H3: “new hamburgology” + “not so fast food”
Nothing new under the “fast food sun”? Look twice at H3 Hamburguer Gourmet. Innovative thinking can help us understand how they placed their brand and how they are successfully competing in an existing market by creating a new type of offering.
According to brand color specialists, blue and black colors suppress appetites. Reds and oranges encourage diners to eat quickly and leave. Red also makes food more appealing and influences people to eat more (it is no coincidence that fast food restaurants almost always use these colors). Blue is the most calming of the primary colors, followed closely by a lighter red. But what is true about blue is that it increases retention.Take a minute to visit the H3 website. What would you say about the company’s brand image? What about using the color blue to stand for food?
Founded in 2007, H3 is one of the fastest growing companies in Portugal, as discussed in this Bloomberg video. Expanding now to Brazil and Spain, they’ve been able to multiply their revenues by 10 in a five-year period. Let’s see what is different regarding their value proposition.
Positioning: Opening a new hole within an existing space
One critical point of competing in an existing market is the business positioning. H3 has positioned itself between fast food burger companies and traditional restaurants that offer burgers, opening a new space to play. The company’s concepts like “new hamburgology” or “not so fast food” played a critical role by removing the weaknesses and emphasizing the strengths of other brands in the market. Let’s see this in detail by first looking at the competition: fast food burger companies and traditional restaurants. This will then help us understand how H3 positions itself.
Fast Food Burger Companies
How can you innovate/differentiate in an established business like fast food burgers? What are the brands that come to our mind when we think about fast food? McDonald’s and Burger King to name but two. These are large global brands.
What are the weaknesses of these brands?
- Association of fast food not being healthy
- Lack of variety
- The need for fast food reminds people of the “stress” that is driving them to eat fast
- Fast food chains face huge competition
- Not cooked in front of customers’ eyes
What are the strengths?
- Food is served quickly
- Standardized offerings—customers know what they are getting
- Efficient standardized procedures
- A focus on staff training
- Strong, global brand image
- Huge capital reserves
- Affordable prices
What are the weaknesses of traditional restaurants that serve burgers?
- Brand management
- Lack of specialization in burgers
- Time to serve
- Food not cooked in front of the customer
- Higher prices
- Lack of scale
- Regional locations
What are the strengths?
- Healthy food proposition
- Place to seat
- Dish, knife and fork meal
- Food variety (they don’t have only burgers)
- Eating as a social event
H3 Hamburguer Gourmet
H3 position itself not only by overcoming the weaknesses of fast food burger companies and traditional restaurants, but also by creating new strengths that were nonexistent in the market before.
What are H3’s strengths?
Standardization and variety (varietyzation)—The burger is standard (well done or medium) with different side ingredients (salad, rice and chips) and sauces. It’s served in hot dishes. The burger is the core. All the other toppings can change according to local preferences.
Scientific message—By creating the “new hamburgology” concept, H3 tries to revive something given as static: the burger. At the same time, it raises the execution of hamburgers to the level of science, positioning H3 as the great promoter of this new trend. Here is how H3 expands on the concept: “A new doctrine which defends that hamburgers don’t have to be thin, frozen, tasteless or be served between two slices of bread. Originated in Europe, it was developed in 2007 by H3. Scholars believe that this approach will soon become global.”
“Not so fast food”—The “not so fast food” concept removes the negative connotation of fast food with regard to quality and emphasizes at the same time one of the major strengths: the time to serve. As H3 describes it: “Developed in the early 21st century, this Mass Production system comes in opposition to the traditional Fast Food method. What this new system has in common with the previous one is its capacity to serve food at a low cost in a short period of time; yet it distinguishes itself by presenting food of excellent taste instead of the usual uninteresting one.”
Healthy proposition—H3 advertises that its burgers are 100 percent beef, with sea salt, which is perceived as more healthy. The option of homemade potato chips, rice or salad for a side also offers a healthier alternative to the traditional side of fries.
High quality, gourmet food—Each burger is grilled in the point of sale and everything is done in front of the customer’s eyes, which not only contributes to an association of fresh food, but also builds trust. By serving food in hot dishes, they remove the “plastic food” feel that’s sometimes associated with fast food chains. Additionally, H3 established a differentiating factor by associating the brand with famous chefs. Naming the company “Hamburguer Gourmet” conveys that a hamburger is not only a piece of frozen meat; it can also have something of French cuisine in it. (Read more about the gourmet aspect in “H3: Where the Ultimate Mouthwatering Hamburgers Are in Portugal.”)
Price reflecting the value—H3’s burgers are priced 20 percent higher than fast food burger chains but lower than traditional restaurants.
A focus on service—The time to being served is 7 minutes, which is not at the level of fast food chains, but it’s better than traditional restaurants. Operations are standardized in order to promote a continuous flow of customers over the delivery process. Staff members always have a smile for customers.
Eating as a social act—Eating is becoming more and more a social act. People often use the lunch time to relax and interact with each other in order to relieve the stress acquired during work.
Humor—Another differentiating factor for H3 is the humor they use in their materials. For example, consider one of their signs claiming “One day we’ll be the biggest burger chain in the world.”
Clean, welcoming design—Besides blue, white is the dominant color over the store which conveys a fresh feeling. With food served in hot dishes, customers get a message that it’s time to sit and have a fast but relaxed meal. The key concepts, “new hamburgology” and “not so fast food” are strategically positioned in the store.
Given these strengths of H3’s offerings and brand, you can see how they have innovated in the market, creating a new type of burger restaurant that excels in many ways in terms of the value it provides to customers.