What Strategies Fueled Bastard Burger's Journey to 75+ Locations?

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About The Episode

Welcome back to the Food Service Growth Show! In this episode, we delve deep into the phenomenal success story of Bastard Burgers with none other than Simon Wanler, the CEO and Co-founder. This episode is all about- What strategies fueled Bastard Burger’s journey to 75+ locations?

Join us as Simon Wanler takes us on an exhilarating journey, unraveling the mysteries behind Bastard Burgers’ extraordinary growth. From the conception of its name to navigating the challenges of rapid expansion, every aspect of Bastard Burgers’ success story is laid bare.

Prepare to uncover the secrets behind the meteoric rise of this groundbreaking restaurant chain.

Read The Interview

Carl: Hello, I’m Carl Jacobs and I’m co-founder and CEO of Apicbase. At Apicbase, we are building the world’s best food and beverage management platform. But in this podcast series, it’s all about finding answers on how to grow and scale your food service business. I’m talking to numerous experts and industry professionals who are passionate about building a healthy food service industry. Join me on this fascinating journey of entrepreneurship in food.

Welcome to The Food Service Growth Show. I’m very happy to have Simon Wanler as our guest today. And if you’re joining the Food Service Growth Show for the first time, make sure to check out our website on thefoodservicegrowthshow.com because there’s tons of more interviews there, all about scaling your business in the food service industry. And if you’re looking to do it yourself, then that might be a great place to start.

Simon: A lot.

Carl: Or what’s the top three learning?

Simon: Boring answer is but I think the most important answer is to surround yourself with great people.

Carl: I don’t think that’s boring at all. I think that’s the main job of the CEO. Otherwise it’s impossible.

Simon: Early on when we got Wilhelm on board, to have someone to be a mentor, but also him telling me, you need people doing this and this around you, you need someone in charge of that and just building that. And also we were pretty early on offering co ownership to key members of the team. I think from restaurant one actually. Like ESOP employee stock options. Yeah, early on they just got to buy in at a good price. Now we have a management programme in place where you’re allowed to invest in certain mechanisms, but I think that was really good to get there. So they also have a part of the upside and they really have this engagement and enthusiasm. So I think that’s the biggest key. Otherwise it’s impossible and also a hard answer but do not surround yourself with bad people. And if you do, do something about it, make sure you have great people and don’t be too afraid to make tough decisions. That’s life. So that’s one.

Second one I would say care about the details. I’m nerdy in everything from, especially regarding brand marketing and product. But I think as a CEO, especially as a founder CEO, I’ve been here from day one, I know what the brand and the product should be and keep caring about that in detail I think is good. And then just don’t be an asshole. Be good to the people around, have the door open, be there. I think it’s important just because the company is getting big, you need to be close to everyone.

Carl: Yeah, I feel a lot of value and a lot of love going through your words. I really love it and I really appreciate it. And actually maybe I dare to say that I totally agree with you because I think the way that you are explaining it, I try to run my company as well like that. So I totally understand.

But as I said today, it’s Simon Wanler from Bastard Burgers, a premium hamburger chain from Sweden. And my first question, as always is, Simon, who are you and what have you been doing in the past and what made it that you were the founder of Bastard Burgers?

Simon: Thank you. Glad to be here.

Carl: Welcome.

Simon: Big question. I’m just over 40 years old, living in the north of Sweden. I’ve been running businesses for about 15 years in different industries. I come from an entrepreneur’s family. My father has always run his own business and he’s also been a part of pretty much every business I’ve ever run as well.

Carl: All right.

Simon: Yeah. And it’s been working great, actually. And he’s a finance manager or at least like or a shareholder. In everything he’s been doing. And it’s also been good. He’s been great with numbers and also really financially responsible within the business. So extreme financial control from day one in everything we’ve been doing. I have other strengths. So it has been a great combo, it’s proven.

Carl: All right.

Simon: But I worked in the restaurant industry for ten years, eleven years, both in service and a lot of time as bartending, bar managing, but also as a consultant, doing training, menus, these types of things, other industries in the restaurant. I have been running a small marketing studio for a couple of years. Love to work with brands, building brands. Me and my father started a home cleaning or home service business when they had that tax reduction in Sweden, launched for home cleaning. We started that as a pure business idea and scaled that and ran that a pretty long time and scaled it into five, six different cities and we bought up some smaller companies. It was a great journey there.

Carl: And are you still owning that business?

Simon: No. Right now, all my focus is on Bastard Burgers.

