Smashburger may not be a household name, but the chain's executives are hoping that will one day change. Founded in 2007, the burger chain is expanding at an impressive clip. With 197 stores at the end of 2012, its estimated systemwide sales were $174 million, including $3 million from new international locations, according to Technomic, up from $120 million and 140 stores the prior year.
Now with 200 locations in the U.S. and 10 outside the states, Smashburger plans on having a total of 250 locations by the end of the year. It expects to open 80 to 100 new stores per year in the near-term in top U.S. markets. Overseas, the chain is in Kuwait, Saudi Arabia, Costa Rica and Canada, and it's seeking to entire the U.K. with franchise development.
But Smashburger has some challenges in differentiating itself from its better-burger rivals, a growing cohort of fast-casual chains that includes Five Guys, Shake Shack and The Counter, among others. And while many rivals don't market heavily or create TV spots, Smashburger recognizes that brand awareness is an issue. To increase awareness, the Denver-based chain this month launched its biggest marketing campaign yet, including TV spots produced by Definite Productions.
Ad Age caught up with Jeremy Morgan, senior VP-marketing to talk about the campaign and what's next for Smashburger.
Ad Age: Why choose now to launch your biggest campaign?
Mr. Morgan: It's the right time for us to do it. We spent most of last year on radio -- testing it, getting good at it and getting good at media buying. The next obvious step was to do the same process with TV. ...The way the media strategy works is that it'll be local market cable and some broadcast. We're in 45 markets, and even though we have a broad breadth of stores, we're into local buying. We're launching the campaign in seven markets and will be following it up with additional markets in the third and fourth quarters, and hopefully bringing it into national through sponsorships. ...We're also one of the title sponsors for the USA Pro Cycling Challenge. It's the Tour de France of the U.S., and we've sponsored it for the last three years.
Ad Age: With so many burger places popping up and so many talking about quality and freshness, how does Smashburger intend to stand out?
Mr. Morgan: In a couple of ways. The quality and freshness and premium ingredients. But we also think we have an advantage in taste. A big portion of the ad focuses on the smashing process so people can get a sense of how great that is. The differentiation when it comes to taste and freshness is because of how we cook and prepare the burgers. The fact that we actually smash our burgers does lead to a different taste and burger. It also answers the question of our brand, why we're called Smashburger.
Ad Age: Is the smashing technique enough of a differentiator? That seems fairly common.
Mr. Morgan: Smashing is a cooking technique that exists -- it's something that local diners have been using for a long time. It hasn't been operationalized in a big format though. Quick-serve restaurants are using pre-frozen product. Ours isn't frozen. Every morning we pack them into meatballs, to smash them later. Loosely packed meat is super important, and we're hand-crafting for each order.
The other aspect that's important in the TV spot is our atmosphere, so people get a sense of what it looks like. [We also wanted] to show that the food is delivered restaurant-style. The burger is served open faced like you'd expect at casual dining, with silverware, elevating us above a quick-serve restaurant and even fast-casual. ...We're showing it on TV, not necessarily talking about it. A picture is worth a thousand words.
Ad Age: You've said you want to take the path less traveled, to push the envelope. What do you mean and how will you do that?
Mr. Morgan: Our brand is six years old. We're young and fun, and we're growing fast. We're doing a lot of things on the media front that no other brand this age has embarked on. Fast-casual is still new, and the dynamic has been that you don't need to advertise. Buying paid media was something folks weren't doing. We're really on the forefront of doing that. Last year we did a lot of broad-based radio campaigns. And TV was something we wanted to test. We don't have an enormous amount of density where we are, and it's an overinvestment in those markets, but buying awareness is the number one thing we can do to build our brand. TV just really brings everything together that we couldn't do in other ways.
Ad Age: What's next?
Mr. Morgan: What's next is for us to continue to build consumer awareness. We've found a concept that resonates with consumers, but as a young brand we are still at a 20% to 25% unawareness level within a 5-mile radius of our stores. We need to turn on the lights for consumers, so they can come and enjoy the concept. That's going to be the focus for the next several years.