Every Pal’s in One Day

Talk about the bond between a brand and its buyer and this is what you mean. Joshua Baxter is a native of Kingsport, Tenn., but moved to Seattle six years ago. One of the things he says he misses most is Pal’s Sudden Service, the 57-year-old,  double-drive-thru burger chain that’s headquartered in Kingsport.

On visits home, Baxter often had eaten at several Pal’s just to hold him until the next time, he told the Times News. But before a recent trip back to Tennessee, Baxter said he decided to go all out and plan a route that would take him to all 26 Pal’s in a single run. The trip took a little more than 13 hours and took him 400 miles across Tennessee and Virginia. His wife thought the idea was, well, “a little out of the ordinary,” he said.

At every stop, “I definitely got a Frenchie Fry, and tea as needed,”  Baxter said. But he did more than gobble fries. At each Pal’s he left $5, paying forward for the next Pal’s customer. “I guess that was me making it a little more worthwhile,” he said.

“Pal’s is Pal’s. There’s no comparison,” Baxter said in explaining his journey.

How Burger Dive Bested the Burger Bash

Michael Symon—TV Iron Chef and B Spot owner—won the People’s Choice award for the fourth time at this year’s South Beach Wine & Food Festival Burger Bash. But the Best of the Bash award was won by someone who doesn’t have a TV show or a string of restaurants:  Brad Halsten, owner of The Burger Dive in Billings, Mont. His Blackened Sabbath burger with blackened spice, bacon, a beer-battered onion ring, garlic-basil mayo, goat cheese and arugula bested some of the biggest names in burgers. Halsten won $10,000 and a promise from Red Robin, which sponsors the award, that his burger will be the inspiration for a future entry in its Finest premium-burger line. BurgerBusiness.com caught up with Brad Halsten back in Billings.

Brad Halsten receives his Best of the Bash check from Bash host Rachael Ray and judge/TV show host Robert Irvine.

Brad Halsten receives his Best of the Bash check from Bash host Rachael Ray and judge/TV show host Robert Irvine.

How did a burger chef from Billings end up on a stage in Miami with an oversize check?
Well, I’d heard of the Burger Bash and I always wanted to go test myself and my place against the top burger joints and the chefs I’d seen on TV. I wanted to be part of it.

So last June I searched out who was in charge of the food festivals in New York City and South Beach and I found [festival founder] Lee Schrager’s name. I figured I’d just send him an email and see what happened. He could ignore me or tell me to go away or respond. And within two hours I got a reply from Lee that said, “Just returned from Montana and you’re on my radar.”

Coincidentally a week or two before I contacted him he was here and ate at our place. I guess that’s what he does, but he already knew us. Then in August we got an invitation.

You had six months to prepare? How many burger ideas did you go through before deciding what you’d serve?
Honestly not a whole lot. I really only tried a couple of ideas and with the first one that I started serving to customers—we called it The Test Pattern—they said, “This is the one.” Some regulars said it was the best burger they ever had. So we went with it. We served it as a special off and on just to keep getting feedback.

It’s a twist on the Blackened Sabbath burger I already had on the menu. We just took it to a new level. We changed it from blue cheese to goat cheese because that’s kind of hot right now. And I added arugula to the bottom bun because I watched videos from past Bashes and Spike Mendelsohn [of D.C.'s Good Stuff Eatery] was a judge one year. He said one of the things they were looking out for were soggy buns. I wanted to make sure I didn’t have a soggy bottom bun. I put mayonnaise on the bottom bun and added arugula to keep the burger juices out. Click here to continue reading How Burger Dive Bested the Burger Bash

Checks Rise But Customer Traffic Thins

Source: The NPD Group (click for larger)

Source: The NPD Group (click for larger)

The U.S. foodservice industry saw a 1% decline in customer traffic in 2013’s Q4 coupled with a 1.8% increase in spending (though much of that likely is from menu price hikes). Increasing both traffic and check proved to be difficult at the end of last year, according to new data from The NPD Group.

In Canada, customer traffic was down 2% while average check was up just 0.6%. The United Kingdom fared better with a 2% increase in traffic and essentially flat check.

The surprising marketplaces were Australia and Russia. Australia enjoyed a 1% traffic increase coupled with a 4% spending increase. An improved economy and its move into summer during Q4 helped sales. Russia experienced the largest gain in traffic—7%—and a 7.9% boost in spending.

“In spite of an economic slowdown and low consumer confidence, foodservice traffic in Russia showed a decent 7 percent growth in the last quarter of 2013,” Maria Bertoch, director-NPD Russia Foodservice, said in announcing the results. “The key reason for this dynamic growth is that the Russian foodservice market is still very young and far from saturated.”

