Chains, Chief Executive Tom Mears decided to differentiate his product and sell “bur- gers with a soul.” Mears, the son-in-law of the founder, decided to combine good food with good works. The company began to build its strategy around three key words—“fresh, local, and sustainable.” It pursued this strategy through partnerships with local businesses, farms, and producers. In 2003, Gourmet magazine rec- ognized Burgerville the home of the nation’s freshest fast food. According to the company Web site, “At Burgerville, doing business responsibly means doing business sus- tainably. One example of this is our commitment to pur- chasing 100 percent local wind power equal to the energy use of all our restaurants and corporate office.” The company purchases its electricity from local windmills. Burgerville uses “sustainable agricul- ture,” which means that its meat and produce are free from genetically modified seeds or livestock. In its cooking, the company avoids trans-fats, and once the cooking oils are used up, they are converted into biodiesel. The company buys its antibiotic- and hormone-free beef locally. In addition to burgers, Burgerville offers a wild Coho salmon and Oregon Hazelnut Salad. Meals for children often come with seeds and gardening tools rather than the usual cheap toy offered at the national chains. Burgerville extends its good works to its employees. The company pays 95 percent of the health insurance for its hundreds of workers. This adds $1.5 million to its annual compensation expense. To get its affordable health care, employees have to work a minimum of 20 hours a week for at least six months, a more generous arrangement than most provided by stores. Being a good corporate citizen is expensive when done the Burgerville way. Though the company won’t reveal its financial bottom line, one industry consultant estimated that its margin is closer to 10 percent com- pared with McDonald’s 15 percent.
1. How much extra do you think most people are willing to pay for a socially responsible, sustainable hamburger? How much extra are you willing to pay? Will this business model succeed outside Washington and Oregon? At a national level? Can Burgerville compete with McDonalds globally?
2. What tensions among its economic, legal, ethical and philanthropic responsibilities do you think are most important to Burgerville?
3. Identify and discuss the stakeholders of Burgerville. Who are the most important stakeholders of Burgerville? Why?
4. Are the livestock slaughtered to become hamburgers stakeholders? Does Burgerville owe any duties to these animals? Do animals such as livestock have any rights? Can a company such as Burgerville truly be socially responsible and sustainable when their profits are based on slaughtering animals?