Shake Shack – Please, give us the burger of the future.

Student comments on Shake Shack – Please, give us the burger of the future.

1. November 4, 2016 eahern says:

   Fascinating research on the impact that farming cattle for beef consumption has on the environment. When most people think of climate change, they turn to cars or manufacturing plants as the biggest polluters. However, as you indicate, 14.5% of worldwide greenhouse gases are due to livestock, compared to the fact that airlines contribute 2% to greenhouse gases, this statistic is staggering!

   Veganism is on the rise amongst millenials due in part to health but also due to the fact that millenials are more environmentally conscious. https://www.theguardian.com/lifeandstyle/2016/may/27/the-rise-of-vegan-teenagers-more-people-are-into-it-because-of-instagram

   This could become a key competitive advantage for Shake Shack moving forward so they are not left behind if eating trends change in the future.
2. November 5, 2016 Roanna says:

   I could not agree more with this article. Beef consumption is a huge driver of global warming. Fun fact, cow flatulence contributes to about 20% of human-related methane in our environment (http://scienceline.ucsb.edu/getkey.php?key=2569). While it is going to be hard to change consumer preferences away from consuming meat, there are many things Shake Shack could do to encourage this behavior (many of which you’ve outlined in your blog post). In my opinion, meat in this country is too cheap, and does not fully capture the negative externalities it creates. While it would be highly controversial for Shake Shack to do so, I believe they should raise the prices on their meat options, in order to encourage more consumption of their vegetarian options. Additionally, you mentioned creating more vegetarian options, which I definitely agree with. If more restaurants would invest in creating delicious vegetarian options, perhaps more people would be inclined to consume less meat.
3. November 5, 2016 FF says:

   Jordan – thank you for this compelling post and bringing to light the need for hip burger restaurants to initiate the change against using beef! I couldn’t agree more with everything you outlined, from the mission that should drive Shake Shack and the suggestions you recommend. I really liked how you suggested Impossible Foods as a potential partner — it launched in NYC this summer through Chef David Chang’s Nishi and culinary feedback raved about the burger: “Renfro, a longtime vegetarian, called the meatless burger a “dream come true” and raved about the patty’s beefy texture and aroma. She said it was the most realistic meat alternative she’s eaten.” (1) In addition to partnering with them, Shake Shack should certainly increase prices on its burgers, particularly when the burger served by Impossible Foods is at $12, a much higher price point than a burger at Shake Shack. While I do think this is a great cause, I am not sure how attractive it will be do Shake Shack management as it may impact profitability. What Shake Shack should also consider doing is to partner with other hip and trendy burger joints so together they can ensure that one company’s effort won’t lead to increased consumption at competitors. They could reach out to Umami Burger, Burger & Barrel and Park Soho. Together, these burger joints could lead the change to less beef consumption!

   (1) Robinson, Melia. “The plant-based burger that tastes like real meat is coming to the West Coast,” Business Insider, http://www.businessinsider.com/impossible-foods-coming-to-california-2016-10, accessed November 2016.
4. November 5, 2016 AGlasner1 says:

   This is SUCH an interesting article. There are now people looking into producing meat in labs. I find all of this a bit strange, if I’m honest. I like meat and I know many people who would stop going to a place if they changed to being more vegetarian and, whatever the sustainability of meat, the emotional link to the farm is one that predates the formation of cities.
5. November 5, 2016 jruivo says:

   We cannot deny the impact that agriculture, and livestock in particular, has on climate change.
   However, I do not agree that Shake Shack is leading the way in “writing the next great chapter of the hamburger”, not do I think it would have the ability to influence how the industry functions as a whole. In my opinion, non-beef menus have the objective of targeting a different customer segment that was not previously able to enjoy Shake Shack, sourcing regionally is related to the trend seen in the quick service restaurants sector in which customers are looking for more authentic products, and the “Good n’ Green” initiatives sound like a Social Corporate Responsibility line without real impact.
   There is a need to educate the consumer, but especially a need to ensure it can find affordable, green alternatives. Only when those alternatives are available will we be able to see changes in the majority of the consumers’ behaviors.
6. November 6, 2016 Evan Kornbluh says:

   Great post on a highly under-reported but critically important contributor to climate change! I agree with your assessment that Shake Shack’s brand puts it in a unique position, relative to other burger chains, to be forward-thinking and innovative in offering more climate-friendly products. Another route that they could consider going, besides plant-based protein, is lab-cultured meat. A number of small start-ups, such as Memphis Meats (http://www.memphismeats.com/), are developing processes to create actual beef cells in the lab that could give us real hamburger without the cow flatulence.

