I call on you, glorious Shake Shack, with your delicious crispy fries, instagram-able burgers, and divine custard desserts, to lead fast-food into the future. The burger needs a makeover, and we need to get rid of the meat. The UN Food and Agriculture Organization reveals that 14.5% of worldwide greenhouse gas emissions are a result of livestock, and beef and dairy production account for 65% of livestock emissions – that is a total of 9.4%1. Producing just one beef patty releases 4.35kg of CO2 into the environment2. Its carbon footprint, as illustrated in Exhibit 1 below, is 10x that of chicken.
Shake Shack, you are poised to lead change in the industry
Why Shake Shack? At first glance, it may seem like they are ill equipped to lead change in this space; however, their size, brand, and mission suggest otherwise:
- Shake Shack is relatively nimble. They are a smaller player in the burger restaurant industry, with 2015 revenue of $295M4 – about 1.2% of McDonald’s revenue of $25.41B5. Their supply chain is less entrenched than a behemoth like McDonalds and they have greater flexibility. Additionally, since they are still rapidly expanding, they can test new non-beef products and build out infrastructure that’s not as dependent on beef.
- Their brand is hip, innovative, and influential. Searching the hashtag #shakeshack yields over 500K+ posts on Instagram6. Shake Shack has built a cult following amongst influential millennials and they are in a position to start a trend that can go viral. The burger is a cultural staple of the western diet, so there needs to be a cultural shift in order for its popularity to decrease.
- Their mission is “Stand for Something Good”. A screenshot from Shake Shack’s website below describes the company’s love for the planet. Developing a non-meat burger would perfectly align with this mission.
Shake Shack has started to adapt but should do much more
While Shake Shack does not publicly acknowledge the impact that beef production has on the environment, they have done a few things that show they are thinking ahead:
- Introducing new non-beef menu items. In January 2016, Shake Shack added the Chick’n Shack to their menu. According to Shake Shack Culinary Director Mark Rosati, the Chick’n Shack burger provides “a simple, pleasurable, uncomplicated experience, but with high-quality, responsibly sourced ingredients. 8”
- They claim to source regionally. Shake Shack’s VP of Supply Chain said in an interview that “Shake Shack keeps the menu small so that the company’s sourcing team can be engaged with artisanal and local suppliers.”9 Yet, it is unclear how diligent they are with their supplier criteria as they do not have publicized guidelines.
- Established Good n’ Green climate change initiatives. On their website, under “Good n Green”, they list 8 different initiatives, ranging from recycling to oil management, but they don’t mention anything related to the impact of red meat on their menu.10
Given Shake Shack’s position as a mission-driven and fast-growing brand, and their commitment to ‘Standing for Something Good’, Shake Shack should lead the charge on developing a non-beef burger.
- Plant based protein is just taking off. While Shake Shack already offers a Portobello mushroom burger, that just doesn’t cut it for most carnivores. Several companies are working to develop plant-based proteins that look, smell, and taste much more like meat. Impossible Foods could be a great partner for them – and producing their burger “requires a quarter of the water used to produce the same burger from a cow, 1/20th of the land and 1/8th of the greenhouse gas emissions.” 11
- Chance to establish the future of fast food. Shake Shack can design and create a sustainable, delicious, and addicting all-American meal that’s not a beef burger and fries. This could be a major competitive advantage.
- Mitigating risk resulting from beef regulations. Not only is commitment to reducing of beef production aligned with Shake Shack’s mission and a substantial business opportunity, but it is also mitigating the risk of future beef regulations. If beef production was to become regulated and the price of beef rose, their business model is put in jeopardy as it stands.
In Shake Shack’s annual report, they include their company values, including “We always find the “yes” and write the next great chapter in real time”.12 Shake Shake, I urge you to write the next great chapter of the hamburger.
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