Long gone are the days when a burger cost less than $10.
When James Samara and Brendan McManus opened The Mighty Colorado Burger inside Denver Beer Co.’s Arvada location in 2017, a basic cheeseburger with fries cost $9. Now, the combo is $12, which Samara said is to make up for higher employee wages, food and distribution costs.
The entire restaurant industry has been struggling to keep up under a pile of economic issues since the beginning of the COVID-19 pandemic in 2020, including supply chain issues, labor shortages, the rising cost of minimum wage and an increase in the price of ingredients.
“It’s the perfect storm,” Samara said. “We’re paying our staff much more, and their cost of living is higher, and we’re spending much more on our ingredients, so unfortunately it just has to get passed on to the customer at some point.”
The Mighty Colorado Burger, which operates out of an Airstream trailer inside the brewery, isn’t the only restaurant charging double-digit sums for a burger. The Cherry Cricket, a local institution, charges $11.50 for its classic cheeseburger, while a cheeseburger at Park Burger is $10. At Aurora’s Carm & Gia Metropolitan, its standard extra cheesy burger is $15. And Split Lip, a trendy spot in the River North Art District, charges $14.50.
“The price increases have definitely been felt on most ingredients,” said Adam Branz, owner of Split Lip. “Even for our tiny little burger, we’re still paying $5 a pound on the meat alone, which we are buying higher quality meat, so it’s a cost we’re aware of, but nonetheless, the rising cost of all burger ingredients is something we have to keep an eye on.”
Samara, who also owns El Jefe Mexican Restaurant with McManus, said The Mighty Colorado Burger raised prices slowly over the last three years, adding about 25 cents at a time. But four months ago, it hiked them by $1, its largest yet, to account for some of those growing costs.
“We’re on the lower price point among most competitors in the market, so we have a little bit more range to raise prices than some others, but if you’re selling an $18 or $20 burger, there’s not much more you can raise prices before people just stop coming to your establishment,” Samara said.
While he has seen a bit of customer pushback as a result of the price hike, Samara said that most customers are understanding of the business’ challenges and how they relate to world economics.
“They’re genuinely curious, and the pandemic has made it easier to have those conversations,” Samara said. “If they’re not understanding, they don’t freak out on the cooks or staff, I think they just stop coming.”
Labor costs have increased by 30 percent in the last couple of years due to Colorado’s increased minimum wage, a shortage of workers, and the increased cost of benefits, Samara said, adding that distribution costs for things like fuel have doubled.
As for his ingredients, the price of beef has gone up the most and has been consistently rising since before the pandemic, when previous spikes were isolated in the summertime around high demand. The price of buns has also not slowed down as a result of Russia’s war on Ukraine, which has had a devastating impact on Ukraine’s massive grain exports.
Still, he is hopeful. “There’s going to be people that shutter, like in any tougher times, but I think some of these costs will drop, especially when the effects of the war on Ukraine settle down,” Samara said. “I don’t see this going on forever.”
To understand why you’re paying $12 for a burger and fries, we’ve broken down a list of the ingredients for a Mighty Burger, their increase in cost over the past three years and what Samara and McManus are paying now.
Ground Beef
The Mighty Colorado Burger sources its beef from Greeley’s Aspen Ridge, ordering 20 cases, costing about $52 per case, four times per week. The business has seen a 24 percent increase in the cost of beef since 2020.
Part of that increase can be attributed to the U.S. cattle population declining by 3 percent compared to the previous year, with 89.3 million head of cattle at the start of 2023, according to a U.S. Department of Agriculture cattle inventory from last month. The number of beef cows is down 4 percent compared to last year to 29 million, the lowest total since records started in 1962, according to the report.
Tom Lipetzky, Colorado Department of Agriculture’s Markets Division Director, said the price for “fed” cattle, or cows ready for slaughter, is up to $1.63 a pound from $1.38 a year ago, due to the ongoing drought across the West. That’s near to a record high.
Wholesale 90 percent ground beef, which restaurants like The Mighty Colorado Burger use, is $3.30 per pound, according to the Cattlemen’s Beef Board and the National Cattlemen’s Beef Association, which aggregates data from the USDA.
“Most burgers at restaurants are usually around a third of a pound, so if it’s $3.30 a pound wholesale, they can probably make three burgers out of that,” Lipetzky said. “That’s about $1.10 of beef going into that burger.”
Burger Buns
The Mighty Burger’s buns are made by Denver-based Harvest Moon Baking Co. and have become the second highest cost, Samara said. They have risen 24 percent increase since 2020.
“The cost of flour has jumped through the roof, and their labor costs, I’m sure, have jumped to the same rate as ours,” Samara said. “So if they’re paying 30 percent more based on minimum wage and the market, they must be paying everyone more from the drivers, to the bakers, to the warehouse guys, and it all trickles down to the end consumer.
Mighty Burger orders about 30 cases each week at $30 per case, Samara said.
Harvest Moon, which was founded in 2006, distributes to restaurants throughout the country. Its products include everything from hamburger and hot dog buns to dinner rolls, rye loaves, hoagie bread and ciabatta. A spokeswoman for the company declined to talk about specific costs, but she did acknowledge that the economy has become more difficult for its clients. “Indeed, rising costs of most everything for most everyone have presented challenges for most sectors of our economy, including restaurateurs and their customers,” she said.
The jump in bread costs is a direct result of Russia’s war on Ukraine. Ukraine is one of the world’s top agricultural producers and exporters and plays a critical role in supplying oilseeds and grains to the global market, according to the USDA. When Russia invaded Ukraine last year, the price of flour increased in turn because exportation slowed significantly, and it still has a trickle-down effect on bakeries and restaurants. The crunched supplies of grain, fertilizer and energy, on top of a local egg shortage and increase in the cost of eggs, has made it difficult for bakeries to keep up.
“The headlines have moved on, but the reality hasn’t,” said Eric Dell, President and CEO of the American Bakers Association in Washington, D.C. “Wholesale bakers who make products such as hamburger buns and other staple baked goods continue to grapple with the fallout of COVID’s effect on the workforce, the uncertainty and volatility in commodities markets caused by the Ukrainian war, and unfavorable wheat yields in the United States.”
Cheese
The cost of cheese for Mighty Burger has gone up by 21 percent since 2020. Like beef, there are fewer cows, an increase in the cost of cow feed and tight feed supply, according to the USDA.
The Mighty Colorado Burger orders five cases of cheese per week, costing $48 per case.
Veggies (Lettuce, Tomato, Onion)
Lettuce, tomato and onion have seen the smallest jump since 2020. Lettuce has increased by 15 percent, tomatoes by 18 percent, and onions by 10 percent, Samara said. (An insect-borne virus that destroyed lettuce crops in California’s Salinas Valley, which supplies nearly half of the U.S. lettuce supply, also contributed.)
The Mighty Colorado Burger orders about 10 cases of lettuce, tomato and onion per week, averaging at about $30 per case.
Fries
Every Mighty Burger comes with a side of fries, so the cost of potatoes is also considered when raising menu prices, Samara said. His potato costs have risen by 18 percent in the past three years.
He orders 30 cases of potatoes for fries each week, costing around $40 per case.
The hike in potato prices can be attributed to a shortage in the supply chain. The U.S. potato harvest was barely over 900,000 acres – down from 935,700 in 2021, an already tight year, mainly because of crop production cost increases hitting farmers across the board.