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Denver’s Smashburger aims to raise stature in “better burger” segment

By  Steve Raabe The Denver Post

Posted:   02/04/2014 06:52:56 PM MST
New Smashburger CEO Scott Crane on Tuesday displays some of the food available at Smashburger’s first location, 1120 S. Colorado Blvd. in Glendale.

Running one of the nation’s fastest-growing hamburger chains may seem like  easy money. Open outlets, sell burgers, rake in cash.

But for Smashburger’s new CEO, Scott Crane, how do you top seven  consecutive years of double-digit growth?

By making sure that it becomes eight consecutive years, then going from  there. Crane’s plan is to stick to the template that has made Denver-based  Smashburger one of the nation’s fastest-growing players in the  restaurant segment defined as fast-casual, better-burger.

Category leader Five Guys Burgers and Fries has about five times as many  outlets as Smashburger’s 256, but Virginia-based Five Guys has been in business  21 years longer.

Crane, 40, took the reins in November after the departure of CEO David  Prokupek. Crane, however, is no newcomer. He has served as Smashburger’s  president since the company opened its first location on South Colorado  Boulevard at Mississippi Avenue in 2007.

Crane projects that Smashburger this year will open about 75 new units  nationwide and in a few foreign markets. Sales will grow to an estimated $300  million compared with $228 million in 2013.

Restaurant analysts wonder whether America’s appetite for upscale hamburgers  is limitless.

“Is the better-burger space too crowded?” asks John Gordon of San Diego-based  Pacific Management Consulting Group. “Many believe that there are way too many  chains, and only a limited number are going to make it.”

Few are betting against Smashburger.

The chain recently was ranked by Forbes magazine as one of the top 10 “Most  Promising Companies,” and Crane was named one of the “10 Executives to Watch” by  Nation’s Restaurant News.

Crane said customers will find a smattering of menu changes this year,  including more gluten-free products. The company is testing concepts such as  organic milk and juice, low-sodium bacon and preservative-free salad  dressings.

Smashburger’s growth is viewed as impressive in some metrics but tiny in  others.

Restaurant-analysis firm Technomic reports that among all limited-service  hamburger chains, Smashburger’s market share is 0.2 percent. By comparison, Five  Guys has a 1.4 percent share. Mega-chains McDonald’s, Wendy’s and Burger King  collectively command 71 percent of the market.

Steve Raabe: 303-954-1948, sraabe@denverpost.com or  twitter.com/steveraabedp

256

Number of Smashburger outlets

$228 million

Company’s sales in 2013

0.2%

Company’s share of market in 2013