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Buns, beef, stars and stripes
2019-02-18 
[Photo provided to China Daily]

Shanghai has just been given a dollop of New York in the form of a hamburger outfit that joins battle with others for a helping of the fast-food market

When an American fast-casual burger joint officially opened an outlet in Shanghai recently a lion dance was held in front of its store in the Xintiandi tourist hotspot. It was only 11 am when the performance ended, but by then a crowd of more than 100 had already formed a queue that snaked around the area's little alleys.

The restaurant, located in a refurbished shikumen (house with a courtyard and gates encased in stone frames), is the first outpost in China of the New York burger joint Shake Shack. Randy Garutti, the company's chief executive, says it plans to open 25 outlets in Shanghai over the next 10 years. "We always choose to go to the great cities of the world," Garutti says.

"Shanghai is such a cultural and food capital and I understand that many things start here before going to the rest of China."

Shake Shack may expand to other cities in southern China and Beijing in the future, he says.

Shake Shack's move into China is in line with its meteoric rise in recent years. It was founded as a hot dog cart in New York in 2001, part of a Public Art Fund project to drive awareness for renewal efforts of Madison Square Park. The brand has since become one of the most prominent burger chains in the United States and has more than 200 outlets worldwide.

The company reported revenue of $119.6 million in the third quarter of 2018.

[Photo provided to China Daily]

Localization is important to the company, but those who love what Shake Shack serves can expect the brand's burgers to stay true to their original taste. "We try to localize as much as we can," said Shake Shack's culinary director, Mark Rosati.

"For example, the beef we use is being ground here in Shanghai. Some of our sauces and our custard are also made locally. However, the most important thing for us is still to bring New York City as it is. As we start to open more outlets, we will then add more local touches to the menu."

Chinese customers can look forward to several offerings that are exclusive to the Shanghai outlet. Among these items are straw-bei li cheesecake, a dessert made in collaboration with Shanghai-based Al's Baking Co, and the strawberry yu (zu) garden shake, a beverage made using matcha cream cheese foam that pays homage to the city's Yu Garden.

While Rosati says he may incorporate Chinese elements into Shake Shack's offerings, these inclusions are likely to take a subtle form. One local flavor that has already excited Rosati's taste buds is black vinegar, which is typically used in Chinese cooking.

"I would never create a xiaolongbao burger," Rosati says. "That's just not what we do. But what I do love is black vinegar. There's this richness to the vinegar and I can't get enough of it. I could turn that into a sauce or make something else out of it. I can use that great flavor to create more depth in our offerings."

Acknowledging that food delivery is very much part of consumer culture in China, Garutti noted that the brand will eventually make its burgers available for delivery.

"Right now we just want to take our time and make sure we are focused on getting things right in this first location." Shake Shack's entree into the Chinese market comes on the heels of other popular US burger chains such as White Castle and The Habit Burger Grill, which set up outposts in Shanghai in 2017.

White Castle, known as the first fast food hamburger restaurant in the US, opened its first Shanghai outpost in July 2017. Jason Poon, general manager of White Castle China, says sales have grown gradually. White Castle opened its second outlet in Changning district in mid-2017, and plans are underway to open a third location in the city this year.

One of the reasons for the growth of the brand is a keen focus on localization that includes being social media savvy and delivery-friendly, Poon says.

Many chefs have been on the quest to elevate the common burger to a gastronomic spectacle.[Photo provided to China Daily]

"The importance of social media in China cannot be overstated. For example, we launched a limited-time offer item last year, the molten cheese fondue slider, which attracted a lot of attention due to images of it being shared on platforms like Douyin. The highly digitized social lives of our customers impact how we approach things.

"Another major lesson we learned here is the disruptive power of delivery platforms. Our products, and burgers in general, seem like an ideal fit for delivery. People who are pressed for time or eating alone can have our burgers delivered to them in 20 or so minutes."

The Californian burger chain The Habit Burger Grill has also enjoyed brisk business in Shanghai. Since opening its first burger joint in Nov 2017, the brand has expanded to three other locations in the city. Candice Tao, one of the branch managers, says the company aims to have 25 outlets in Shanghai by 2023, five due to be open this year.

Industry experts have offered various reasons as to why burger chains are flocking to the Chinese market. Chef-turned-food-writer Christopher St. Cavish says consumers in the city have always been enthusiastic about new offerings.

Many chefs have been on the quest to elevate the common burger to a gastronomic spectacle.[Photo provided to China Daily]

"I don't think there's a pent-up burger demand. Rather, when given the option to try something new, people in Shanghai don't turn it down."

For Will Bray, the managing director of The Greater China Restaurant Company, the boom in the burger segment can be traced back to the success that Western brands have achieved back in their home countries.

