At Stake, The Entire Company
After toughing out several lean years, The Steak Specialists capitalizes on America's renewed romance with steak
by Ken Krizner, senior editor
At the time, it seemed like a good idea. In 1978, meat and foodservice veteran C. Barry Prusin foresaw the trend of chain restaurants slowly taking root throughout the country.
For seven years, Prusin was president of Miami-based Knickerbocker Meats. The company cut plenty of USDA Choice steaks and was a full-line meat purveyor, handling many allied center-of-the-plate protein dishes.
But in 1978, mid-scale steak houses, such as TGIFriday's and Steak & Ale, began growing in popularity. Chain restaurants began sprouting up across the landscape.
"I saw the potential to market pre-cut steaks to chain restaurants on a volume basis," Prusin points out. "By focusing and specializing in USDA Choice steaks, I knew we could produce a consistent, uniform, quality product."
Prusin resigned from Knickerbocker Meats and opened The Steak Specialists Inc., a company that does exactly what the name implies-specialize in steaks.
The privately-owned company employs 80 people in one facility that combines the plant and offices in Atlanta.
The company has no warehouses, does not distribute products itself, and has a minimal sales staff. Nor does it produce any allied items.
"The concept behind The Steak Specialists was to concentrate on steaks," says Prusin, president of the company. "We have grown and prospered because we have continued to maintain that focus."
Right idea, wrong time
Shortly after Prusin embarked on this brave, new venture, something not-so-wonderful happened. Egged on by health and dietary concerns in the early 1980s, per capita beef consumption decreased.
Steak houses were not immune to the consequences. Fewer were opening, and restaurant menus de-emphasized steaks throughout the decade.
The Steak Specialists customers, including Marriott and Hilton hotel chains, were purchasing less beef for their catering and banquet units.
"What did I think?" Prusin asked in reference to the obvious question about opening a steak business during a downward trend in beef consumption. "I thought I picked the wrong time to get into the steak business. It was an extremely difficult time."
In order to increase sales, The Steak Specialists went after as many new customers as possible, not relying on its existing base.
As the decade drew to a close, the trend began to turn around. Casual-theme steak houses began to emerge; restaurants began re-emphasizing steak on its menus.
"Per capita beef consumption was still decreasing, but just at the retail level," Prusin says. "In foodservice, beef consumption was beginning to rise."
Today, steak is one of the most popular items on restaurant menus. And The Steak Specialists is reaping the rewards of its patience. Today, the company sells steaks to Ruby Tuesday, Olive Garden, Red Lobster and Waffle House chain restaurants, as well as to Delta Air Lines and American Airlines.
The company offers USDA Choice and Select T-bone, sirloin and Porterhouse steaks, as well as middle meats-loin and rib.
In 1994, it doubled the size of its processing area and now produces 20,000 pounds of solid muscle steaks a day with the potential to increase that capacity.
The Steak Specialists is very exacting about its product. While it cannot control the diet of the cattle prior to slaughter, it restricts the area of the country where it buys beef, purchasing product from IBP inc., Excel Corp. and Monfort Inc.
"We are particular about our product coming from certain areas of the country, the Midwest and near West," Prusin notes. "There are certain slaughterhouses we have dealt with over the years. We have confidence in their trim and packaging. We also have as much assurance as possible that the beef is corn-fed."
The quality standards continue once the beef arrives at the plant. Its temperature is taken before the product is unloaded from the trucks, and is continually checked in coolers and freezers. During processing, a quality assurance employee stands at the end of each cutting line, weighing the steak and examining the trim.
A metal detection system at the end of each line inspects every package, and spot tests are done each day by The Steak Specialists' in-house microbiological laboratory. The company recently implemented a Hazard Analysis and Critical Control Point program.
"The most important part [of HACCP] is that each employee becomes a quality control monitor," notes April Staebell, quality assurance manager. "Every employee looks for sanitation problems. It adds responsibility down to the last employee. If one employee slips up, the HACCP program may fail to find a potential problem."
Prusin adds: "HACCP is involved and it is time consuming, but it is worthwhile. It all ties in with sanitation and quality control."
The Steak Specialists is slightly ahead of USDA's curve for mandatory HACCP. It wants the strictest-possible controls on sanitation and quality because its customers demand that.
This led the company to voluntarily seek certification by the American Institute of Baking, an organization that rates the sanitation of food processors.
AIB is considered to have the highest standards of sanitation in the food industry, and many foodservice companies will not deal with a supplier that is not AIB-certified. The Steak Specialists received an "excellent" rating from AIB last year.
Growth, yet saturation
Prusin sees no slowdown in the popularity of casual-theme steak houses. That's because the category is expanding to rural sections of the nation, introducing itself to new customers.
"New steak houses are emerging and steaks are constantly being added to restaurant menus," Prusin says.
The popularity of steak is growing, particularly at casual and upscale steak establishments.
"When Americans are in the mood for steak, they choose restaurants that specialize in steaks, rather than establishments with more diverse menus," points out Herman Cain, CEO of the National Restaurant Association.
For example, the number of steak orders at casual-dining restaurants, excluding steak houses, dipped 1 percent in 1993, while steak orders at casual steak houses increased 19 percent, according to NRA figures.
Prusin is cautious. He believes casual, moderately priced steak houses are nearing their saturation point.
"It is a hyper-competitive market," Prusin cautions. "While I believe steak and beef will remain popular, the field of steak house restaurants is very crowded right now.
"There is also over-capacity in the production end of the [beef] industry, so it very competitive at both ends," he adds. "We must remain a low-cost producer with more value-added items to present to our customers today and customers in the future."
To stay ahead, The Steak Specialists has begun adding value-added, pre-marinated products to its roster, including fajitas and stir-fry steak.
The company has also hired a full-time R&D employee and will soon enter the pre-cooked, USDA Choice steak market, both at foodservice and retail. It has also begun selling a pre-searing, microwaveable steak for both foodservice and retail markets.
The Steak Specialists will soon offer two new frozen products for the retail market-USDA Choice sirloin steak, preseasoned with various marinades; and commercial steaks, such as ribeye, strip and T-bone, in small packages.
"Over the past three years, we have put an awful lot of money back into the company," Prusin points out. "We've expanded the plant, upgraded sanitation and production efficiency, and introduced new products to the marketplace. Restaurant operators are constantly looking for new and original items to introduce to their customers. That is the role we have to play."
By playing that role, Prusin will ensure that the decision he made 17 years ago was a good one.