   My biggest concern with these strategies (and, likely, Shake Shacks’) is customer willingness to pay. Most approaches to filling Shake Shack’s menu more sustainably (with the exception of switching to chicken) would likely cost the company more and therefore result in higher menu prices. Most of the research that I have seen on consumer behavior suggests that while many consumers say in the abstract that they would be willing to pay more for environmentally friendly goods, in practice they will only accept very small premiums on the prices they pay for “green” products. For example, here is a McKinsey study that looked at consumer willingness to pay to go green (http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/how-much-will-consumers-pay-to-go-green). I thus wonder how much of a price increase Shake Shack’s margins could assume, and also what the role of consumer education should be to help shift consumer behavior, both at the burger counter and more broadly.
7. November 6, 2016 JL says:

   As many have echoed- fantastic post that sheds light on a huge issue facing us today. It is quite surprising how much livestock contributes to climate change, yet it is truly one of the least talked about industries. It is my belief that this is because meat-eating is so entrenched in the majority of our societies, countries, and cultures. As such, being a burger restaurant, I think it will be impossible for them to remain competitive with an increased focused on just plant based protein or non-beef menu items. It’s a fundamentally different business model. To that point, I really like Evan’s suggestions above to look at lab-based meats. I think this would be very innovative, would not comprise their business model, and could signal to the industry at larger that a fairly big player like Shake Shack can sustain themselves and their business through completely new sourcing practices.
8. November 6, 2016 MH says:

   Great post, Jordan. I identify with this sentiment as I was actually raised as a vegetarian by my mother, and actually wrote a high school research paper on vegetarianism. My mother is still a vegetarian to this day.

   From my experience, traditional vegetarian burgers (“veggie burgers”) taste nothing like meat. And for most Thanksgivings, we would eat tofurky http://www.tofurky.com/ — not exactly a turkey. I have also read about Impossible Foods and think it is great. As someone who loves meat now, despite not supporting cruelty to animals, I would certainly be a buyer of the Impossible Burger.
   1. November 7, 2016 Michelle Henry says:

      This tofurky sounds wonderful. I’m going to have to order one for an HBS friendsgiving event
9. November 6, 2016 OO says:

   Great article! I completely agree with you regarding the need to introduce meat substitutes in the fast food industry. However, Shake Shack is probably concern about consumers’ perception of lab developed meat. Consumers, like myself, would need to be educated as to any potential side effects of a lab grown burger. Perhaps a more feasible plan would be to introduce a vegetarian based burger and slowly move the consumer based to a more novel product.
10. November 6, 2016 HR says:

    Really interesting post, Jordan! As someone who loves meat but is well aware of the environmental impact, I would love to see a more sustainable solution more widely available. A number of years ago, my folks made a commitment to only buy sustainably farmed grass fed meat, but needless to say it still has an environmental impact (and it is expensive enough that it has required us to substantially cut down on our consumption.) I wonder, though, what the right path to expansion for this kind of product is. I take your point quite well that the behemoths like McDonald’s aren’t likely to be leaders in this space, but is Shake Shack the right alternative? Might high-end restaurants (with higher prices and margins) be a better way to change tastes here? Would higher end restaurants do enough volume to put a dent in the demand? I wonder if there are parallels that we could look at historically to see how tastes have evolved over time (i.e. whether tastes tend to evolve in more of a top down or bottom up fashion.)
11. November 6, 2016 HBS2018 says:

    Great Post! Love this issue as I feel like others said above that it is not discussed as widely as other sources of climate change. However, I am concerned with how much change Shake Shack can bring into the fast food industry into the future. With only 100 restaurants open as of August 2016 and second quarter growth for stores being 4.5% when last year’s was 12.9% (http://www.marketwatch.com/story/shake-shacks-growth-plan-gets-mixed-response-from-analysts-2016-08-11), how much change can they initiate in the marketplace? Shake Shack would need to work with other smaller burger joints to enact change, but even then, can this impose a change in practices to influence the big players like MacDonald’s or Burger King that are nationwide? I hope so! I look forward to seeing their progress!
12. November 6, 2016 Pumchanut says:

