Friday, September 16, 2011

Where's the Beef? Well, it could be in a number of places if competition is not hindered by "rent-seekers"...

This is an excellent example of how the market responds (even if slowly) to consumer demands in the fast food industry. 

Entrepreneurs with a good idea and executed with persistence can build their own niche brands and, as an unintended consequence, influence the behavior of the large chains in the restaurant buiness.

This article focuses on the "tween" burger business (not fast food and not casual dining, i.e. Chilis, TGIFridays, etc) and how their success has impacted the big boys in the fast food business.

As long as we have economic freedom and maintain conditions where competition is not limited/hindered, we will have more and better quality products available to choose from.

US burger chains beef up to keep up

""Top US fast-food restaurant companies are beefing up their hamburgers to keep up with an onslaught of competition from “better burger” chains, which have been gaining market share by offering premium meat and high-quality toppings.

McDonald’s started offering Angus beef hamburgers on fluffy buns, promising more thickness and juiciness. Rival Wendy’s now sells an eight-ounce hamburger, made from North American beef that is never frozen. And Burger King, trying to capitalise on greater health consciousness, is cooking “California” Whoppers, topped with fresh guacamole and ripe tomatoes.

Competition from better burger chains, which account for only about 3 per cent of the market, is good for the industry, according to Sara Senatore, restaurant analyst at Bernstein Research, because it gives consumers a new option priced between fast-food and casual dining. The focus on quality meats and toppings has forced industry leaders to sell healthier food.

“I think, given the demand environment, offering a premium-priced burger could make you raise your eyebrows a little bit, but it shows a continuing trend toward improved food quality,” Ms Senatore said. “All of the chains have ratcheted up the quality.”...
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