All right. So you say you’ve been in the food industry for 15 years, nightclubs, et cetera. I mean, was it always in an operational role, or did you start out as a waiter, or how did you get in there?

Simon: No, I have nothing to do in the kitchen. That’s not my expertise.

Carl: All right, but you did some menu development?

Simon: Yeah, but mostly for bars.

Carl: All right. Drinks are your thing?

Simon: Yeah, I’m more into the beverage side.

All right. And tell us a little bit about Bastard Burgers. Where did it start? Where does the idea come from?

Simon: When we started Bastard burgers, the first one, it was a side project. Back then, I ran two other more classic restaurants in Luleå, one Spanish tapas restaurant and an Italian place. And I was approached by a childhood friend of mine who wanted to do a street food concept in Luleå. He had no background in the hospitality industry, but he also loves brands and has been working a lot with brands. So we started bouncing ideas off each other. We both love hamburgers. I mean, I still eat, I don’t know, ten hamburgers a week at least.

Carl: How do you stay healthy?

Simon: I’m not sure I do. No. But it’s always been a lot of hamburgers. And we started building the concept around Bastard Burgers. We built mood boards, and we visited the great Burger places in Stockholm. We saw that we have a similar idea of what this street food concept should be. And also, I think, with a lot of learnings from the more classic restaurants, at least I also knew what it shouldn’t be. All the complicated and complex aspects of running a classic restaurant. We needed to remove all of that for this. This was a small, small space. We had 16 seats, 17 seats, and a really small kitchen. But this was supposed to be like this classic hole in the wall burger joint. And I think we also brought in a friend who has been working with Burgers for all his life before this came from one of the big chains here in Sweden. So we contacted him, and it was the three of us that started to put the pieces together for Bastard Burgers.

Carl: All right.

Simon: So that’s really how the idea started to build up. The name was supposed to be a placeholder. It wasn’t supposed to be called Bastard Burgers from the beginning.

I said, I want something that takes up the same space as burgers, and it wants to start with a B, so we can start doing graphics and logo types, and it would fit in round logos and squared logos and everything. So we will replace the name as we go forward. But then we started calling it bastards instead of Bastard Burgers. And we pretty quickly saw, okay, this is a brand. This is something we can build on. So the name stayed.

Carl: All right. And can you reveal other names that didn’t make it, or is it just Bastard Burgers?

Simon: It was the placeholder. And then we never got to the part where we started to find other names because that name stuck with us.

Fantastic story. Actually, you mentioned that. Is it correct to assume that it was really about mood boards and really the storytelling first and only after that you came into, let’s say, more the food or how did it. Because you are a brand man, if I’m correct.

Simon: We started that with, like you said, the mood boards. And also, I think we came pretty far with the interior and the feel of the concept.

Carl: So how do you get from interior and feel and mood board to the perfect hamburger?

Simon: We both had a pretty clear day. I mean, we both traveled a lot, we both ate hamburgers all over the world and we had a pretty good time. Okay, this is the goal. This is sort of what we’re looking for. We want a real street product, not the big bistro burgers. And it’s supposed to be a messy street burger. We both had the same idea. And also, I would say Sweden is, I would say, one of the best places in the world to eat great burgers. So you really don’t have to travel far. We went to Stockholm. We visited all the best places in Stockholm, the flipping burgers and these types of places, to get the last sort of inspiration there. But we were clear. I mean, I put out the outlines of the offerings because I wanted it.

The difference between Stockholm and Luleå is you can’t be as nerdy or as niche in Luleå as you can be in Stockholm, because you don’t have that crowd up here. You need to be much more inclusive when you build it in Luleå. So we needed to have something for kids. You needed to offer regular drinks, not just handmade, premium, whatever. So we wanted to be a bit more broad and inclusive in the menu.

Carl: If you could talk a little bit about that. When you are working on that mood board and you are writing down ideas, what is then the target audience that you have in mind? Because as you said, you can’t be too niche. But I mean saying from 0 to 99 is maybe a bit broad. So what was the ideal person you had in mind when you opened or when you wanted to open Bastard Burgers?

Simon: We thought that we would pretty much attract the 19 to 35 male something like that. The same as us, we built this concept for ourselves, but we saw that just being pretty clear on what type of concept we are we attracted everyone. I actually talked to one of the marketers from one of the big banks and insurance companies here in Sweden. We talked about this and they said that one of their most successful campaigns they have ever made was extremely niche in the message it was to females between 20 and 30. But just because it was so clear, it attracted so many. I think it’s the same here. It’s just people like a clear concept that you know what it stands for.

