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Smashburger's Recipe for Sales Growth: Beer Pairings

Friday, 26 Apr 2013 | 12:41 PM ET
Source: Smashburger

The hallmark of the modern day burger chain is consistency. Order a burger at any location, anywhere in the country and it should taste the same.

But one fast-growing chain is turning that notion upside down.

Smashburger, which currently operates more than 200 restaurants in 29 states, is building a national name for itself by adapting its menu in every market to offer regionally inspired burgers.

"We were born with this notion of localizing parts of our menu by geographic region—and even down to the city level—to celebrate what local people really want to see as interesting ways to think about burgers," said Smashburger Founder Tom Ryan.

The chain offers a "signature burger" in each of its cities or regions. For example, in Minneapolis, the "Twin Cities" burger offers two kinds of cheese and two kinds of onions. In San Diego, there is a "FreshMex" burger, which includes avocado and is served with a wedge of lime.

While local has always been a part of the Smashburger philosophy, the company decided last summer to extend that focus beyond burgers and "celebrate" the growth of local craft brewers in each market. According to the company, the decision has given its business a real boost.

"There are strong passions around the local craft brewers," said Ryan. "There is a tremendous amount of loyalty and interest."

(Read More: Mariners Hit Home Run for Beer Choice)

For Ryan, it wasn't enough just to offer an extended beer list. The chain went a step further by suggesting specific burger and beer pairings to educate customers on which brew works best with a particular Smashburger.

"There is this fabulous beer diversity now and a need to understand how to use it to maximize how beer and food work together," he said.

Smashburger has partnered with different craft brewers in different regions to create specific menus. Among the breweries it has worked with are New Belgium Brewing in Colorado, Six Point Brewery in Brooklyn and Summit Brewing in Minneapolis. In total, it has rolled out eight craft beer pairing menus, and another four are in the works.

For New Belgium Brewing CEO Kim Jordan, Smashburger's pairing concept reflects the notion that consumers are demanding more when they are dining out.

(Read More: Chew & Brew)

"There's an expectation people have that any food-and-beer experience can be elevated," she said. "If an establishment doesn't have craft beer or they have a very limited or weird selection, you wonder what (they) are thinking. It seems sort of dated and behind the times."

The burger-and-beer pairing approach has proven to be a hit in the markets where it has been implemented, with Smashburger seeing beer sales increase 30 percent to 50 percent in some markets.

But the concept is not just selling more beer, it's lifting sales across the board.

"In the markets where we have done the promotion, we have seen our top-line sales and traffic patterns grow tremendously," Ryan said, adding overall sales are up in the markets with the pairing menus "much more so than our beer sales have gone up."

While Ryan is happy to be a burger-and-beer pairing pioneer, he expects—and encourages—others to follow in Smashburger's path.

"We caught the drift of this early," he said."This is really powerful and we can take a leadership position in helping people understand not only the beauty in all this beer diversity, but its application in real life."

(Read More: Looking for a Wine That Pairs Well With Pizza?)

"I hope other people follow because I really think there is a new celebration of how to use this tremendous output of product and creativity from craft brewers," he said.

For New Belgium's Jordan, the opportunity to partner with Smashburger helps show off the brewery's diverse range of beer styles.

"(Anytime that you can lend a hand in terms of creating beer-and-food pairings and then reap the benefit by having your beers sold in a great locale where they are committed to a great beer and food experience, that's a win for us," she said.

-By CNBC's Tom Rotunno; Follow him on Twitter @TomRotunno

Questions? Comments? Email us at consumernation@cnbc.com.

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