High Steaks
Every chef worth his stars is opening a steakhouse. What do these big guns have to offer that traditional steak joints lack, and how do they make money doing it?
Michael Whiteman reports.
Let's blame it on Jean-Georges. Or David Burke and Alan Stillman. They're responsible for today's tsunami of newfangled chef-run steakhouses that are popping up all over the country.
Prime opened in 1998 at Bellagio in Las Vegas, resembling a lush romantic French restaurant into which Jean-Georges Vongerichten inserted a modernized steakhouse menu with an array of house-made sauces that, at the time, broke new ground. Maloney & Porcelli, opened in 1996 in New York City, was the reverse: it looked like a steakhouse but served lots of Burke's manic non-steak dishes—monkfish with monkfish liver, skinny pizzas delivered on the sides of wooden wine crates, and the much-imitated crackling pork shank with a Mason jar of firecracker applesauce on the side.
In their wake today are: Bobby Flay, who's opened Bobby Flay Steak at the Borgata in Atlantic City; David Burke and Stephen Hanson's Primehouse at the James Hotel in Chicago; Jacky Pluton, who closed his eponymous French restaurant in Chicago and now is "concept chef" at Narra, called a designer steakhouse, at the Hotel Orrington in Evanston; and Tom Colicchio, who opened Craftsteak in Las Vegas and New York City, the latter a subject of considerable controversy.
Out in Napa Valley, Leslie Rudd, who owns Rudd Vineyards; Pat Roney, who owns Girard wines; and Reuben Katz, an executive at The Culinary Institute of America in St. Helena, built the ravishingly beautiful Press, specializing in steaks and local wines. Wolfgang Puck has opened a big deal beefery in Beverly Hills called Cut that replaces the Beverly Wilshire's fine dining room.
In addition, Michael Mina at press time was opening Strip Steak at Mandalay Bay in Las Vegas—adjacent to Charlie Palmer Steak in the Four Seasons Hotel; Rick Tramonto and Gale Gand recently opened Tramonto's Steak & Seafood at the Westin in Wheeling, Illinois, among their other food outlets there; Jeffrey Chodorow has finally thrown in the towel at Mix in New York and is converting it to Kobe Club; Bradley Ogden cut Lark Creek Steak's ribbons on the fourth floor of a tony shopping complex in San Francisco; and Stillman earlier this year opened Quality Meats in New York City, whose eye-popping design (but not menu) will morph into a chain of lower priced steakhouses called Wollensky's Grill.
What's going on here? Doesn't anyone listen to cardiologists any more? Is there no limit to America's appetite for beef?
Here's a canny bit of analysis that pretty well answers that last question. During any cool weather month, try searching OpenTable.com and you'll find that, nationally, about one-third of the top 10 most requested restaurant reservations are for upscale steakhouses. Of course this isn't true across the board: during some weeks, no steakhouses make it to the top 10 in San Francisco, but seven do in Miami, six in Houston, five in Chicago, and four or five in Los Angeles.
Behind this consumer demand is a new level of connoisseurship associated with what used to be a mundane product. With marketing emphasis on different breeds and new cuts—and with the very public controversy of corn-fed versus grass-fed, feedlot versus pasture, the effects of wet-aging versus dry-aging—consumers are more aware of the nuances and hence are happily engaged in palate-testing experimentation. Today, a meat's pedigree complements the heirloomness of a tomato and the genetic disposition of a corn cob.
It looks like Dr. Atkin's final triumph! But why are brand name chefs going into competition with such big bulls as Ruth's Chris, Morton's, and The Capital Grille?
"Five years ago, most chefs looked down on steakhouses. The business was beneath them," says Burke. "Now they're sensing the potential—even surf-and-turf is no longer off-limits. When they add their stars to these concepts, maybe they can outperform the big chains." Maybe is an important word that we'll discuss shortly in some detail.
"This is something you don't have to explain," according to Flay. "It's a taste that's easy to crave." He's right; after all, when was the last time you had a hankering for noodle pudding? "Steakhouses allow chefs to escape the composed food they've become known for," says Mina. "New steakhouses are product-driven—it's not just about the steak anymore—it's about grandma's tomatoes and specialty vegetables."
Now this all sounds lovely, but examining the menus of these chef-driven ventures reveals an interesting strategy: Almost everyone's taken a sledgehammer to the economic bedrock of a standard chain steakhouse, which used to be: keep it simple, keep it standardized, and keep costly skilled hands out of the kitchen.
These upstart chefs clearly believe that "gastronomy" differentiates them from the big chains. Their menus leap beyond grill-it-and-garnish-it methodology, and they're slotting actual chefs and sous chefs into positions traditionally occupied by kitchen managers and upgraded broiler cooks—adding big bucks to typical steakhouse payrolls.
Laurent Tourondel, who operates BLT Steak and BLT Prime in New York City, starts your meal with warm cheese popovers. He's always got five fish options. A giant blackboard makes room for constant market-based changes as opposed to the static menus of most chains. He pays enormous attention to presentation. At BLT Prime there's $60,000 worth of meat in the glass box dry-aging room. Tourondel believes these efforts contribute to his nearly two table turns nightly, allowing him to afford his payroll.