So I think that was good because it was hip hop, graffiti, skateboarding, and all of these things. So we thought, yeah, this will be our crowd. But when we came there, you had families, you had elderly, you had the blue collars, you had all of these people coming. So it was great that we also sort of saw the big opportunity here, when we saw the strength in the brand and the product. It is as if you give a very clear concept to people and then people can decide whether or not to step into it. But being clear is already halfway gained, I guess.

Carl: All right, so then the mood board is ready. The burger is finished. Ready to open. You opened the first one in 2016. How many are there today?

Simon: Today we have 75 restaurants.

Fantastic. So that’s somewhere like six, seven years that you opened 75 restaurants. Can you tell a little bit about that journey?

Simon: Absolutely. I like to bring up how we did a small business plan when we started the first restaurant. About to pitch to the landlord and to pitch to the bank. And just to be clear that we are on the same page, the founders. And in that business plan, there is a small plan for growth or scale. And we said that in five years, we hope to have three restaurants in the north of Sweden and maybe a food truck.

So there was some small plan there to scale, but we had to adjust that pretty quickly. But I think one thing that we also put in this first business planner that’s been really helpful for us still is extremely helpful, is we put in the keys that are Bastard Burgers. And one thing is the best burger in town. That’s why people are going to come through the door. It’s to eat the best burger. So that’s our business idea. But then we also said that we’re going to be a great place to work and that people are going to be proud to wear the Bastard Burgers brand. So these things we had with us when we opened the first restaurant, and I think they have been really helpful.

Not losing our focus going to 75 restaurants that we are today. But the first step we did was I actually lived in Uppsala in southern Sweden when we opened the first restaurant and when we saw the potential and the success we had in the first. I mean, we sold close to 800 burgers a day in this. Like I said, we had like 16 seats. People stood in line for hours. We sold out of meat almost every day the first months there.

So the hype was crazy and we needed to see if this is just because it’s Luleå, is it because we are from Luleå? We know Luleå. It’s a bit easier for us to do business up there. It’s my hometown. It’s hometown in Uppsala. It’s a bigger city. There are established good burger places there. So there is some competition. And also we know nothing about Uppsala.

So we said, let’s test it. Let’s try to open a second best burger in Uppsala. So we did that for five months after the first one. We opened in the central Uppsala and we got the same response there. We got the same crazy lines and the same great reviews. And another thing happened in Uppsala, actually, the people from Stockholm came and visited us. They don’t go up to Luleå. It’s too far. But to Uppsala, you got the Youtubers and the foodies and the bloggers and everything came to us, tested us and gave us great reviews.

And then if you talk about that, two questions pop into my mind. First of all, do you remember how many burgers you needed to sell for your business plan to work? How many were there?

Simon: The prognosis and budget we did for the first one was 140 burgers a day, average. If we did that, we had a healthy business at 140. And actually, one of the founders, Rickard, who came in with the background from hamburgers, he said, we’re going to do 500. I said, that’s impossible. That’s more than we sell in the à la carte restaurants I have. It’s a big restaurant. It’s 120 seats. We can hardly sell 500 portions there. That’s not going to happen. And then we did 800, 700. 800. He was the closest one to being right.

Carl: Yeah. If you sell 800 burgers in the first weeks and months of opening your first outlet, does it go wrong sometimes, or were you already perfectly rotated?

Simon: I think one challenge was we didn’t build the restaurant for 800 burgers and we didn’t build the team for 800 burgers. So everyone needed to work from opening to closing six days a week. We actually planned to have it open seven days, but we needed one day closed. We actually had plans to be night open on Friday and Saturday. Before the first weekend, we decided we’re not going to do that because this is going to be enough to handle already. And we also thought, okay, the hype is going to calm down. It’s not going to stay like this, so let’s just fight through it. And also a clear message to the one in the restaurant, never rush. The people are here on our conditions. Talk to them, be calm. They know they’re going to wait in line. Let them wait in line. Never rush the burger, never rush the order. Keep the service up. Be confident, be calm. Just talk to the guests and don’t stress.

Carl: All right!

Simon: We kept that. But then after we opened at the end of September, by the end of the year, when we saw the hype, it’s not dying. We shut down for a while. We flew the entire step to Las Vegas for. It was supposed to be for inspiration. I don’t really know if we got much inspiration back from there, actually. But the guys had a good time there and we hired some more people, trained them. We did some changes in the restaurant, better storage and everything. So we need to adapt. And we also brought that to the second restaurant we opened. We hired a bigger team and we made a bigger restaurant and bigger kitchen and storage.

Carl: Do you still do 800 burgers a day in the first one?