"I think one of the reasons is that hamburger culture in the West has reached peak mania over the last four to five years and has become its own category with brands from the low end to the high end. This has in turn inspired many individuals to open their own hamburger restaurants.

"In addition, several hamburger operators have seen success and growth in their home markets and have looked toward new markets for new growth opportunities. The obvious example of this is Shake Shack."

Shirley Huang, food editor of Modern Weekly, says the entry of gourmet burger chains such as Shake Shack also illustrates how consumers today are more discerning than ever.

Gourmet burger restaurants are defined as those that advertise their food as higher quality than regular fast food outlets. Shake Shack is one such company, saying its burger patties are made using a proprietary blend comprising different whole muscle cuts of Angus beef instead of trimmings.

Gourmet burger restaurants are defined as those that advertise their food as higher quality than regular fast food outlets.[Photo provided to China Daily]

Huang says that when hamburgers first arrived in Shanghai decades ago the product was considered an expensive novelty that was out of reach of the common folk. The burger later became commonplace and was something that people could easily afford. Perceptions of the burger then changed again when Chinese consumers became more health conscious.

"For a long time, hamburgers were associated with fast or even junk food because of places such as KFC and McDonalds," Huang says.

"But with the introduction of the gourmet burger in some hotels and independent high-end restaurants, perceptions are now changing, and people are realizing how delicious a good burger can be. Today's hamburger restaurants do not aim to win by quantity, but by quality."

Shake Shack is by no means the first gourmet burger joint in Shanghai. One of the first movers in this category in Shanghai was Beef and Liberty, which was founded in 2010 and is owned by The Greater China Restaurant Company. Beef and Liberty's culinary operation is headed by its group executive chef Uwe Opocensky, who used to run the Michelin-starred Mandarin Grill + Bar at the Mandarin Oriental Hotel in Hong Kong.

Such is the restaurant's renown that all the food experts China Daily spoke to named the restaurant as one of the go-to places for quality burgers in Shanghai.

Many hamburger operators have seen success and growth in their home markets and have looked toward new markets for new growth opportunities in China.[Photo provided to China Daily]

"When we first opened, hamburger culture was pretty undeveloped in Shanghai," Bray says. The reference for a hamburger for most local guests was either McDonald's or Malone's so it was a challenge to start serving a burger that cost two or three times more.

"However, we also learned that the local market is discerning when it comes to quality and specialization. Once they tried our hamburger, they recognized its value and then became repeat guests."

Standing out from the competition will not be an easy task for burger brands. According to Meituan Dianping, the leading on-demand online service provider in China, there are more than 3,200 shops selling hamburgers in Shanghai.

Many places have banked on the novelty factor to distinguish themselves. In 2017, French bakery Bread Etc unveiled a burger that replaced the typical bun with a croissant. That same year, Oh My Burger debuted its unique offerings that replaced the bread with doughnuts and even buns made of ramen and spaghetti. Despite photos of its burgers being shared widely on social media, the venue closed in early 2018 after less than a year in operation.

Most recently, chef Joey Cheung of Umaami has been on the quest to elevate the common burger to a gastronomic spectacle. But instead of novelty, Cheung's approach is solely focused on quality.

For instance, the signature Umaami burger at his restaurant in Hengfeng Road, Shanghai, features not one but two wagyu beef patties that are paired with ingredients made in-house: a sweet and savory onion bacon jam, bacon slices, pickles and an onion brioche.

He also plans to infuse a Southeast Asian twist by replacing the beef patty with a har cheong gai - chicken deep fried in pungent prawn paste - and combining it with an onion brioche, calamansi juice, melted cheddar, cilantro and a spicy and citrusy condiment called sambal belacan that is made from a secret family recipe.

For White Castle, the key to defining itself would be owning the slider category, Poon says.

For Shake Shack, it will be focusing on its mission statement to "stand for something good".

This "goodness" that Shake Shack prides itself has different fronts. The first is about paying forward to the local communities it is in. For example, it will donate 5 percent of sales from its straw-bei li cheesecake to Flying the Hope, a charity in Shanghai that helps children from underprivileged families complete their studies.

The other is related to its commitment to serving hormone- and antibiotic-free beef. In a report last year titled Chain Reaction IV: Burger Edition, Shake Shake was one of only two US burger chains surveyed that received an A grade in this area.

"We want to make sure our beef is raised the right way," Garutti says. "We think that makes a difference. We also believe that it does affect the taste. Every piece of the supply chain matters.

"We want to be a great company for the world. I think that's one of the things that people really connect with it. They want to be a part of something that has an ethos that goes beyond selling hamburgers."

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