Inkstone
    May
    01
    2018
    May
    01
    2018
    Shake Shack opens in Hong Kong, with China (and beef tariffs) on its mind
    Shake Shack opens in Hong Kong, with China (and beef tariffs) on its mind
    BUSINESS

    Shake Shack opens in Hong Kong, with China (and beef tariffs) on its mind

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    by
    Alan Wong
    Alan Wong
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    Tuesday is a public holiday in Hong Kong, and the morning sky was grey. A drizzle of rain had just begun to fall.

    That didn’t stop hundreds from lining up in the heart of Hong Kong’s business district for the opening of the city’s first Shake Shack.

    Long lines started forming outside Shake Shack’s first Hong Kong location hours before it opened Tuesday.
    Long lines started forming outside Shake Shack’s first Hong Kong location hours before it opened Tuesday. Photo: Alan Wong

    On the menu: the famed American burger joint’s signature fist-sized, no-frills cheeseburger, a Hong Kong-only special “milk tea shake” – and the smell of Chinese money.

    Like a great many American restaurants that have come before it, Shake Shack is hoping to use the more multicultural and cosmopolitan Hong Kong as a testing ground for Chinese tastes, before bigger launches in mainland China.

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    “We’re very excited. Next year we’re going to go to Shanghai and open, and I think Hong Kong is the gateway for that opportunity,” Randy Garutti, CEO of Shake Shack, told Inkstone.

    But the devil is in the patty.

    One country, two patties

    Garutti, speaking to Inkstone by the burger pick-up area on Tuesday, promised authenticity at its Hong Kong restaurant, which is run by local catering group and licensed partner Maxim’s.

    “I believe when you taste this burger today, you’ll taste the same burger as you do in New York,” he said. “We actually have American beef, no hormones, no antibiotics. Our bun is actually the same bun we use in the States.”

    The same can’t be said for sure about Shake Shack’s coming mainland locations.

    Late New York food writer and burger historian Josh Ozersky raved about Shake Shack as ‘the future of the hamburger.’
    Late New York food writer and burger historian Josh Ozersky raved about Shake Shack as ‘the future of the hamburger.’ Photo: Alan Wong

    Garutti said that because of the tariffs that China is threatening to impose on US beef last month, Shake Shacks in mainland China may not use imported US beef in their burgers.

    “That’s why next year our supply chain team is going to do a lot work,” he said. “We’re going to be aware of all the opportunities.”

    Hong Kong is a free-trading, semi-autonomous region of China that imposes no duties on imported goods beside a handful of commodities like tobacco and spirits: as such it’s not liable to impose China’s tariffs.

    Shake Shack plans to open 25 locations in Shanghai and elsewhere in east China by 2028.

    These "Shacks" could turn to Australian beef, which its locations in Japan already use and which Garutti said is just as good as US beef.

    The world’s largest Starbucks opened in Shanghai in December. The company has more than 3,000 locations in China, and plans to adds 2,000 more by 2021.
    The world’s largest Starbucks opened in Shanghai in December. The company has more than 3,000 locations in China, and plans to adds 2,000 more by 2021. Photo: AFP

    As China’s population has become increasingly wealthy, American brands from McDonald’s to Starbucks have proved big successes in the country.

    The pricier New York burger chain will test just how much premium Chinese eaters are willing to stomach, compared to cheaper options.

    In Shanghai, Shake Shack’s burger pricing will pit it against higher-end burger restaurants like The Butchers Club and Beef and Liberty. 

    “Future of the hamburger”

    Shake Shack has an almost mystical status even at home, and its beef patties have been the subject of gushing reviews.

    Late New York food writer and burger historian Josh Ozersky raved about it as “the future of the hamburger.”

    “Hamburgers are made of meat, and Shake Shack's is the best,” he wrote in 2015, a few days after the restaurant went public on the New York Stock Exchange.

    Thomas Chan, Shake Shack’s first customer in Hong Kong, waited in line since 7:30 in the morning.
    Thomas Chan, Shake Shack’s first customer in Hong Kong, waited in line since 7:30 in the morning. Photo: Alan Wong

    If its reception in Hong Kong was any indication, Shake Shack’s first effort in mainland China won’t disappoint.

    Thomas Chan, a retiree who had waited in line since 7:30 in the morning of the Labor Day holiday, was the first customer. 

    With a mouth full of burger and in between sips of his beer, Chan signaled satisfaction with a thumbs-up to curious onlookers waiting their turn.

    ALAN WONG
    ALAN WONG
    Alan is editor at Inkstone. He was previously a digital editor for The New York Times in Hong Kong.

    ALAN WONG
    ALAN WONG
    Alan is editor at Inkstone. He was previously a digital editor for The New York Times in Hong Kong.

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