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MICHAEL DUNNE: I'm Michael Dunne, and you're listening to Oregon Rainmakers on KLCC. On this edition, we talk with Ed Casey, the CEO of Oregon's Burgerville. He's seen a lot in the industry, from COVID to consumer demand changes to competition from all sides. We talk to him now about how the restaurant business continues to evolve. Ed Casey, the CEO of Burgerville. Welcome to the program.
MICHAEL DUNNE: Thank you. Glad to be here.
MICHAEL DUNNE: So, as I understand it, you know, you, you became CEO back in 2022. How have things been going?
ED CASEY: They've been going great. And I actually started kind of in discussions with the family. In late 21 I joined up in January 2022 got things organized and situated and brought in some investors and stuff to support our growth initiatives. And we've opened our first couple of stores in well over nine years. So, it's been fun, and we're getting geared up to do lots more.
MICHAEL DUNNE: That sounds great. Obviously, you came in when COVID was sort of retreating into the rear-view mirror. But obviously it's still present and with restaurants, I imagine that was one of the hardest hit sectors. How has that recovery been going for you and Burgerville?
ED CASEY: It is pretty solidly in the rear-view mirror for us in particular and for most of the industry, the one way that you see it still somewhat affecting the industry. And I think you know most industries out there that are service oriented, there's still a lot of people that got, you know, there was, guess you'd call, a major shift in the way people worked, obviously, from home and from remote. And that pattern has never totally reversed, and may never will. Who knows, but the number of bodies showing up at the offices, especially downtown Portland, and, you know, dense office areas, there's still, there's still quite a dynamic shift from that. So, it's changed people's patterns for lunch and for, you know, going out, but, but overall, the industries, you know, back there's people are into patterns that you can at least predict and be prepared for.
MICHAEL DUNNE: Yeah, you mentioned it earlier, but let's expand upon it. Talk about your growth strategy.
ED CASEY: Well, you know, when I came on board, we were, we were coming out of the COVID area. We also had been there for a number of years where the focus in the company had been not so much on the operations and on growth. There were a lot of opportunities to just improve and streamline service. And you know, guests thought the amount of time it took our average consumer to get through our drive throughs was a significant problem. So, we really focused on those just operations and improving our consistency and our execution, and bringing back a lot of favorite items. I had so many emails and texts and calls when I first signed up about bringing back the sweet potato fries. You know what happened to the strawberry shortcake? A number of favorites that had been out there that, for whatever reason, the company had kind of moved away from. So, we really just took stock of where we were at and made sure that we were offering what our guests wanted and providing it in a way that made it convenient for them to come and get it, whether it was digital or drive through or dine in. That was one legacy of COVID that they had not corrected when I came on board. All the dining rooms had been shut down for COVID. Most places had reopened sometime in, you know, the late, early 2021 so we were walking into 2022 with no dining rooms open. So we took care of all of those things. Got things in a place where they were really moving forward, and then got ourselves aligned for this kind of new growth phase for Burgerville. So, we're really focused on contiguous growth. When you ask the question, what are the plans we have a lot of demand and brand equity and markets where, you know, Burgerville has been known, but not operating 60-year-old brand, and so people in Bend and Eugene and Roseburg and Medford and you know all these Klamath Falls markets all over Oregon that know this brand. Brand pretty well. We want to be able to put Burgerville within reach of people that are loyal to the brand.
MICHAEL DUNNE: We're in this sort of strange time in the overall economy. I wanted to get your read on tariffs and supply chain issues and maybe even a slowdown in the economy. How is it impacting your business and the industry?
