Reporter's Notebook
How beef costs hit one small chain

How beef costs hit one small chain

When Joanie Corneil and a partner started Square 1 Burgers and Bar in Tampa in 2008, the restaurant paid $1.89 to $1.94 a pound for the Angus beef used in its burgers.

“Last year at this time, we were paying $4.11 a pound,” Corneil said. That’s more than double the cost in just about six years — a big deal to a burger-centric concept like hers'.

The price of ground beef, and other beef cuts, has been a problem for years. Drought forced ranchers to cut herds, limiting supply and driving up costs. For smaller operators, those cost increases have been dramatic. And while conditions have improved and ranchers are building herds, it’ll take some time for it to impact costs.

That has led to increased prices and decreased profits in many cases, though some concepts have cut back on portion sizes. Some have even switched to cheaper cuts of meat.

For Square 1, reduced portions or cheaper costs are out of the question. Corneil seemed almost offended when I asked if she’d ever consider such options. “I would never do that,” said Corneil, whose chain has since grown to eight locations, with two more on the way. “That’s not our concept. Our concept is to serve the very best.”

But she did say that, “We run higher food costs than I would prefer,” and she said that the company has had to be extra careful about waste and food controls. “I pride myself on our management team,” she said. “They are really good at that.”

Price increases have also been part of the equation, but not always: Last year she decided she wasn’t happy with her chain’s six-ounce burger so she increased it by one ounce without increasing prices.

“I know that’s backwards,” she said. “But I want that good perception from the customer.”

The good news is that experts believe beef costs to finally ease next year. Corneil has already seen that — she’s currently paying $3.74 a pound for beef. That’s lower, though still double her costs from seven years ago.

That said, it’s nothing compared with the pressure Corneil sees in the ostrich market. Square 1 every weekend will sell specialty burgers made from a different source, like crab, gator, elk or even ostrich.

She initially had ostrich on her first restaurant’s regular menu, but took it off when supply problems drove its cost to $27 a pound at one point. That would be an expensive burger at 33 percent food cost.

“No one is going to come in and buy a burger for what you’re going to have to charge for that,” Corneil said.

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