Simon: No, not in the first one. But we actually opened a second restaurant in Luleå. So now it’s split out a bit more. Now we opened a bigger one in a better location here in Luleå as well.

Carl: All right. But you’re still doing above target, above the 140 burgers a day.

Simon: Yeah, definitely.

All right. And the second question I had about your initial story about creating the hype. Again, looking into your marketing background a little bit. I mean, what did you do to get to 800 Burgers a day? It can’t just be by accident. You open a new restaurant and then suddenly 800 people are in front of the door. How do you get from 0 to 800 in the first week?

Simon: I think one thing was just great timing because you’ve heard of these premium burger places in Stockholm and in Gothenburg, but there was nothing, I would say nothing north of Uppsala in Sweden, more or less. The premium burgers were a thing for bigger cities just to have this. And also there was a lot of talk in Luleå about someone who should do premium burgers with someone. So there was really this need that people wanted to have. And also, Luleå has the cities around Luleå, smaller cities. The people come to Luleå a lot. And the word spread quickly to these cities. So people came from other cities just to try this. But I think one thing is the name because it stands out.

We also saw this when we opened in Finland and we opened in New York. The name is perfectly edgy to draw attention. You remember it. It’s not just a name, it says something, so you remember it. Local papers wrote a lot about the huge lines. Also because we sold out meat. And also I was clear, don’t apologize for selling out meat, because this also shows that we have fresh meat. We grinded the meat every day in the restaurant and when we were done, we were done. So we just put up a note on the door saying, we’re out of meat, see you tomorrow, bastards. And also the papers took a photo of that and did a magazine. Oh, they keep selling out meats And also that throws even more the fear of missing out and all of that. So that really helped in Luleå and then in Uppsala when we got top ranked burgers in Sweden.

I think top three or top five in Sweden from the major food bloggers and everything. It really built on the hype. And then you go from the first one to the second one to the third one pretty fast.

Carl: First of all, how did you finance this? I mean, was this bank only, or did you have a fund you could trust on? Or how did you go so fast? Because, I mean, a bank can maybe help you with the first one.

Simon: Yeah, we had a good set up between. We did like a three way split. So one third was cash flow or our own money. One third was a bank and one third was a Noriland’s fund and a fund up here in northern Sweden to support businesses. But also we built the restaurants extremely low capex. The first one we got the landowner to pay for all the expensive stuff and the rest we built ourselves. I think we put in like 30,000 Swedish crowns or 50,000 Swedish crowns to build the first one. And then the cash flow we generated from that one helped us to the second one and so on. And also we got help from a lot of our wholesalers because they saw the potential here and the volume. So they helped us as well. So our third got partly covered by our wholesalers. So that gave us the possibility to scale pretty quickly without. And also we had extremely good cash flow from day one. And we were profitable the first month.

Carl: Yeah, of course, if you do seven or six times your business plan, probably it will help you. And then I hear you say in the beginning, the first restaurant, you were working in it yourself, I guess I mean running it.

Simon: No no, I wasn’t even the CEO back then. Kristofer, who was supposed to be the CEO for Bastard Burgers. I had my focus on the two other restaurants, actually, because this was the side project. But when we opened the second restaurant in Uppsala, where I also lived, I stepped in as the CEO and switched my focus completely over to Bastard Burgers. But I never worked in the restaurants. I’ve been just working overhead.

Okay, and what’s the reason why you became the CEO? Let’s say after the second restaurant, I understand that you had a side project. Did you sell the restaurants then your other restaurants?

Simon: No, but we got good management there, so I felt comfortable stepping back. I saw a huge potential in this and that this needed full focus. Also, the Uppsala business was big, and we started looking at the next step. So it made sense for me to step in at that time.

Carl: Yeah. Six, seven years later, you’re 75 stores. When did you start to feel the pain of scaling? I mean, the first three you probably could manage pretty easily. But when do you feel that you’re on the limits of the original structure?

Simon: I think you felt it actually from the second restaurant you started to have. I mean, it’s the same as with children. It’s a huge difference between one or two children. But I think when we really understood that we need to do something about it, it’s when we really understood the potential we had in Bastard Burgers. I think a lot of learnings from when we scaled the home cleaning company, because we didn’t build for scale at any time. We just scaled. And we also learned what happens when you do that. Because all my time and all my father’s time was spent on just sustaining it, just staff, guest relations, just daily business all the time.

So all the time we used to spend in business development, in launching new services, launching into new cities, we didn’t have time for any of that. And I started to see the same here, that all my time started to be spent at daily business. And I said, we need to get someone on board who has done this before.

