The decline of the burger and fries economy?
In the U.S. fast food industry innovation comes in the form of caramelized onions on a hamburger. Meaning there isn't much. Looking at the McDonald's menu, there are 12 versions of the hamburger. Burgers and fries are the staple of many of the top American restaurant chains. But going forward chains will need to get more creative as more customers are looking to low-calorie options.
A new report from the Hudson Institute found that it makes good business sense to put an emphasis on low-calorie foods. The report analyzed the 21 largest restaurant chains in the United States -- from fast food restaurants like McDonald's and Burger King to fast-casual and sit-down restaurants like Panera and Olive Garden -- which represent nearly 50 percent of the revenue of the top 100 restaurants with $102 billion in annual sales. It found that lower calorie foods and beverages outperformed higher calorie foods and beverages at 17 of the 21 restaurants, between 2006 at 2011.
For this report, "low calorie" was defined as a sandwich or entree less than 500 calories, a beverages with less than 50 calories per eight ounces, or side dishes, appetizers, or desserts with fewer than 150 calories. Of course, low calorie doesn't necessarily mean the food is healthy but that's for another study.
In that five year stretch the report examined, the total servings of low-calorie foods and beverages increased 472 million servings. At the same time, "traditional" foods -- that didn't make the low-calorie cut -- declined by 1.3 billion servings. More specifically, as Bloomberg Businessweek reports, burger sales at McDonald's, Burger King, Sonic, and Wendy's dropped 28 percent and sales of french fries dropped 1.9 percent. So it's not surprising that restaurants that offered more low-calorie options had better sales.
"The bottom line is that it's good business to sell more lower-calorie and better-for-you products," said Hank Cardello, the lead author of the report and a former executive at Coca-Cola, General Mills, Anheuser-Busch, and Cadbury-Schweppes. "This holds true for major food and beverage companies and for restaurants."
Photo: Flickr/Mike V's Photography
Graph: Hudson Institute