Flay maintains that he's "tweaking, not overturning, the steakhouse concept" by overlaying onto basic proteins the bold, mostly Southwest flavors he's become known for. Nevertheless, he too has a chef in the kitchen, a razzle-dazzle array of go-withs, and mise en place that probably would distress the late Ruth Fertel greatly.Tramonto is banking on top products but also is ramping up his presentations.
Michael Dellar, Ogden's longtime partner, describes Lark Creek Steak as part of the "continuing evolution of the American steakhouse." He points to ambitious side orders that reflect his company's farm-to-table ethos, which he calls a new emphasis on the "supporting cast."As a result, menus from these chef-driven steakhouses are long on seduction and complexity. Consider these items, taken at random from some of high-profile units: lamb rillettes with celery rémoulade. Wild striped bass with braised salsify sofrito. Pan-seared Pacific salmon with caramelized fennel and mussel ragoût. Sautéed snapper with mushroom dumplings and ginger broth. Loup de mer with cauliflower puree and raisin/caper/pine nut sauce. Flatiron steak with blackberries. Buttered edamame with mint sauce. Corn crème brûlée. Pear salad with arugula, prosciutto, and eiswein vinegar. Spinach and pea shoots with garlic and chiles. Warm tongue with artichokes and white beans.
This is steakhouse cookery? Now consider the efforts involved in these new restaurants: Primehouse owns a prize bull whose copious semen presumably begets high quality progeny for its butchers. One wall of Burke's aging room is lined with more than half a ton of Himalayan salt that, he says, slows the growth of mold while allowing meats' interiors to age. Salt, he maintains, also permeates the meat, adding to its umami. That said, about 25 percent of his guests order "chef food" as opposed to simple grills.
Mina has a bank of controlled temperature vats filled, individually, with melted butter, bacon fat, olive oil, mustard oil, etc. In these, steaks, ribs, and lamb are slow poached—confited, to be more accurate—for about an hour for steaks and four to five hours for whole primal cuts, until they're just south of rare. These are finished to order over a combination of oak and mesquite.
At Craftsteak in New York City Colicchio ages strip steaks in seven-day increments from 28 days to 56 days, with the price rising by $6 a week. Unfortunately, his initial method of cooking beef on griddle tops and then finishing them in the oven got beaten up severely by critics. "I was trying to avoid the typical bitter overcharred 'steakhouse' steak, but the griddles couldn't get hot enough," he says, so he's yanked them out and changed course. Now he grills the bone-in steaks and pan-roasts the boneless cuts, which are finished back on the stove top with a knob of butter.
(All this should disabuse you of the classic notion that anyone can grill a steak. "It looks so easy," opines Stillman, "but there's no hiding cooking flaws or mediocre meat under sauces and other froufrou. You're out there naked.")
Craig Koketsu, chef at Quality Meats, has a charcuterie bar opposite the liquor bar. Colicchio and Flay have raw bars near the entrance. Puck has an on-display hors d'oeuvres kitchen at the front door.
Flay makes a big deal of high-priced surf-and-turf main courses, cooking an entire lobster for every order, plating the tail and reserving the rest for pricey but essentially costless offerings: lobster/filet mignon skewers and lobster/crispy squid salad as apps. Simple stuff—if you have skilled hands on the premises. Quality Meats makes its steak sauce tableside. Press carves its burnished chicken for two tableside.
Puck offers 21 day aged Illinois corn-fed beef and 35 day aged Nebraska, along with both American Wagyu and Japanese (the latter at $120 for six ounces, and $40 more for each two-ounce increment). Puck's menu includes: Kobe beef short ribs with braised oxtails and sweetbreads, pan-roasted lobster with Thai butter or truffle sabayon, and Dover sole and turbot for two. Tramonto is spinning the classics: sautéed spinach with lemon, goat cheese slipped into scalloped potatoes, waffle batter enrobing onion rings "so they look like savory Krispy Kreme doughnuts."
As chefs play gastronomic one-upmanship, they're also emphatically rejecting the old-fashioned bordello-Victorian-hypermasculine dark wood-and-leather steakhouse design formula. Puck's audaciously modernist restaurant in the Beverly Wilshire, designed by Richard Meier, looks like a nose-thumbing gesture at the hotel's dripping opulence. "Our brief," says Michael Paladino, Meier's longtime partner, "was to design a place that didn't resemble Wolfgang's prior restaurants." If anything, this is an anti-steakhouse. Puck recalls an octogenarian who, upon seeing Meier's replacement for the hotel's traditional dining room, inquired: "When are you going to finish the place?" "That's when I knew we were on target to get a younger, hipper crowd," says Puck.