And I also had a guy in mind because I met this guy when we looked at O’Learys, who is a Swedish sports bar chain or is an international sports bar chain. I met him a couple of years before that and was extremely impressed with his way of running a chain. So I contacted him.

His name is Wilhelm Vintilescu. I contacted him and said, look, we have this burger place. We have four restaurants. We are about to open restaurant number five and six and we think we really have something here and we need to get some experience on board. And we offered him a place as a chairman of our board and also to come in as a stakeholder to buy shares. So we met with him first and then the entire team. He is an extremely strong personality with extremely strong views and opinions. And he was extremely clear on what he saw for Bastard Burgers and what we needed to do for this to be a success, but also for him to be interested in joining. So first he pitched his vision for Bastard Burgers and it was a classic, like, napkin sketch. But he said that we need to pull the brakes right now and build and look at the organisation and build a structure for the organization, because we were four or five guys who did everything together. We need to have someone in charge of this, this, this, this, this.

And in the beginning, maybe you will be in charge of three or four things, but you need to have a plan from which things are you going to let go when you scale and when are you going to let them go?

Simon: We need to get someone on board who is an operational excellence guy because it’s a huge difference, like you said, running one restaurant and then building operational excellence in a chain. So we need to have someone running the operations department and we need an external organization to help us build the restaurants, because now we are out there ourselves putting stickers on tables, putting tiles on the walls, and they keep falling down. We needed someone to help us build the restaurants and he said, we get this in place, then we open 25 more restaurants, 30 more restaurants. Then we bring in a strong financial partner, private equity or industrial partner.

We get the resources to go into the Nordics and then we open in Finland and in Norway, and we are with them for four years, five years after that we find a big international player and then we take this brand and, like, back then we had the one restaurants in Luleå, in Uppsala, in Östersund, in Gävle. So we were small, but that was his. Far away from global domination. Yeah, the ambition was there. He really put the vision up there for us. And also he said, if he’s going to be interested, we also need to have a couple of values added to this. One thing is our view on green food and vegan food. We had, I think, two vegan burgers on the menu. We thought they were great offerings. We started in Luleå, where the vegan sales weren’t really that high, but he said it’s one of the trends that we need to look at. Also, his daughters were vegan, so he said, I’m not doing this. He said, you have one year to make the menu mirrored. So everything you offer as meat, you need to offer as plant based as well.

Carl: Wow, that’s quite ambitious.

Simon: Yeah, you have one year. And he said, you need to be much more equal. You’re just a bunch of dudes. There are bears, tattoos and burgers. You’re not going to build a successful change on a bunch of dudes. So you need to do something about this. And we said, oh, when we are recruiting, we get 99% male applicants. And he said, you need to have a plan for that because that’s not going to work.So you need to find a way to be a more equal company, and then you need to have active sustainability work. You’re selling red meat. You need to have a plan here.

Carl: Yeah.

Simon: So he came with this vision and these values and said, if we are aligned here, I’m in. Let’s do this. So we talked, me and the rest of the team, and we all agreed, okay, we need to get him on board. It’s a pretty powerful vision.

Carl: Yeah. And he’s a salesman. He has such enthusiasm and strong feelings. He’s a force of nature.

Simon: So we said, yes, please join us. But, yeah, he did. And we made plans to act on all of his demands, and we ran with it. And that’s pretty much. We opened 30 restaurants. We found a partner in Equip, which is a partner now, and together with them, we’ve entered the Nordics.

Carl: Fantastic story.

Simon: Yeah, that was a huge game changer for us, getting him on board.

Yeah. And then in terms of, for example, the whole vegetarian vegan trend, is the menu today 50 50?

Simon: Yeah, pretty much. It took 13 months, which he loves to bring up whenever he can, but we did it. I think the hardest part was the toppings, because the replacement for mayonnaise wasn’t good back then, but over the year, we really got a good one. And actually, now all our dressing is plant based.

Carl: All right.

Simon: Even on the regular burgers.

Carl: And how does this reflect in sales? Is the vegan part 50% of the sales or even more?

Simon: No, the vegan part is it was a positive trend for the first three, four years, right up until Covid, I think we were up almost closer to 20% of our sales were from the green menu. Extremely locally differentiated. In the north of Sweden, much lower vegan sales. Parts of Stockholm, we were up to 45% at some restaurants Malmö, Gothenburg, also higher, smaller cities lower. So it’s very different. So you could actually see which people lived where, in which city.

Carl: Where are the vegans living?

