For two friends who had a few too many beers and decided to start a burger business, Tom Barton and Philip Eeles haven’t done badly for themselves.
During a tough 2018 that saw some of their bigger competitors grapple with company voluntary arrangements, closures and restructuring, Honest Burgers has defied the market, enjoying an 8% increase in like-for-like sales, a turnover of £31m, and a business that numbers in excess of 30 sites. It’s a remarkable story and one that has seen Honest Burgers shortlisted for a 2019 Catey in the Restaurateur of the Year – Group category.
Did they imagine they would find themselves in such an enviable position so quickly? “We didn’t have a fucking clue,” admits Eeles. “We just had a few beers in a pub and bought a tent.”
To understand how Honest Burgers has managed to avoid some of the pitfalls suffered by its rivals, it’s worth understanding the thinking behind the brand and the way in which it has been built. Barton and Eeles’ experience of hospitality when they first started discussing their idea in 2010 was pretty limited. Both had worked together at Brighton’s Riddle & Finns restaurant, including for its event catering arm, but neither particularly saw a future in the industry. Eeles initially wanted to pursue a career in journalism, while Barton was reluctantly staring the prospect of an office job in the face. So instead they decided to make their beery conversations about a burger business operating from a van at events and festivals a reality.
“We didn’t have any responsibilities and we didn’t have anything to lose,” Eeles recalls. “We carried on working full time and it was like a hobby, really.”
The way that they tell it, it’s hard to imagine how such a seemingly casual beginning running what was then called the Honest Eating Co could give rise to today’s rapidly growing operation. But the pair understood early on that high standards were key. “We spent a year figuring out what we care about: quality, keeping it simple and offering good value,” says Eeles.
Barton adds: “We started with our hearts on our sleeves. We wanted to make the best burger we could and we thought homemade food was a way to make ourselves stand out.”
Those principles hold true today, with Honest Burgers making burgers from its own dedicated butchery and serving them with its own chips, made in-house (see panels overleaf).
The festival queues formed quickly. There was just one problem: they weren’t making any money. And it may have carried on that way, had Eeles and Barton not met Dorian Waite, a former senior operations manager at Strada and former operations director for Bill’s restaurants. The trio were introduced through a mutual friend and, before long, Eeles and Barton found themselves cooking burgers in Waite’s back garden.
“We instantly got on well and everything they stood for made a lot of sense to me,” says Waite. “It was refreshing to see people who believed in that old-fashioned style of service and quality, and the brand name was very powerful.”
After a few more conversations, the trio decided to throw their lot in together, each investing £2,500 to take a site in Brixton Village.
In addition to his operational experience, Waite also brought financial rigour to the business. “It was a very useful time for us to understand the value of money and where to invest it wisely,” he says. “I remember Tom trying to spend £100 on a bin and Dorian going apeshit,” chips in Eeles. Waite also drafted in seasoned operator Harald Samúelsson, former joint managing director of Côte, as a director, who has acted as a mentor to the young co-founders.
Despite the odd dispute over waste disposal, everything came together quickly for the Brixton opening in 2011. “I knew after just two or three weeks that we had something very special,” recalls Waite. “Phil took over the operations and he is the most naturally talented operator I have ever met. We found our roles in the business nicely and we trusted each other.”
The critics were impressed. The Observer’s critic Jay Rayner described Honest’s homemade rosemary salted chips as “the edible equivalent of crystal meth”. “You could have had a £1m PR budget and you wouldn’t have got the coverage we got from a little shoebox in Brixton,” says Barton.
“We deserved it, but at the same time you had to be in the right place at the right time. Dorian knew burgers were about to go big. Me and Tom, down in Brighton, didn’t know that this big London burger boom was about to happen. We had something, but we didn’t have the full picture and, when Dorian joined, it completed the set,” adds Eeles.
Waite wasn’t content to stop at Brixton. He soon found a site in ultra-competitive Soho on Meard Street. “That was the real turning point,” says Eeles. “As fun and successful as Brixton was, when we did exactly the same thing in Soho, we thought ‘holy shit, we could do a few of these now’. People thought we would put our prices up and increase the menu, but we didn’t.”
Rents and returns
The emphasis on quality and honest pricing established by Barton and Eeles, combined with the operational nous brought to the business by Waite, has led to rapid expansion, helped by the fact it has been profitable from the beginning.
“We self-funded the business for a long time. We didn’t have any debt,” says Waite. “We were opening restaurants with our own cashflow, so we were in control.”
The company has been backed by private equity firm Active Partners since 2015, when it took a 50% stake in exchange for a £7m investment. More recently, Honest secured a £17m refinancing package from Santander, amid plans to grow to 50 sites by 2020. Having initially expanded in London, it has recently launched outposts in Brighton, Bristol, Cambridge, Manchester and Reading.
Smart decisions on property have been key to the business model, Waite explains: “We never thought we would see £50,000-a-week sales when we started. But we have 33 sites and last year we did £31m in sales. The restaurants make a lot of money on £16,000-£18,000 a week. We can come in on cheap rents, make a good profit margin and good cash returns, so we don’t have to go taking big risks on property, which a lot of people have obviously done.”