    Fascinating blog! I couldn’t agree more with the choice of company and your suggestion on how and why Shake Shack should take the lead in being part of the global warming combat. However, there are two key things that I wonder. Firstly, from the Shake Shack perspective and wondering if this will have a negative impact on their revenue. I can’t help but wonder if people would switch restaurant to find wider variety of meat menus. Secondly, I wonder how much reduction of beef menu would help. Where I’m coming from is whether beef eater will just continue to select the limited beef menu making the positive impact negligible.

    That being said, I think it’s a great idea and doing something is still better than not doing anything to help the world at all!
13. November 7, 2016 JB says:

    Jordan, thanks for the interesting read! I think 90% of people are completely unaware of the impact of livestock on greenhouse gas emissions (14.5% is shocking). I read over Shake Shack’s “Good n Green” initiatives, and I think they very intentionally neglect to mention the impact of red meat on their menu. Red meat is absolutely fundamental to Shake Shack’s business, and though some consumers may gladly switch to a meatless alternative, I think they would be in the minority. Shake Shack should certainly cast a wider net and capture more consumers by providing more poultry and meatless options, but their core competency (and competitive advantage) will always be in beef.
14. November 7, 2016 Sam Long says:

    This is an interesting post on some of the lesser known consequences of beef production. I wonder what the difference (in terms of CO2 output and other harmful environmental effects) is between cattle and other protein forms when you factor in fertilizer, diesel fuel required to power the tractors that till fields and dig irrigation ditches, etc. Also, have you examined the different variants of insect protein? I know that cricket protein is becoming more popular among some fitness enthusiasts. A friend of mine co-founded this startup that sells cricket protein and advertises its environmental benefits on his website. (https://lithicnutrition.com/crickets-101/)
15. November 7, 2016 MS says:

    Amazing post. I agree. Shake Shack should do it, they have the most visibility in the industry and can thus lead the change.
16. November 7, 2016 Piriya Thepkanjana says:

    Very interesting article! I agree that given Shake Shack’s strong millennials customer base, the restaurant chain has potential to reshape the burger industry and become more environmentally conscious.

    My concern with Shake Shack collaborating with companies that produce plant-based proteins is that Shake Shack may need to completely reposition its brand image which it has spent years creating. Will phasing out beef burgers and promoting non-beef burger take away the trendiness of the brand and turn Shack Shack into a health-conscious restaurant chain like Protein Bar?

    In addition, I wonder how Shake Shack customers will respond to non-beef burgers. It would be great if Shake Shack conducts a survey to see whether introducing additional non-beef burger is a good investment. In addition, it can try launching a pilot program at one of the locations to gauge how customers respond to the new non-beef offering.
17. November 7, 2016 Nico Berardi says:

    Loved the post. The future is food will certainly determine how many aspects of our lives shape out. While I agree completely with you post, I keep going back to the tyranny of the short-term that public companies face. This transition, while very much worth pursuing, would bring growing and transitional pains. I wonder whether a public company could really bet on the long term while, perhaps, missing their quarterly results.
18. November 7, 2016 Alex Simon says:

    Jordan, I never thought Shake Shack could be beseeched to alter their menu items in such a passionate manner! I wonder, however, if Shake Shack is the appropriate company to bring the plant-based burger to the masses. Food production and marketing today, even at the level of the fast food industry, appears heavily influenced by the organic, single-origin, traceable nature of the ingredients, including beef. For this reason, a plant-based burger appears at odds with the ‘natural’ approach currently in fashion. Although the beef-less burger would be far more sustainable, it could be considered more of a ‘Franken-food’ by potential consumers. One possibility I find for introducing such an option would be running promotions in which the real burger and plant burger were directly compared in a taste-test (similar to Pepsi vs. Coke). If consumers realized for themselves that they preferred Shake Shack’s plant-based burger, this would approbate the company’s ambition to combat climate change by reducing the number of cattle used.