Simon: Yeah, it was very clear to us. But then with COVID something changed. So the trend that’s been going steadily upwards stopped. And it’s actually declining a bit right now.

Carl: All right, so that now it’s 15%, I guess, or something like that.

Simon: Yeah, I think it’s between 12 and 15 right now.

Carl: Could you argue then, as an entrepreneur and looking just into the business, I understand of course vision and mission is one thing, but that you are spending a lot of money and time into only a small section of your sales, because the vegan menu needs to be there. You need to spend time and energy and source the ingredients. But it’s only 15% of your sales.

Simon: Yeah, I think one thing is to keep we all know it has to, and it’s going to come back up. I think when the world is like it is right now, people have so much to focus on and be afraid of. I think that is hurting the vegan sales right now and we see that. But we have an extremely strong position here with our plant based menu and we’re going to keep that position. But like you said, one of our goals is to reduce the amount of red meat we’re selling. The vegan has been our main driver to that. But obviously now if we see the vegan isn’t really getting the increase we want, we’re looking at other options to add as well to the menu. New categories, new ways. You have the Halloumi or swedish grill cheese, you have the chicken. You have these other types of categories that we are working with.

Can you translate that into business numbers from a cost perspective? Is a meatburger more expensive? Is the margin smaller or is it equal?

Simon: If we’re looking at the plant based option we have now, the plant based protein is much more expensive than the meat right now. We are in constant discussions about this because our dream is to be able to have the same price towards guests. So we would love to have the same price in both the meat and the vegan protein. Looking at chicken, depends on if we’re going to have chicken. It’s going to be a premium, premium chicken product with the premium coating. So I think that would be roughly the same as meat and vegetarian.

Carl: Or the vegan option is more expensive you say, is this a scaling issue? Like if you would be selling 50% of your sales, would it be cheaper or is this just a very expensive product?

Simon: It’s an expensive product right now, the one we’re having.

Carl: Yeah. All right. That’s interesting actually. Your vegan burgers are thus more expensive than a meatburger.

Simon: Yeah. Not as expensive as they should be, considering everything is more expensive for them. We’re taking just a small part of that out because you need to be commercially viable as well. But we are taking a small part of that out. But margin wise, the meat burgers are better right now, but we are working to change that.

And if we talk about unit economics a little bit, could you share with us what’s the margin you take on a burger or what’s the cost percentage of a burger, a meatburger and a plant based burger?

Simon: Yeah, we have around 74% margin on the burgers and a little less on the vegan burgers.

Carl: Yeah. Okay. All right.

Simon: I would say when we are at that level right now, which is sort of an all time high, which is incredible, considering everything has been going up in prices lately. So I think a big focus for our purchasing department has been to get us to those levels this year. And it’s a healthy level to be at with all the cost increase that we are fighting right now.

Carl: Yeah, it’s crazy. Well, a lot of people are also talking about recession. Do you see recession happening in your sales?

Simon: Yeah, I have to say, I mean, not as badly as we see, because right now we’re looking at huge amounts of data from industry, from banks, from card suppliers, everything. So we see that the industry and our segment is having problems and we are beating the market by far. But we are not at the levels that we expected to be right now. We are losing some numbers of guests. Some top level revenue.

And that was my question going to be, is it guests that you’re losing or is it average spend per ticket that is hit?

Simon: Guests. So the spend per ticket remains the same, but there’s less people going out. Yeah. And we are actually increasing sales per particular with a lot of actions we are doing right now. So we’re trying to balance that with maximizing the guests.

Yeah. All right. That’s interesting, actually. And also 2023 was kind of announced as being a difficult year. Also, for me as an entrepreneur, I think if you didn’t take any measures, it would have been not such a good decision, I think. Did you take some measures?

Simon: Yeah, we did. First, we had Covid for two years. So going into Covid, we said, okay, we need to change a lot of things right now. To be able to handle this. So we did. We had a clear strategy, a clear plan, we acted on it. And the COVID years, we did great. We were able to keep expanding and scaling and had a really good business through Covid. And like everyone else, we expected to see an upturn in the market when the vaccine started rolling out and the society was going to open up again.

Like you said, at the end of last year, or in the middle of last year, when you started to see the problems arising, we again said, okay, it’s not going to be a normal year next year. We need to look at how we are going to handle it this time. And one clear change was to completely switch from growth to profitability. That was the first big step. So we stopped all expansion. We needed to adjust the way our overhead looked. What type of people do we have working here? We needed to change because we had a lot of people working on expansion, and with no expansion plan, we needed to switch focus. So we sat down, we made a clear, I would say, plan for 2023 with six goals. This is what we’re going to do next year. This is how we’re going to measure it, this is how we’re going to deliver on it.

