Costly beef steers chefs to cheaper cuts, but most diners don't balk at higher prices

Nation's Restaurant News, Dec 8, 2003 by Bret Thorn

On a recent Friday night at Sbicca, a restaurant in Del Mar Calif., chef-owner Susan Sbicca offered a grilled, 12-ounce Wagyu beef strip steak with asparagus, Cabernet-red onion demi-glace sauce and Gorgonzola sauce for $42.

"We blew out of it," said Sbicca, who sold 20 orders in her 140-seat restaurant.

Apart from that imported-from-New Zealand steak, Sbicca's most expensive menu item is an American filet of beef, whose price she was forced to raise recently to $28 from $26. "I really have not seen a decrease in sales," said Sbicca, who also owns the restaurant Meritage in Encinitas, Calif.

With beef prices near record highs and profit margins on red-meat dishes shrinking to loss-leader proportions, restaurant operators are working on strategies to keep both their customers and investors happy. Many report raising prices has worked best, but others acknowledge that the strategic marketing of cheaper beef cuts and higher-margin alternatives also is a vital tactic.

Sell more pork," is the stated imperative of one beef-cost-challenged Chicago chef, John Manion, who expressed frustration with his "losing battle" to offset the commodity inflation despite such economies as butchering his own primal cuts of beef.

At Peninsula Grill in Charleston, S.C., chef Robert Carter has raised beef prices by 25 percent and placed an asterisk by those items, indicating that the increase is due to the rise in costs.

"And beef sales have, if anything, increased," he said.

For banquets Carter added a $6-per-person surcharge for menus containing beef. But in the first seven weeks after the policy was implemented only one party opted to exclude beef from its menu, he said.

Even a 25-percent hike in a menu price does not offset the skyrocketing price of beef, especially Prime beef, which suppliers report is up nearly 40 percent, compared with the price five years ago.

"If it were up to me, I'd take beef off my menu," Carter said. "But I don't write my menu for me. I write it for my customers."

Alison Barshak, chef at Alison at Blue Bell, a mostly seafood restaurant in Philadelphia's suburb of Blue Bell, took her rib-eye off the menu and tried replacing it with a lamb dish. "And people kind of started saying, 'We want beef' very loudly," she said.

So she put a 10-ounce rib-eye back on the menu for $28. But with other entree prices ranging from $16.50 for risotto to $25 for crab cakes, she thought the steak "skewed people's perspective of what the menu is."

So two months ago she swapped the rib-eye for a 10-ounce hanger steak for $23. "The customers love the flavor," she said, "but it's an unfamiliar cut," so her servers have had to describe it for diners.

At Thyme restaurant in Chicago, chef John Bubala said a description of a cheaper meat wouldn't do for his customers, who didn't like the texture of secondary cuts, such as hanger or flank steak, regardless of the price.

Instead, to appease diners who might not want to pay $32 for his 12-ounce tenderloin tail, he offers a smaller portion, an 8- to 9-ounce sliced tenderloin tail for around $24. "I've had nothing but phenomenal response," he said.

"I'd rather put quality on the plate and have people complain about the price than have them like the price, but when [the steak] comes to the table, it's not what they're expecting."

At Mas, a Latin-theme restaurant also in Chicago, John Manion buys primal beef cuts and butchers them himself, which he says helps cut the cost.

The chef said he plans to raise the price of his New York strip by $1, to $28 from $27, if prices don't come down after the holidays.

"I'm making less and less on it, but we are at the end of the day a neighborhood restaurant.... If I have to take a hit right now, I'm going to take that hit."

It helps, he adds, that he sells more pork and seafood than he does beef. Pork tenderloins alone can account for as much as 25 percent of sales, he explained.

Also in Chicago, chef Dean Zanella of 312 Chicago, where steaks account for about 30 percent of total sales, tried switching from Choice-grade meat to lower-quality Select. "I served 20 one night and had one complaint," he said. "That's 5 percent complaining." He reasoned that if he received one vocal complaint, other customers also didn't like the meat but wouldn't say anything. With his Choice meat, by contrast, "all I got was raves."

So he took a survey of neighboring restaurants and realized that they had raised their prices. He followed suit and bumped the price of his filet to $28 from $24 and that of his rib-eye to $29 from $25.

"And I haven't seen a bit of drop-off in my sales, and not one customer has said anything," Zanella said.

Alternative cuts have worked at some restaurants, though.

Glenn Harris, chef-owner of Jane restaurant in New York City, started seeking alternatives even to hanger steak as prices for that cut starting going up. He started using both the flat-iron, or top blade of the chuck, and the neighboring shoulder tender.

"They're awesome; they're tender," he said. "They're very juicy, they're lean, very flavorful and inexpensive," he added, praising the shoulder tender. "It's like a sirloin that looks like a filet mignon."