ED CASEY: You know, it's interesting. You think about the food service industry, and especially Burgerville here, where we try to get 75% of our ingredients we source locally. That doesn't, that doesn't make us immune to the tariffs. Because, you know, everything, even all the, all the things that we get here locally are produced by people that still are dependent on, on products and services and stuff that come from all over the globe. We're in a global economy, you know, around the world now. So, you know, just simple things like the fry oil, most of it comes from Canada, so you get a tariff on fry oil for certain times of the year, you can't, you can't. There are not enough domestic tomatoes to keep the demand supplied here. Sometimes tomatoes are coming out of, you know, Mexico, or certain places that are hit by the tariffs as well. So, we do have to keep a very close eye on where the product is coming from. The other part of this for us, of course, is, since we're growing and building and constructing new restaurants, it's where the steel comes from, where the, you know, where the where all the materials come from becomes very important too. So, contractors have to include that in their bids and try to figure out how they're going to be impacted before we lock things in. And there is quite a bit to consider that said, we just keep as close an eye on it as we can and try to mitigate the impact. We stay very well informed about alternate supply sources, and building some redundancy into our supply chain is, of course, very important right now.
MICHAEL DUNNE: I want to ask you a question about where does Burgerville fit in the hamburger restaurant ecosystem?
ED CASEY: Great question. Burgerville is very unique in that when we talk to most of our consumers, we've even done some more third-party Consumer Studies, a very kind of the one phrase that sums up who our regular loyal guest is. I don't eat fast food, but I eat at Burgerville, the fact that we use locally sourced ingredients that we are working with as best we can, sustainable practices in our supply chain, that we use fresh beef, even regenerative beef. These are things you don't find in a lot of restaurants, full-service restaurants, especially, you don't find it often in fast food, so it's a unique proposition for the consumer. You pay a little bit more than you would pay in a traditional fast-food place, but you're getting a product that's elevated, and I think that's what really speaks to our guests. They just want the convenience of fast food, but they want a great product. They want high quality and they want high attribute food. And we're providing that, and it really resonates with our guests now we get traditional fast-food users as well, but our core customer, our high loyalty frequency guests, are just a little bit they want something a little bit more elevated.
MICHAEL DUNNE: Okay. I Wanted to get back a little bit to the growth strategy in terms of, you know, when you look at a market, is there a certain density that you look at to say, Okay, once we reach x density, that gives us sort of a blueprint for when we want to go to another restaurant?
ED CASEY: Yeah, good question. So, we, the, we do quite a bit of, there's quite a bit of analysis that goes into a potential site we are looking for. First, I'll tell you that we use an acronym that kind of describes our brokers and such, the key priorities that we look for. So, say it's visibility, access, signage, traffic, if we have all of those things on a site that's in a market where we know we can support a burger bill along with a little bit of parking, of course, and we know we found a site that we think is going to be very viable, is As far as an answer to your first question. It's, there's a number of factors that go into it. It's the number. We look at the demographics around a site as what's the daytime population, meaning the working population in the one mile, two-mile, three-mile, ring around a store, what's the number, what's how's the housing density? What are the income levels, and then traffic, or for fast food, traditional use, and for our use, for this format, off right being right off freeways makes a big difference as well? So, if the population isn't dense enough, sometimes there's enough traffic going by and you're at a stop where you get enough people pulling off and back on, that'll provide, you know, an opportunity for us as well.
MICHAEL DUNNE: One of the biggest developments in the industry in the last, you know, decade or so has been, Door Dash and other delivery systems. And I was wondering how it impacts a restaurant such as Burgerville?
ED CASEY: Sure, we call those third-party delivery services. Okay, you know, it's interesting, because I've watched the evolution of our industry over the years, and I would just say In summary, that the trend has always been, I want better food. I want it. I want it better, cheaper, faster, you know, more convenient. That trend never really changes. And so the industry has evolved, kind of always trying to improve upon how we deliver food and the quality of food that we can deliver and the best value proposition that we can deliver, that's what creates the competition in our industry and differentiates the people that stay in the lead against those who don't, or that that just don't last the about 15 years ago or so, when I was first seeing DoorDash and some of the third party delivery companies come in, it was a kind of a pivotal moment for me, and this was pre Burgerville years with another brand, but there was a lot of debate amongst restaurant tours about whether or not to participate in that, because, of course, you're giving up a significant amount of margin to the third party platform. And so a lot of a lot of people resisted that for some time, but you could tell that the consumer was all about it, and the evolution for that wasn't going to change or stop. So, we've had third party delivery platforms have been gaining popularity, not losing, and there's a lot of companies that have elected to try to go in house with that, but it's really hard to compete with. The consumer prefers having lots of choice when they go to a delivery platform for the different brands. So, we have seen it across the industry. I think it represents 15, 16% of delivery orders going out of restaurants now, but that can be as high as 40 or 50% for some of the fast casual restaurant companies out there. I guess the real trick is that you have to embrace it and optimize it for your guest convenience and make it as accessible and easy as you can for the drivers and the actual people working in that industry, because it is incremental. It's incremental sales. And as long as you've got a baseline of positive sales and those incremental sales have more disposable well, they just the incremental sales you've already paid for your fixed costs and your rent and your utilities, and good percentage of the incremental labor that it takes to put out those extra sales isn't that high. So, there's more flow through on the incremental sales that come from the third parties, which makes the margins still work, which is why most people in the industry are still participating with it. But it's just another factor in the kind of total economic model that puts together that makes the restaurants work.
