South African firm Famous Brands says it’s joining the burger brand ‘Premier League’.
Owner of Wimpy, Famous Brands, has signed a £120m “mouth-watering agreement” to acquire the Gourmet Burger Kitchen (GBK) brand, which it describes as a pioneer of the premium burger revolution in the UK.
Launched in 2001 in Battersea, South London, GBK was founded by three New Zealanders, together with the creative culinary support of New Zealand chef and acclaimed ‘father of fusion’ Peter Gordon. In 2010, the company was acquired by the Yellowwoods Group. The Yellowwoods’ acquisition marked a pivotal turning point in the company’s history, setting the brand on its current growth trajectory. GBK now comprises 75 company-owned restaurants across the UK and is generally regarded as a market leader in the premium burger category.
Kevin Hedderwick, Famous Brands’ group strategic advisor responsible for M&A activity, says: “As far back as 2007 when we acquired the Wimpy business in the UK, the Group is on record as saying that we would use our foray into the UK as a beachhead to expand our presence in the market as and when suitable opportunities presented themselves. Our investment in the Wimpy UK business has given us invaluable learnings in terms of an understanding of and insight into the local market.”
More recently, Famous Brands stated its intent to pursue opportunities that would enhance its existing income stream with hard currency earned outside of Africa, according to Hedderwick.
“The GBK acquisition achieves that goal, and simultaneously up-weights Famous Brands into a substantially higher league,” he continues.
“In terms of scale and scope, this is the biggest deal the Group has ever concluded, and one which will transform the future of the business. It will be as much of a game-changer for the Group as our acquisition of Wimpy SA was in 2003. Quite simply, GBK is a best-in-class business and brand, with growing consumer equity, supported by a phenomenal leadership team.”
As Hedderwick notes, the GBK brand features a differentiated, flexible Fast Casual business model, providing access to its products across a range of channels: eat-in and take away service, online delivery, and GBK-branded food products in retail outlets.
“This model creates flexibility across meal times, across a variety of occasions, and a wide range of customers across life stages, social groups and ages,” remarks Hedderwick.
He adds: “The GBK business is a unique asset of substantial scale, positioned in the wider, unexploited bespoke burger market segment. Both the Fast Casual and premium burger market segments are growing.”
Hedderwick believes that GBK is such a good fit for Famous Brands that the company intends to transfer many of the burger brand’s best practices back to South Africa.
“The GBK team has built an outstanding infrastructure and their processes are world-class,” he explains.
Alasdair Murdoch, GBK CEO, comments that GBK plans to continue opening 10-15 restaurants per year in the UK, continually improving its food, and will look at other growth opportunities.
In January this year, GBK apologised for an advertising campaign that garnered a number of complaints.
The adverts appeared on the London Underground featuring a photo of a hamburger with the caption: “Vegetarians, resistance is futile”, as well as an image of a GBK receipt with the caption: “You’ll always remember when you gave up being a vegetarian”.