Organic supply concern for growing US burger chain

Jon Condon, 23/09/2011

The premium burger segment is one of the strong growth areas in the North American food service industry, and one of the emerging successful players in the market segment is Elevation Burger.

The company uses Certified Organic ground beef patties, exclusively, as one of its key points of difference.

Elevation Burger director Hans Hess told Beef Central that the company sat in what was known in the US as the ‘better burger’ segment, which was a step above the conventional fast-food options like Burger King, Wendy’s or McDonalds.

Up until relatively recently, burgers were typically a fairly low-quality product, but that had started to change with the arrival of chains like Fuddruckers’s that started offering ‘something better, and different.’ That trend had continued to gain momentum.    

“It’s not like an ultra-gourmet positioning, but it is a clearly defined notch above the everyday US burger outlets,” Mr Hess said.

Typical menu price for a double hamburger (6.5 ounces or 195g of pattie) in a meal offer with fries and a drink was about A$10-$11.

“The big distinction between our offer and others is that it is 100 percent grassfed beef, and the beef component is exclusively Certified Organic,” he said.

While some other menu items including cookies and drinks were Organic in origin, most other ingredients were conventional – but it was in the Organic ground beef where the company put much of its marketing effort.           

One of the potential handbrakes on Elevation Burger’s growth plans, however, could be sourcing enough Certified Organic beef trim to keep up with demand.

The company’s first store opened six years ago, and while domestic US Certified Organic ground beef was used for the first two years, supply from Simone Tully’s Australian Organic Meats Group (see separate story “Pent-up global demand for organics, says been program manager”) was added four years ago as the business started to grow.

Unlike some other burger chains, Elevation Burger is exclusively beef-based, with no other meat protein like chicken on the menu.

Currently the Elevation Burger franchise includes 25 outlets, but the business is on track to double in size to 50 stores next year. Longer term, there are 200 stores under development through franchise commitments and developers already in place.

That would put ‘enormous strain’ on maintaining Certified Organic ground beef supply, without expansion in production out of key countries like Australia, Mr Hess said.

“We would encourage as many Australian beef producers as possible to consider conversion to Certified Organic,” he said.

“We think it is not inconceivable that Elevation Burger could be 800 to 1000 outlets in the US alone, which might sound large by Australian standards, but would rank it only as a mid-scale player in this market. There’s a popular ‘better burger’ chain that started about seven years ahead of us that now represents about 3000 units.”

Mr Hess said it had been “hard, from day one” for the company to source Organic trim out of domestic US suppliers.

“That’s why we turned to Australian supply in the first place. But apart from supply, the real problem with US-produced Organic beef is in its flavour profile,” he said.

“A lot of the Organic beef produced here now comes off inferior rangeland, and people say it tastes intensely gamey, like deer meat. We get none of that problem with grassfed Organic supply from Australia or New Zealand.”

Mr Hess said much of the premium grazing land in the US was now used for other purposes like corn production, and the quality of the forage on what was left appeared to be influencing flavour profiles in locally-produced grassfed and Organic product.

He agreed that the positive flavour profile might become an important point of difference for Certified Organic beef exported out of Australia.

Currency levels, of course had made Australian beef more expensive in the US this year, be he was relieved to hear of signs of easing in currency levels this week.


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