MICHAEL DUNNE: Speaking of another sort of input into this whole thing. Obviously, the labor market has been very tight for several years now. And I just wanted to ask you, you know, kind of how you're managing through that? Because I imagine you're not immune to it.
ED CASEY: No, we're not. Yeah, a lot of it is about, you know, what kind of, how do, how do we make sure people want to work for our company, right? And I can tell you the mission from Burt for Burgerville is to serve with love. It's a really different kind of a mission statement than you would find from any other fast-food company, either a restaurant company for that matter. But there's a long culture in this company of really being here for service. If you don't love to serve, this probably isn't the business for you, but we interpret that a little bit differently than most places here. It's about, are we serving our employees with love, or are we serving our guests with love? Do we do what we take, do we have care and concern for each other, and treat our vendors with respect? So, we want this to be working for our employees. We want it to work for our vendors. We want it to work for our guests, and if we're taking care of all those things, we know it's going to work for the company. Burgerville started giving benefits to employees well, long, long before it was mandated by any kind of law. And more importantly, we pay us a lot more of the premium than any of our competitors would. The employees working for Burgerville that are taking advantage of our health plan really pay very minimal contribution. We're paying over 85% of the premium. So, there's benefits, given that they are financial like that, but also just making sure that we're accommodating what they are looking for in their lives, in terms of time off or flexibility and scheduling and those kinds of things, we try to treat our employees very well so that they stick around. And because of that, we haven't, we haven't struggled terribly. You know, we went from having dining rooms closed, the dining room open. We went from 650 employees to over 1100 employees. And in my first year and a half here now, we're tracking about 1300 1400 employees. So, we look and recruit as hard as we can for the best, but we try to take care of them and keep them as long as we can.
MICHAEL DUNNE: Ed, my last question for you is sort of, you know, philosophical one, but how do you measure success?
ED CASEY: it's a good question. We start with what we're here to do, and we want to provide great, high quality, high attribute food at customers convenience, with kind of breakthrough service. And I know I'm getting that when our reviews are positive, when we're getting feedback from the guests, kind of unsolicited feedback, for me, is the most important piece. So, if I walk into a burger bill, I can feel it right away. There's either within a few minutes, you hear compliments going to the manager on duty or to me, if they recognize that I'm part of Burgerville, you just have the best employees. You have the best food. How do you guys do this? If we are creating that kind of a vibe where we're getting these unsolicited positive comments from guests, and we that I know right out of the gate, we are being successful, that that's going to translate into better sales, better place to work, better return on investment for the for the company's shareholders, and it's working for everybody. So I guess for me, as much as you know, I look at the P and L and the sales and all those other things on an ongoing basis, and we, you know, have our meetings and talk about what we feel good about and what we could do better. But for me, it's as long as I know I can go in and be proud of where I'm working and who I'm working with and what kind of a job we're doing, that I'm going to feel successful.
MICHAEL DUNNE: Ed Casey, the CEO of Burgerville, really appreciate you coming on and talking with us.
ED CASEY: Well, I've enjoyed being there. Thank you so much for inviting us.
MICHAEL DUNNE: That was our conversation with Ed Casey, the CEO of Oregon's Burgerville. This has been the Oregon rainmakers podcast on KLCC. I'm Michael Dunne, your host. Thanks for listening.
