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August 12, 2011

Swedish Burger Chain Max Respectfully Asks Customers to Eat Fewer Burgers

Analyst Insight by Michael Schaefer.

Burgerandfries Part of an ongoing message of environmental sustainability, burger fast food chain Max lists the carbon footprint of all of its products, going so far as to suggest consumers try something other than beef, with the goal of reducing the chain's carbon footprint.

For most fast food chains, this would appear to be little more than a creative marketing stunt, yet Max has already gone further than most in making sustainability part of the chain's core identity. What's more, by all accounts this strategy has worked remarkably well, propelling Max to number two in Sweden's fast food market, making it a rare example of a local burger chain able to compete head to head with McDonald's and remain profitable. For other chains looking to craft a message of sustainability, the key strengths of Max's strategy are comprehensiveness and honesty—the chain has made concern about the environment and health and wellness a core part of its identity, so much so that it is willing to ask customers to eat less of its signature product as means of reinforcing that message. Yet for any chain, Max exemplifies the importance of forging an identity in an increasingly crowded global fast food landscape, while also making clear the extraordinary effort necessary to actually do so.

The whole truth

Concern for the environment and healthy eating, as well as a willingness to alter their approach in order to address those concerns, is nothing new for Max—in 2002 the chain rolled out its low-fat Delifresh line, later adding gluten-free options and a “low-GI” burger designed to provoke less of a spike in blood sugar after eating. Likewise, in 2008 Max launched an initiative to reduce the company's carbon footprint, converting all outlets to wind power and compensating for all carbon emissions by the chain and its suppliers through a program of tree planting in Africa. In addition, it began listing the “carbon dioxide score” of all of its products. As noted in a recent post on the Harvard Business Review blog, the chain even gently suggests that customers try products made with something other than beef, given its high carbon footprint.

To be sure, profit motives could have played some role here—chicken, in particular, tends to carry higher margins than beef—yet the reason it has worked, the reason why Max has seen continued growth (sales in Sweden surpassed US$200 million in 2010, on growth of nearly 11%, twice that of burger fast food overall) is that the chain's credibility is long-established thanks to a decade of moving the chain in a more health-focussed, environmentally-sustainable direction. Max can ask its core customers to eat less beef without seeming disingenuous precisely because it has made the investment in understanding and responding to their concerns, with further efforts just one more step in what has become an ongoing conversation with consumers.

“Do, or do not. There is no 'try.'”

The standard disclaimer in any discussion of Max is that it is a Swedish chain—Swedish consumers have long been considered among the most environmentally-conscious in the world, with Max's approach likely to fall flat elsewhere. This, however, largely misses the point—while stories on Max rightly focus on its large-scale commitment to environmental sustainability and healthier menus, the real story of Max is about understanding the consumer. Swedish consumers are concerned about their health, concerned about the environment—in response Max has revamped its operations, top to bottom, prospering thanks to a laser-like focus on these very concerns. In the process, it has created a very distinct identity, one which has allowed it to maintain a growing, profitable niche as a hamburger chain in a market where McDonald's is highly popular.

For chains looking to appeal to environmentally-conscious consumers, Max provides an excellent case study. Their approach can work in any number of markets, particularly given the recent renaissance for the burger in places like the US. But the real lesson, the one every chain can and should take from Max's success, is the vital importance of creating a distinct identity. The chain's total commitment to environmental and health issues have created a brand which is utterly unique, with every aspect of the chain, from outlet and menu design to distribution and sourcing, reinforcing the central brand identity. Similar to fast-growing chains like Chipotle Mexican Grill, this identity was created and continues to evolve in response to real consumer concerns, ones highly specific to a particular market. Most importantly, it was emphatically not developed through half-measures or one-off marketing initiatives. In developed markets where competition is fierce and traffic set to remain anaemic for the foreseeable future a distinct identity is absolutely essential, yet it does come easily. Half-measures are worse than useless; anything that does not go towards the brand identity must be discarded.



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