A look through U.S. Patent and Trademark Office records revealed an interesting detail that slipped through the cracks early last month. Chipotle Mexican Grill Inc., which runs the popular Mexican-inspired fast-food chain, has been mulling a new concept. The company filed an application to trademark the name “Better Burger,” a sign that Five Guys, Shake Shack, and the rest of the upper echelon of fast-food burger chains may soon have a new competitor.
“it’s a growth seed idea we are exploring,” company spokesman Chris Arnold told Bloomberg on Wednesday. Media outlets, rushing to cover the discovery, pondered how soon it will be before we see the first branch. Some even wondered if McDonald’s, already had reason to worry.
But it also raised an important question as to why is Chipotle directing its attention to the hamburger scene, one of the most saturated in the American food industry.
On the surface, the move is a bit perplexing. The market for burger chains is almost four times the size of the market for Mexican fare, according to data from market research firm Technomic. There’s a lot more money being spent on ground beef patties, but there isn’t much wiggle room for growth. McDonald’s, which has struggled to woo customers in recent years, can attest.
But zoom into the market for fancier burger chains, and a different story emerges.
“Once you look more deeply, you realize that it actually makes a lot of sense,” said Darren Tristano, who is the president of Technomic. Tristano points out that the fast-casual burger category, which includes the likes of Shake Shack, is growing quickly. What’s more, it still represents a small portion of the overall burger market.
“The fast-casual burger category grew at nearly 16 percent last year,” he said. “If you looked at the overall burger market, you would see that fast casual only represents 5 to 7 percent of it.”
In that light, the news makes a bit more sense. Chipotle isn’t thinking about the McDonald’s core customer; it’s dreaming of all the hamburger lovers out there who rarely, if ever, eat Big Macs.
Of course, in order to be successful, “Better Burger,” if it ever comes to be, will have to distinguish itself from a field of suitable competitors. How it will do that remains unclear — we don’t, after all, know much about Chipotle’s plans, other than what can be extrapolated from its current business model and gleaned from the name it recently filed a trademark for.