Premium pull

There is no doubt that the burger market is mature. They are such a staple — both at home and in the foodservice domain — that most people are unable to say when or where they first had a burger.

However, there are still growth opportunities out there in the burger market. Indeed, research by Mintel has suggested the category will grow some 26% to £695m up to 2011. This is slightly below the growth of 29% to £551m that was witnessed in the 2005 to 2010 time period. But it is still growth – and in the current consumer environment, that is not to be sniffed at.

However, commentators also agree that a move towards the premium end of the market is where most of the value and penetration lies in the category. The rise of restaurants chains such as the Gourmet Burger Kitchen (GBK) and Byron (see panel, page 22) and the growth of gastro pubs mean that customers are looking to replicate the results at home.

When it comes to the burger at home, the major supermarket retailers reign supreme, selling 92.3% of all burgers according to Kantar Worldpanel.

Studies by the group also show that fresh is best when it comes to the category with £207m-worth of fresh burgers being sold in the 52 weeks to February 2011, an increase of 0.9% year-on-year. In comparison, frozen burgers fell by 6.7% to £116m, down from £124m for the same period in 2010. Taken as a whole, the burger market dipped slightly by -2% — from £330m to £323m. The total volume, according to Kantar Worldpanel, also dropped slightly from 68.6m t to 68.2m t — a decline of 0.6%.

So, looking at the headline figures, it would seem the mature burger market has stalled, or even worse, is shrinking. But research by Mintel suggests that the picture might not be as bleak as all that.
In its Burgers Market Intelligence Report, published in August 2010, the analysts at Mintel say there is a growing demand for people wanting to know what is in their burgers — and it also hints that there is a gap in the market for a branded premium offer to rival supermarket higher end offerings.

The report states: “The challenge for the market is to find ways to further develop the premium and indulgence role of the burger, creating associations comparable to those enjoyed, for example, by pizza (a food that 31% of the population see as a treat, and that 21% see fit for entertaining guests). Development at the premium end is one aspect of this.

“But there is also scope for brands to engage customers with messages and promotional strategies centring on culinary experimentation. Associating the burger with a broader range of cooking ingredients and styles, flavours and moods would help position it as more than just value-for-money ‘fuel’.”

This is backed up by Matthew Southam, a research and insight executive at the Agriculture & Horticulture Development Board (AHDB), who says: “If you look at sausage or bacon or any processed meat, there has been a move towards the premium offer. Burgers are no different. Consumers are better-educated and there is a perception among them that a value offer means a lower quality of meat. People are now more willing to buy from a premium burger range.”

Another factor impacting the rise of the premium burger is the recession, as Southam explains: “People are eating out less because of the cost, but they are not willing to completely go without treats. For that reason, there has been a flight for consumers to cook better meals at home — burgers have been a beneficiary of this trend. We are certainly seeing the supermarkets adding to their premium selection of burgers.”

A market leader at the premium end of the market is The Burger Manufacturing Company, the Powys-based sister company to Sparks Catering Butchers. It was formed in 2000 and specialises in steak burgers, Kobe burgers, Aberdeen Angus burgers and Kobe steaks, among a range of fast food and foodservice burgers. Last year, the company saw turnover reach around £5m — a figure forecast to increase, according to Mark Cornall, the company’s sales and marketing director. “Over the last 12 months, we have seen an increase in exports, taking the Sparks brand into Paris and selling into Spain and Gibraltar now,” he explains.

Cornall is also clear as to the reason behind The Burger Manufacturing Company’s success — “maintaining a consistent high-quality product and working closely with our customers within the top end of the market. We have been at forefront of the premium burger market for years,” he says. “Our ethics are very high as a company and we explain to customers exactly what they are getting when they purchase from our range. We are more than happy to get trading standards involved from day one when it comes to our products — because we make no false claims.”

Simon Howie Foods, the award winning Scottish butcher’s and producer, is another firm that has concentrated on the top end of the market. Its 10,000sq ft plant on the outskirts of Dunning near Perth is where it produces between 5,000 and 8,000 burgers for restaurants and the foodservice market. But despite the huge numbers, the company prides itself on working with its customers on tailor-making a bespoke burger. As director Gary Connacher explains: “When we work with a customer, we try to create a product that is unique to them. It will essentially be their burger. We meet the customer, discuss their needs, they meet our people and, together, we create the burger. It is the uniqueness of the offer that keeps people coming back to us.”

The company has recently been hard at work supplying burgers for Murrayfield during the Six Nations rugby for catering company the Supreme Group — an indication for Connacher that standards are rising across the industry. “Here you have rugby fans enjoying a gourmet burger.”