Hopdoddy Eyes SoCal and Beyond

Hopdoddy Burger Bar opened in Austin, Texas, in 2011, one of a wave of “better burger” concepts changing the category. But it was ahead of the next trend, which was to make the bar an equally important part of the burger-bar concept. Hopdoddy’s menu features 10 signature burgers made with all-natural Black Angus beef, bison, lamb, turkey or tuna (plus a veggie burger). Burger prices average about $8. Beverages include local craft beers and craft cocktails and wine splits. There are now four Hopdoddys open, with more planned across the country. BurgerBusiness.co m spoke with Hopdoddy President/COO Dan Mesches about those plans.

Hopdoddy Burger Bar

Hopdoddy Burger Bar

So have you been asked about the Hopdoddy name so many times yet that you regret the choice?
Oh, no. We’re happy with it because it really describes who we are. “Hop” because beer is such an important part of what we do and who we are. And then “doddy” is a nickname for the Black Angus cow that we use for our burgers. So it’s fun and it draws attention. I never get tired of explaining it.

You put a lot of thought into the details of the concept as well as the name. Do your customers see and appreciate it?
We have a very loyal guest base and it keeps growing. And I think people appreciate that we’re grinding all our meat in house and the meat is hormone- and antibiotic-free. They appreciate that we bake buns all day and cut our own fries.. I think they understand how important the quality of ingredients is to us as well as to them. The care and thought that has gone into the concept and the hand-crafted products we sell certainly resonate with a lot of folks these days.

You’ve looked to set yourself apart a bit from the traditional fast-casual model, haven’t you?
Well, I like fast-casual dining but I don’t like the part where you get your tray and you have to stare at people to get them to leave so you can have their table. I think we’ve changed the model on that. Yes you wait in line, but we don’t take your order until we have a table for you. Then we deliver your order to you at your seat in 8 to 10 minutes and it gets more full-service.

The Llano Poblano Burger: Angus beef, pepper-Jack, roasted poblanos, apple-smoked bacon and chipotle mayo.

The Llano Poblano Burger: Angus beef, pepper-Jack, roasted poblanos, apple-smoked bacon and chipotle mayo.

We have a program called “Love the Line.” We think the line is a party, so we sample margaritas or truffle fries or milk shakes there. And our line goes right by our bar so if you’re waiting you can order beers or cocktails in line. We try to make it fun. Our main demographic of 21-to-34-year-olds really enjoy going out as a social thing. “Love the Line” makes it work and makes people comfortable with it. It’s a very important part of who we are.

Was the line program part of Hopdoddy’s operation from the start?
We certainly tweaked it here and there. But the notion of it was in place from the beginning. It’s refined as word has grown and we’ve gotten busier.

Tell me one or two improvements you’ve made.
One of the best additions was the Burger Bouncer. That’s a person who explains the ordering process and who works the line because there’s nothing worse than being in a line and feeling that you don’t know what’s going on with it. So we have people who help. We started the Burger Bouncer position last year.

And we added a Line Server so that if you want a beer, or soda or cocktail while you wait we can get that for you. Both of those positions have been important to improving the experience. Click here to continue reading Hopdoddy Eyes SoCal and Beyond

Burger Brackets Round 1 Voting Has Begun!

Click to enlarge

Click to enlarge

Have you voted yet? Round 1 in the 2014 A.1. Burger Brackets has begun. You have until 7 pm CT on March 21 to vote in the Round of 64. But be careful: Round 2 voting is open just until 7 pm CT on March 23!

Once again, there are 64 burger brands competing for the Championship Trophy, the winner of which will be decided on April 7, when the field has narrowed to just two. Last year’s winner was Burgatory in Pittsburgh. Think you can match them for fan support?

Who’s in? Click on the brackets spreadsheet at right to see who this year’s 64 competitors are and who they face in Round 1. Seeding is determined by past performance, social-media strength and more. You can vote in every matchup in each round or just find your favorite. Check the “Birds Eye View” tab on the voting page to see the matchups.

CLICK HERE to go to the 2014 A.1. Burger Brackets page and VOTE. The complete schedule for all six rounds is there. You can vote once a day.

The Burger Brackets are made possible by the sponsorship of A.1. Steak Sauce. OPERATORS: Please click on the A.1. ad on the home page or on the Burger Brackets page to request a free A.1. merchandising kit!

It’s all in good fun to celebrate the unique bond between burger lovers and their favorite burger joint.