John Chidsey, chief executive officer of Burger King, says the company's growth in Latin America was one of the main factors that attracted this past week's $3.3-billion (U.S.) buyout from 3G Capital Management Inc., a private investment firm largely funded by Brazilian backers. Meanwhile, McDonald's is thriving in emerging markets such as China. "Burgermania has been a force in the U.S. for at least a century, but even in a place like Germany, it's a relatively new thing," said Scott Hume, editor of Burgerbusiness.com
Fast-food chains used to believe no single item could cost more than $5. But McDonald's has broken that barrier. It's offering the Smokehouse Deluxe Burger in some Ontario outlets for $5.98 (Canadian.) Other chains, including Burger King, are also boosting prices to recoup margins eroded during the recession. "Chains are using a barbell strategy, mixing low priced items with premium priced items," Mr. Hume said. "Increasingly, they're tilting the balance toward the premium end."
Maybe it's too many lectures about healthy eating, or maybe it's just a desire for comfort food in tough times. For whatever reason, consumers appear willing to shell out increasing amounts for gourmet burgers, often made with organic meat and upscale toppings. Luxury burgers abound: a Florida restaurant is offering a $100 hamburger that doesn't even include fries.
A RECESSION-PROOF BUSINESS
In good times, people go out to eat; in tough times they still like a burger. Burgers and sandwiches were the only food category in the U.S. to grow at both quick-service restaurants and full-service restaurants in 2009, according to NPD Group, a market research firm. Total servings of burgers in 2009 were 9.3 billion. To put those numbers another way, the typical American downs 30 burgers a year, even in a recession.
INNOVATIONS IN PATTYLAND
Four-patty NY Pizza Burger. (Burger King's New York City location).
Three-patty X-tra Long Chili Cheese. (Burger King's Austrian locations).
Three-patty Tentation Hot Pepper (the French chain Quick).
Doughnut-shaped burgers. (4Food in New York City. The hole is filled with mushrooms).
BY THE NUMBERS
Cost of a Whopper Jr. sandwich at Burger King's U.S. chain, a recent hike from $1.
Cost of McDonald's new Smokehouse Deluxe burger in some Ontario outlets.
Cost of Burger's King's NY Pizza Burger, which contains four patties with pizza toppings.
Price of a brisket burger offered at Toronto's Nota Bene in May.
Cost of a burger at Florida's Boca Raton Resort and Club, which includes beef from three continents.
Sources: Burgerbusiness.com, The Economist, NPD Group, wires.