Connacher uses three cuts for Simon Howie Foods’ burgers — the shoulder, flank and clod and stick. On the machinery side, it uses the Vemag system supplied by Reiser, which he says helps with the quality of the product it crafts. “It cuts off in the right size, but leaves a homemade feel,” explains Connacher. “It also stops the double handling.”

The company also produces its burgers at a lower temperature than most, at around -3˚C to -4˚C, which Connacher says, “makes something that is quite light”.

But it is not just the craft end of the market that is bent on improving its burger offer; the multiples have also got involved in recent years. Caroline Dos-Santos, burger buyer for Tesco, explains: “We have seen good growth in burger sales in 2010 and continually innovate to improve our burger ranges and provide exciting new products at great value for our customers.”

The supermarket giant enjoyed a 20% increase in its burger sales in 2010 — and witnessed the biggest growth in its premium category. “We have seen the majority of growth in our Finest tier. This is due to an exciting range of premium burgers that offer great variety, value and choice to our customers. We have continued to expand our premium tier and Finest ranges. Last year we stocked a number of limited-edition flavours — Sweet Tomato and Basil, Cheddar and Chive, Tewkesbury Mustard — that proved exceptionally popular with customers,” adds Dos-Santos. “We also stocked a number of different pack sizes, including larger packs suitable for family occasions and celebrations.”
What is more, the retailer is predicting another strong year in 2011. “Burgers continue to be a firm family favourite and barbecues remain extremely popular with our customers in the warm summer months.  Throughout the rest of the year, customers are increasingly looking to burgers as an affordable source of protein,” she adds.

Asda has also been innovating on its premium end. As part of its Extra Special range, it recently introduced a new Mull of Kintyre Burger, which uses fully-flavoured British beef, with rich nutty award-winning Mull of Kintyre Cheddar and a sprinkling of chives.

Elsewhere in the retail sector, the multiples concentrated on introducing ‘melts’ — added ingredients — to the ready-to-cook burger market. Waitrose launched its easy-to-cook beefburgers with cheese & caramelised onion and was quickly followed down this route by Marks & Spencer, which developed and released its cook menu beefburgers with gruyère and cheddar cheese melts.

Despite this innovation and what seems like a relentess march to burger perfection, retail analysts agree there is still scope in the burger category for a branded fresh offer. This is hinted at by Mintel in its burger report from last year. It reveals that two out of five consumers express qualms about the ingredients quality of pre-prepared burgers – and that 49% of people would be willing to pay more for variants that use high-quality ingredients. The report states: “This indicates potential for development at the premium end of the market and for brands here to make traceability and purity part of their central proposition, perhaps linking simplicity and naturalness with more aspirational themes to promote their burgers as a ‘cut above’ the rest.”

It suggests premium sausage producers could move into the burger category. “Premium sausage brands Debbie & Andrews and Black Farmer, for example, could be well-placed to fill this gap, offering a higher-quality alternative to the own brand lines that currently dominate the market. Only 26% of consumers, in fact, consider the market’s own-brand premium variants to be worth the price,” it continues.

“The emphasis Debbie & Andrews and Black Farmer place on the artisan dimension – and on recipes that have been perfected with time and care – would also translate well to the burger sector. Such branding not only addresses consumers’ specific reservations about the product’s formulation; it also presents the product as inherently good, and thus inherently worthy of gracing any table.”

Of course, one thing that can have a huge impact on the burger sector is that British favourite topic — the weather. In 2009, the Met Office predicted a BBQ summer, a claim that was washed away and led to official weather forecaster ditching its long-term predictions.

As Southam of the AHDB explains: “The last three summers have been colder and wetter than average. Last summer was good while the World Cup was on, but it fell off after it ended. We almost saw a repeat of the 2006 World Cup, when we saw the best month for burger sales ever. Another factor during the summer is the promotions – where we see the retailers including BBQ products like burgers in three-for-£10 sales, or they add two packs of burgers for £5.”

But nothing tastes better than eating a burger outside – and more people are looking at developing their al fresco dining. This is borne out in the staggering figures. In the past 15 years, the BBQ market has grown significantly from a niche category worth around £150m at retail and just 9 million BBQ occasions per year, to now being worth more than £1.7bn annually and a total of 120 million barbies being held.
What is more figures from Kantar Worldpanel reveal that the BBQ sector has become the third-largest and longest grocery promotional sector worth over £7bn – if you combine meat, snacks, soft drinks and beer. And the experience shows no signs of slowing, with analysis suggesting that the market will grow to £2.3bn by 2015.

To aid this, the National BBQ Association has launched its 15th Gastro Alfresco campaign, featuring its Alfresco Experience Roadshow, which will reach 1.5 million consumers and will be supported by a full media, promotions and trade relations package worth around £2m. Let us just hope that the weather is kind in 2011.

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