We had the same plan, same goals towards the board as we did towards the entire organization. I read a line here that if we do this, 2023 is going to be a good year for us. It’s not going to be what we thought six months ago, but it’s going to be a good year, it’s going to be a healthy year and it’s going to give us bigger market shares and a great platform to stand on when we can press play again.

Yeah. And you mentioned six goals. Can you talk about those goals you know give them a bit of a face?

Simon: Yeah, absolutely. A bit again here leaned on the first business plan and the core values that Bastard Burgers stands for. One of them is the product, the burger. And we said it’s more important than ever because it’s going to be fewer guests. The competition is crazy right now because everyone opened premium burger chains. So there’s a lot of places to choose from. We need the guests to come to us and we need them to come back after they visit us. So we had one goal on product and menu, which was measured by guest satisfaction and also by doing internal audits and mystery shoppers. So the scores are based on taste and offerings and set goals to improve this over the year. We did a big workshop together with Burger Dudes and Kebab Spotting are the biggest food sites, street food sites in the Nordics. So we sat together with all of them, went over an entire menu, then visited other restaurants, and they had a mission to find areas of improvement. This can be better. This can be better. And I said, really really dig in there and tell us what we’re not doing good enough.

Carl: What can be better?

Simon: So we got a list of things that they needed, anything. This can be better. This can be better. This doesn’t make sense on the menu and stuff like that. And we made a plan. We went through the entire menu. We went through, we adjusted bread, we adjusted meat, we adjusted toppings. Everything over the year also took away some odd products. We asked all the employees, which are the products that’s the most pain in the ass to make. So we got that, and we saw, okay, this product, everyone hates to make it, and it doesn’t sell. Let’s remove it. So we made the menu a bit leaner, removed small products, launched a completely new kids menu, added some products that we also asked our employees what’s mostly requested out there that we don’t have.

How much of these actions were numbers based versus, let’s say, gut feeling based? Because asking people what’s the most difficult one is kind of a gut feeling action. But how much of it was actually numbers based? Like we just look at the Miller matrix, let’s say, and what are your cash cows? What are your dogs? What are your question marks? Do you work like that?

Simon: Yeah. When we asked the people in the restaurant, we had a pretty clear mind because we have a studio kitchen here at the office. We work here every day. I work really close to our food and beverage manager. And we talked a lot. And we said, okay, these things really don’t make sense. So a lot of it was just to confirm from the staff that they agreed with us. So it was based on also, we have a lot of people in the office that used to work in the restaurant. We talked with the senior operations team and we got a good vision, but we also wanted to ask.

One part is to make them feel part of it that they can affect. So we just don’t push things on them and change the menu without asking them. But it was extremely good. And also we see that we got the average ticket time down a lot over this year by doing this so we could follow up on it. Hard to have the correct numbers making the decision. Like you say, it’s a lot of gut feeling and just common sense, and then we can confirm it afterwards now that we have shortened the ticket time and we have increased employer satisfaction also over the year. So that was one goal, to improve the product and menu. Then we had the other one. Like we said from the first business plan, we had the product and then we had the people, increasing engagement and pride. We knew a tough year will be tough on the people in the restaurants.

Lower sales will mean that you will have tighter scheduling. So we needed to look at this continuously and do actions to keep the engagement up. We measure it with, we do weekly temp meeting measurements, asking all the people five, six questions every week, getting really good insights on a restaurant level. It’s extremely accurate and it’s been really good.

Carl: And the ENPS. What’s your ENPS?

Simon: If you give me a second, I can actually check that because we are actually presenting this report At the board level.

Carl: Great.

Simon: See, engagement and pride. Current ENPS is 39.

Carl: That’s more than satisfactory, I guess. Yeah. How many people have answered? How many people work for Bastard Burgers?

Simon: We are around 900 in total. And I think we have a 70, 80% answering rate. Something like that.

Carl: Yeah. Nice.

Simon: And we set the goal this year to 36. So it’s good to see that we are already at 39.

Carl: Yeah, that’s very nice.

Simon: And on winning temp, they put together all the different work environment, leadership. I think it’s 15 different categories. The total there our goal is, it’s on a one to ten scale. Our goal was to be at 8.0 by the end of the year. We started on 7.8, so we wanted to improve. Even though it’s a tough year right now. I see we are on 8.3, so way above goal. So that’s also good to see that the actions we’ve been doing here and have been working.

