Veggie Burgers Swerve into the Mainstream

They began life as a Left Coast creation—an eccentric, heath food knock-off of an American classic. For years they were maligned as earthy, cheap imitations of the real thing. Yet they’ve survived the road less traveled, and now it appears veggie burgers are about to hit the on-ramp to mainstream popularity.

The fast lanes of the interstate highway of food distribution consist of the major fast-food chains. But request a vegetarian sandwich at one, which I recently tried as an experiment, and you’ll likely get a fully equipped burger, sans the burger. Not very satisfying. And depending on the sauce, it still doesn’t qualify as a vegan sandwich. With a growing number of veggie-only consumers, especially among teens, one veto from a family member or friend can reroute an entire restaurant decision. “There’s nothing on the menu for me” is a growing problem for fast-food chains.

Recognizing this problem, Miami-based Burger King Corp., a unit of Diageo PLC, announced plans last month to introduce a vegan-friendly veggie burger created without any animal-based products or soy, to address possible allergies. The introduction of the yet-unnamed burger is part of the company’s ambitious menu overhaul that also includes a Chicken Whopper, better-tasting coffee, new milkshake formulations, and a version of arch-rival McDonald’s Big Mac. The veggie burger comes on a special whole-grain bun, but customers can special order white bread and alternative sauces.

It’s not so much the vegetarian consumer that Burger King is after, it’s the veto power they may have over a minivan full of hungry, burger-eating family members. The veggie burger gives them something that is designed to meet their taste and ingredient preferences, the company says.

That’s for now. The number of Americans who rarely or never eat meat is rising, according to the Vegetarian Resource Group, a Baltimore, Md., research organization. A poll it conducted last year with the Zogby organization found that approximately 2.5% of the U.S. population can be considered vegetarian. Factoring out young children, this translates into roughly 4.8 million consumers. This does not include people who occasionally or rarely eat meat or animal products.

In fact, the same poll indicated that 57% of the adult population sometimes, often, or always orders a vegetarian item when eating out. Five out of 100 restaurant patrons “always order a dish without meat, fish, or fowl,” VRG reports.

This equates to a growing consumer demographic that represents considerable long-term revenue potential. Burger King recognizes this, and they’re not alone. Americans spent $112 billion on fast food in 2000, according to industry sources, and McDonald’s reported monthly sales of $53 million for its Happy Meals alone. Meanwhile, the natural foods market, which includes retail stores such as Whole Foods and health food manufacturers, has seen sales surge to more than $20 billion. Merge these two categories, and it’s clear that the time is right for good-tasting, natural food products in the fast-food marketing channel. And the major chains will either address the demand, or face competitors who will attempt to outflank them.

One emerging competitor is O’Naturals. It’s not strictly vegetarian, but represents a new generation of fast-food thinking. It was founded in 2000 by yogurt entrepreneur Gary Hirshberg, president and CEO of Stoneyfield Farm, Londonderry, N.H., and has recently opened stores in several upscale northern New England communities. “I don’t think anyone has tried to put together something that is family-friendly, tasty, natural, and organic fast food,” O’Naturals co-founder Mac McCabe told Inc. magazine late last year. He was referring to early efforts by companies such as D’Lites, a defunct chain that stressed low-fat, reduced-calorie foods back in the 1980s. It folded because it disregarded one of the cardinal rules of fast food—it’s got to taste great.

Even as O’Naturals is fine tuning its stores in New England, another competitor has launched in Florida. Health Express USA, Ft. Lauderdale, Fla., bills itself as “the country’s first fast-food restaurant franchise to feature gourmet health food.” Its Healthy Bites Grill is located in both its headquarters town and Boca Raton, Fla. With the launch of the second store, Health Express USA plans to aggressively roll out a national franchising effort. “The Healthly Bites Grill concept is designed to take advantage of two major consumer trends: the continuing growth of fast food sales, coupled with Americans’ fast growing interest in nutrition and good health,” stated Doug Baker, company CEO.

Clearly the veggie burger is a metaphor for this changing landscape, and the road ahead looks bright.

by PIERCE HOLLINGSWORTH
Contributing Editor
President, The Hollingsworth Group, Inc.
Wheaton, Ill.