Being a much larger business now has allowed the trio to concentrate on the areas they are best at, with Barton focused on the menu and the specials; Eeles with a passion for developing the business culture and nurturing people; while Waite oversees the operational aspects.
On Waite’s to-do list, as Active Partners reaches the end of its five-year investment cycle, will be finding a new partner to back Honest. “We are interested in working with new people to take us to new heights,” he says. “We’d like to look at overseas expansion, different formats, and we would love to use our philosophies and the structure that we have built to do other things.”
Do they see themselves as being able to ride out the choppy waters that have caused some of their competitors to struggle? And do they worry that maintaining quality will get harder as the business gets bigger?
“Taking control of the supply chain by running our own butchery is a huge advantage,” says Waite. “We have never over-stretched ourselves. Lots of people are struggling, but we have a pretty recession-proof business.”
For his part, Eeles’ ambitions have moved way beyond having a few beers and cooking burgers at a festival. “We are going to be the best brand out there,” he proclaims. “We are not stopping until we are known for being amazing everywhere – not just for burgers, but for the Honest brand and what it stands for. That’s what motivates me.”
Honest Burgers on…
…the eat-at-home market
Philip Eeles: “Delivery is a bit like a drug – if you get hooked on it, you can be in a tricky situation. We decided we would control it and not fully embrace it.”
Dorian Waite: “Alongside the growing eat-at-home market, we have grown our bums on seats. To be 3% up on restaurant covers in this market is crazy, but people still want to come and eat burgers. We are a cheap, great quality, once-a-week treat.”
Dorian Waite: “Sometimes it is about what you are not looking for, rather than what you are looking for. In Manchester, the temptation was to go into Spinningfields, where there are lots of offices but you end up in glass-box chain hell. Instead, we are two streets over. It has more character and we are close to some cooler indie brands.”
Philip Eeles: “I have a huge amount of respect for people who do events as a career. Life gets so much easier when you have four walls and fixed costs. Anyone who wants to make a lot of money out of street food has to work 14 hours a day, seven days a week.”
Taking control of the supply chain
In December 2017, Honest Burgers established its own £600,000 butchery in Sutton, Surrey, where its prep kitchen is also based.
“We weren’t getting what we wanted from our suppliers in terms of cuts and the fat quantities,” Waite explains.
The burgers are made from 100% chuck and rib cap steaks, which are chopped to steak tartare consistency and then shaped into patties. This, rather than mincing the meat, offers a better combination of texture and fat content, according to Barton – who appears to be the beef geek of the trio.
Despite the investment and administrative headaches, they consider launching the butchery a particularly important move given that 80% of the burgers the business serves are cooked medium or medium-rare and therefore have to come from a source that meets regulations on less-than-thoroughly-cooked meat (LTTC). Having their own butchery means they have full traceability and they don’t have to worry about a supplier unexpectedly losing their accreditation.
“We like the idea that if we are shit, it is our own fault,” adds Eeles. “Now we can say for certain that if our burger is a bit too dry then it is because we fucked something up and we can get straight to the nub of it.”
Cheeseburger toastie Mustard-fried beef patty, pickles, American cheese with a Cheddar and Gruyère toastie, beef and bacon gravy (£9.50)
The full English Yorkshire smoked bacon, breakfast sausage, garlic mushrooms, free-range fried egg, Honest beans, cheesy bubble and squeak, buttered toasted sourdough (£10)
Avocado Brindisa chorizo, guacamole and fried egg on sourdough (£6.50)
Honest burger A beef burger with red onion relish, smoked bacon, Cheddar, lettuce and pickles (£11.50)
Chicken A chicken burger with free-range chicken breast, lettuce, tomato and mustard mayonnaise with rosemary salted chips (£10.50)
Plant A vegan burger from Beyond Meat with vegan smoked gouda, Rubies in the Rubble chipotle ‘mayo’, mustard, red onion, pickles and lettuce (£13.50)
All burgers are served with rosemary salted chips
The chip ‘nightmare’
Surprisingly, for a business of its size, Honest Burgers still makes all its own chips. It takes more than eight hours every day.
Both Eeles and Waite describe the process as a “nightmare” and Eeles recalls the time Byron founder Tom Byng visited Brixton in the early days and tried to dissuade them from doing it.
“He was really nice, but he told us there was no way we would be able to keep making our own chips. But people love our chips almost as much as the burgers, so that was enough incentive for us to keep trying,” says Eeles.
The problem, however, is that potatoes are not a consistent product. Varieties change with the seasons and supply is affected by factors like drought. The founders have to constantly monitor the sugar and water content, as anything above 3% sugar is too much to make crispy chips.
So frustrated were they by the lack of consistency and the sense that they could do better that Barton tracked down a biologist who works for Walker’s crisps and quizzed him on the finer points of potato science.
It has resulted in them finding a farmer in Kent who has the level of knowledge required to help keep the quality of Honest’s chips high. “The safety of a frozen chip is exactly that – it is safe,” says Eeles. “Whereas with homemade food it is a little more difficult. But it is totally worth it.”