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Beef prices take their toll

Figures from the U.S. Department of Agriculture confirm the pain: beef prices dug an 11% deeper hole in operators' pockets in 2004 than they did a year ago.  A combination of cyclically tight cattle supplies, a ban on Canadian imports, and the boom in high protein diets has pushed the price of steak and burger meat to record highs. And economists predict the upward spiral will continue into 2005. "There won't be as huge an increase," says Jim Robb, director of the Livestock Marketing Information Center, "but it looks like cattle prices will average 2%-5% above 2004." Even if prices stabilize with more cattle coming into the market, another Mad Cow scare could inflict fresh wounds.

With beef demand in restaurants also at all-time highs, operators must continue to scramble to make their margins. Some have already raised menu prices, while others have skimped on portions or eliminated the more expensive cuts altogether—all of which can turn off loyal and potential patrons. Larry London, director of F&B at the Heidel House Resort in Green Lake, WI, came up with a more creative—and customer-friendly—solution.

London knows his Midwestern patrons aren't happy unless there's a choice of beef on the menu, but even with entree prices at $23-$27, he was losing money on his signature steaks and prime rib. While he couldn't take these off the menu at Grey Rock, his fine-dining venue, he began playing around with proteins that would balance beef prices and keep his food costs averaging 32%. He found a lot to like in pork—and so did his customers.

While London always offered a pork tenderloin or rack on his menu, he started experimenting with some of the lesser-known and less expensive cuts like shanks, belly, and cheeks ($5-$7/lb. wholesale). He embellished these peasant cuts with classy touches to mesh with his upscale menu and boost their perceived value. The pork belly was stuffed with dates and cardamom; the pork cheeks, cooked in port wine and served over risotto with guanciale (cured jowl); and the pork shank, braised Osso-Buco style.

"I created dishes that take a bit of time and attention, and show off the skill of the kitchen. These added-value preparations allow me to charge $17-$19 for the pork items," London explains, adding that he tries to keep non-beef entrees under $20 to stay competitive in his location.

Customer response has been very positive. "People eat a lot of pork at home, but it traditionally trails way behind beef in restaurants," London says. By giving diners chef-driven preparations they can't replicate in their own kitchens, they feel like they're getting as much bang for their buck as they would with a prime steak.

Education—both of servers and guests —has also put a positive spin on pork. To enlighten customers about its appeal and versatility, London staged a barbecue last Memorial Day weekend on the patio at Heidel House. Guests sampled some of the most mouthwatering parts of the pig, smoked and grilled in the barbecue styles of Memphis, Texas, and the Carolinas. While the pulled pork, sausages, and ribs didn't make it on to London's fine-dining menu, they did turn Midwesterners on to pork's possibilities in a restaurant setting.

Next, he worked on his servers, familiarizing them with different cuts at staff meals. "If you can't get them to wrap their brains around pork cheeks or belly, these items won't sell," London claims. It didn't take long for his servers to embrace the dishes. Along with their taste, the $17-$19 price point helped win them over. Says London, "servers like to push higher-cost items."

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