Distinguishing itself from the pack
Burgerville had been a Northwest institution since its founding in 1961. But by the early 1990s, the chain had lost its sizzle. Guest counts were flat; the menu was stale. Heavyweight rivals such as McDonald's (NYSE:MCD) and Burger King (NYSE:BKC) were stripping away customers. CEO Tom Mears ultimately figured that a family-owned chain of 39 quick-service restaurants, based in Vancouver, Washington, would never beat the big chains on price--so he put the focus on quality. It was a risky move for a burger joint. Nonetheless, Burgerville's emphasis on fresh, local food appealed to diners' hometown pride and tapped a nascent consumer hunger for more healthful, less processed food. Since then, Burgerville has launched several products built around key local ingredients. The most popular is probably the Tillamook Cheeseburger, shown here, which is made up almost entirely of sustainable, locally grown ingredients--and costs a mere $3.29.
The heart of every burger is the patty, of course--but where does it come from? Since 2003, Burgerville has sourced more than 30,000 pounds of ground beef a week from Country Natural Beef, a co-op of family ranches based in Antelope, Oregon. By buying local, Burgerville eliminates freezing, cuts trucking costs, and supports rural communities. Better still, the cattle are raised without antibiotics or hormones on land otherwise unsuitable for agriculture. Says Mears, "Our customers can taste the difference." Another benefit: During the mad-cow scare of Christmas 2003, Mears knew his beef was safe.
The Secret Sauce
By the mid-2000s, Burgerville had made a name for itself as, oxymoronically, a sustainable fast-food chain. When doubts about trans fats began to show up in headlines, the company asked the longtime supplier of its secret sauce (among fast foodies, this is known as spread), Ventura Foods, to cook up a trans fat-free substitute. The chain switched spreads in January 2006--few customers noticed any change in flavor. At the same time, it partnered with a local biodiesel outfit to recycle its waste fryer oil. Now Burgerville supplies approximately 6,400 gallons of biodiesel a month to local gas pumps instead of barging its grease across the Pacific for use in the cosmetics industry.
Don't look for a windmill atop your nearest Burgerville. Nonetheless, the electricity used in the restaurants is generated by wind power, thanks to a special program from local utility Portland General Electric. (Some windmills actually are located on the ranches that supply Burgerville's beef.) The wind power adds about 10 percent to the chain's electric bill. Figuring out how to promote it proved tricky. "We didn't want to come off as preachy," Mears says. In the end, the company adopted a low-key approach, touting wind power in in-store displays.
It's baked by longtime supplier Franz Bakery, a nearby family-owned bakery. Sourcing locally eliminates need for preservatives and transportation.
Sharp and crumbly, Tillamook cheese holds a special place in the hearts of Northwest foodies, but Burgerville's decision to employ it as a signature ingredient was risky. Critics predicted the taste would overwhelm diners accustomed to blander American cheese. Not only do customers like the taste, however, they like the fact that Tillamook contains no hormones or antibiotics and that it is produced by a 98-year-old co-op of small dairy farmers who employ streamside fencing to protect wild salmon habitat.
The cucumbers are grown in western Washington's Skagit Valley and brined with natural spices "the old-fashioned way," says pickler Jocelyn Staffanson of Pleasant Valley Farms.
Served with love
In the early 1970s, when Mears was a restaurant manager, his appendix ruptured and he spent two weeks recuperating. As CEO, he wanted to provide decent health insurance for his employees without imposing ruinous overhead. Since 2006, the chain has offered coverage for just $15 a month to employees who work at least 20 hours a week and have been with the company for at least six months. The cost: $3 million a year. But the gamble has paid off. The lure of health care has reduced employee turnover from 150 percent to 50 percent, substantially reducing training costs and boosting morale. Last year, guest counts rose 4 percent and gross sales climbed 11 percent, to $67 million. "It was our best year ever," says Mears.