Yeah, congratulations on that. And if you talk about making sure that you survive, let’s say the year you go into profitability mode, this also means you need to keep track of your costs and the back of house. What are the goals you implemented over there?

Simon: So we had increased engagement, pride, we had the product and menu. One goal was, like you say, cost savings. Because we saw that we’re going to have increases on commodities, on rent, on salaries, electricity. All the major cost posts will increase during the next year and we expect lower sales. So we need to find a new cost structure for our restaurants that’s working for us. So we actually set a goal. We looked at it, okay, we need to save 20 million, a yearly effect of 20 million Swedish crowns in savings. Then we’re fine. Then we’re looking good. And a lot, of course, lands on the purchasing department to find new deals, looking at new categories that we haven’t started to look at yet. Rent negotiations, huge part because rents went up 11%, indexation in January. So ongoing discussions with landlords to figure out how to. I mean, our restaurants need to have a P&L that’s good on a restaurant level, otherwise it’s not a good restaurant for us. And we have a good relationship with most of the landlords, so it’s been good discussions and we managed to make a lot of savings on that part. Electricity consumption like fire on fire off, routines, stuff like that. Also looking over all electricity agreements.

Carl: Did you turn down the heating a little bit in the restaurants? Like go from 20 to 19 degrees?

Simon: No, but another thing we saw, look, internal routines, when they start work early, they fire up all the kitchen equipment, they can wait 2 hours, 3 hours, huge savings and all of this and turn it off at the right time. And some days maybe you don’t need all the fires on a Monday.

Carl: Exactly. It asks a lot of responsibility from the people working for you.

Simon: And also a lot of I mean, we need to set good frameworks and good tools for them to actually do this. And agreements with delivery partners, I mean, delivery, say from before COVID it was a couple of percent of our sales. During COVID when it topped, 45% of our sales were through delivery channels. It’s down now, but it’s still a big part and it will be a big part of our sales and the fees will be a big part of our costs. So landing new agreements with the delivery partners has been a big part of it, which we have done with both our partners and also just when we started to measure it and we put all the actions in this goal to 20 million. And every month we presented, okay, this department came in with these savings and every department really delivered on this. It could be that we find a new supplier for office material. We’re saving 20k a year. We found these old licenses, we don’t need these licenses, we can get this license instead and we’re saving 40k a year. So everything started to add up.

Carl: And the latest numbers I just saw here, it’s with just above 30 million in yearly effect in sales. So you are going to go to profitability?

Simon: Yes, we have been actually through all of this, but we need to have a better cost structure than we were looking at going into 2023.

Very interesting talk, Simon. I am looking at the time a little bit. So I have two more questions that I want to ask you. Moving on to the second to last question, in all of the scaling from two, let’s say because you were CEO from number two. So from 2 to 75, what’s the biggest, the most important learning you had as a CEO?

Simon: A lot.

Carl: Or what’s the top three learning?

Simon: Boring answer is but I think the most important answer is to surround yourself with great people.

Carl: I don’t think that’s boring at all. I think that’s the main job of the CEO. Otherwise it’s impossible.

Last question, Simon, before we call it a day, from an industry perspective, I mean, you had the great chance to work with somebody who has done it before and had a vision and demanded a lot of stuff such as vegan and vegetarian. So you’ve made a lot of predictions for the future already, but where is the industry going from here into five years from now? I mean, how do you see this industry evolving?

Simon: For our segment, the fast casual, I would say digitalization is number one, two, and three. It has been for a while, but really boosted through Covid, an extremely mature market right now. And we’re doing big consumer research showing that our guests, the huge majority of our guests, want to order through digital channels. They want to order through self service kiosks. They want to order through the app. And I think that’s the thing we are focusing on the most right now. But it’s going to be the most important because people consume on different patterns now. It’s not classic sit down dinners, not classic lunches. you eat quickly, you eat at different times, you eat alone. So to meet up this need for convenience, I think digitalization is. If you miss out on that, I don’t think you’re going to have a tough time.

Carl: Yeah, I can understand what you’re saying. I think digitising is actually getting one step ahead of your competition.

Simon: Yeah, absolutely. Our absolute top priorities are all these things and we have been really far away this year, but I think that’s where you need to go.

Carl: All right, thank you very much, Simon. It was a very interesting conversation and to all of the listeners, thank you very much for staying with us and see you next time at The Food Service Growth Show.

Simon: Thank you so much.

Guest & Host

Simon Wanler

Co-founder & CEO
Bastard Burgers

Carl Jacobs

Co-founder & CEO
Apicbase

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