Mina's Strip Steak was the work of Super Potato, a Japanese avant-garde design firm. David Rockwell did Flay's place in Atlantic City as a study in warmth and texture. AvroKO, a recently hot New York City design firm, aimed Quality Meats at a younger, looser audience than the suits on expense accounts typically found in steakhouses; it has an industrial-cum-butcher shop decor that brings lots of smiles and is said to be more female-friendly.
Development costs are ferocious—between $800 and $1,000 per square foot—so let us now return to the economics of these newfangled chef-driven steakeries. In addition to the philosophical reasons that multistarred chefs profess for treading into the pastures of Ruth's Chris, Morton's, The Palm, and Capital Grille, there's one unstated factor: Money. Lots of money. Ogden didn't exactly wake up with an unstoppable urge to own a small steakhouse on the fourth floor of a shopping center. It's not likely that Puck beat down the doors of the Beverly Wilshire or that Tourondel longs to commute to Puerto Rico, where he's opening a BLT Steak at The Ritz-Carlton San Juan hotel. In truth, hotels, casinos, and mall developers are showering money, big-time, to latch onto high-profile brands—especially in casinos where steakhouses generally are the top grossers.
So these brand name chefs have little or no going-in costs, low risk, lots of upside, and often hefty management fees.
But even with large tenant allowances, new operators can't be utterly sanguine about the specter of negative cash flow. Classic steakhouse economics are based on food costs of around 40 percent and labor around 20 percent—and beyond 60 percent combined you cross a threshold of severe pain. But insert a few highly paid chefs and the cost of labor can erupt, often with no reduction in the cost of food. In fact, sometimes more labor means more food cost.
Many of these new steakeries are amazed at the quantity of side orders and desserts they're selling, which they attribute to their chefs' creations.
But some are also discovering that's where their operating profit lies—akin to movie theaters only making money on popcorn, which is not the best business model for a restaurant. They believe they're controlling food costs by selling less economically painful apps than standard shrimp and crab cocktails, using trims for brochettes and merchandising charcuterie and salads that might come in at 20 percent. Dellar thinks that with proper pricing, the 40/20 food and labor breakdown might end up at 30/30.
Booze, of course, is a savior. Puck says his bar is half the size of his restaurant. Tramonto—undoubtedly a beneficiary of Starwood's cash—has a separate lounge offering cocktails, crudo, and seviches. Vongerichten acknowledges a five-to-six-point cost increment for steakhouses but notes that alcohol helps cover the spread. Hundred dollar bottles of Cabernet are big movers in these restaurants along with oversize Martinis.
Nevertheless, most newcomers who have ramped up their gastronomy are, as of this writing, very much works in progress—several of them seeking to wring seven to 10 points out of the system without sacrificing the chef-quality cooking that theoretically gives them distinction. Meanwhile, they're all hoping that volume will justify their talented kitchen staffs.
One chain steakhouse executive points to highly refined standards of operations, purchasing, and management within his company and wonders how many fresh-faced competitors will be around in five years—or still calling themselves steakhouses. As an example, he cites V Steakhouse in New York City's Time Warner Center—a quirky non-steak design package and a menu spinning culinary cartwheels—that struck some reviewers as beyond beyond. It closed, tenant allowance or not.
Michael Lomonaco, formerly of Guastavino's, Noche, and Windows on the World, has just opened Porter House New York in V's space, designed by Jeffery Beers, with Wayne Harley Brachman at the dessert station. Since the developer is his partner, we're probably looking again at large landlord contributions. The focus will be on porterhouse cuts of beef, pork, veal, and lamb (without the usual stick of butter melted into the meat), prime, dry-aged corn-fed beef, and native seafood—including freshwater pike, whitefish, and trout. He calls it an "American grill."
What's next? There's lots more happening:
Two new steakhouses are opening within shouting distance of Craftsteak in New York City, one of them an import from Florida.
Charlie Palmer in mid-2007 will open a new concept expanding on his "steakhouse philosophy" at The Joule hotel in Dallas, reflecting the way he thinks people want to eat these days.
Acknowledging that few cities that can support a 15,000- to 20,000-square-foot Smith & Wollensky, Stillman is marrying Quality Meats' finger-snapping design with a menu targeted at the under $50 crowd. He wants to open 7,000-square-foot 175 seat Wollensky's Grills, cutting capital costs (after landlord contributions) from $6.8 million for a Smith & Wollensky to $2.5 million, about par with Morton's. How do you create a $45 steakhouse dinner (Morton's average check dinner check easily tops $90; BLT Prime's is nearly $95; Capital Grille in the low-$80s)? Less emphasis on New York strips. Smaller portions. More use of secondary cuts like flatirons, flaps and hangers. Hamburgers. Creative use of trims for luncheon food.
In addition to Puerto Rico, where the Ritz-Carlton presumably has footed much of the cost, Tourondel is late on arrival taking his BLT formula to Washington, D.C., and is eying Dallas and Los Angeles.
With Primehouse in the James hotel and Hanson eyeing New York, one might expect a Primehouse in the Big Apple as well, perhaps not far from Stillman's Quality Meats or Chodorow's new Kobe Club.
Gentlemen: draw your steak knives.
