[tonyb]

Looks like I'll end up having to pull brisket off the menu again this summer (I own & operate a BBQ food truck).

Before this latest blow to the supply chain I have already seen a 66% increase in brisket prices in the past 4 weeks ($2.99/lb about a month ago, current price is $4.99). The restaurant industry is already running on low margins so it will be interesting to see how this is all going to shake out.

[asdff]

You could put brisket at market price like lobster roll food trucks tend to do. People still happily pay $18 for a lobster roll from a truck.

[tonyb]

Raising prices is an option but that is very market dependant. BBQ customers in general are more price sensitive than lobster customers and I would lose sales at a higher price point.

There is a certain price (which I have generally found is $4.50 - $4.99/lb, that is when my food cost for a brisket sandwich hits 50%. Target food cost should be somewhere around 30%) where it just isn't worth it to sell brisket. BBQ is somewhat unique in that you have to estimate your demand ahead of time - you can't just throw on another brisket if you run out and I don't reheat/re-use leftovers. So even if I raise my prices $2/sandwich to cover the increased cost my risk is still higher because any unsold product is now a higher loss.

[jasonwatkinspdx]

I'm sure you know your business and market, but I'd just through out an example from my back yard.

Matt's BBQ is the best Texas style bbq in Portland by a considerable margin. I've been a customer and friendly with him since he started out in a pawn shop parking lot with zero foot traffic and almost no road visibility. He charges $13.50 for a 1/2 lb of brisket, similar prices for other meats. Sides are typically around $3.50.

He's up to multiple locations and his own commissary kitchen that's like 2000 sq feet.

He sells out every single day.

It's been really fun to watch his business blow up. It's all been from the strength of his product, and his personal hustle to get the momentum. His customer base is loyal and willing to pay a premium.

He even has a side hustle selling smoker rigs, via a partnership.

[jessriedel]

I'm enjoying this discussion and I'm glad you brought up your example, but keep in mind the sort of folks ordering BBQ in Portland are a very specific class of customers :)

[tonyb]

Good BBQ is good BBQ - no matter if it is in Texas, Portland, Ohio or anywhere else.

[jessriedel]

No doubt, but the reason people do or don't get it vary widely be region. In Portland I expect it's more likely to be a novelty or cultural experience, and therefore the clientele to be less price sensitive than Texas.

[RhysU]

Was that price for a half-pound moist? :)

[jasonwatkinspdx]

See my sibling reply.

[jessriedel]

Color me unconvinced. I'd wager Matt's customers differ strongly, whether measured by income, self-identified culture, voting pattern, or ethnicity.

[tonyb]

Awesome - I’ll have to check him out. We likely have mutual friends in the bbq community.

I don’t have any plans to go full time with BBQ anytime soon but that’s exactly the model I’ve looked into.

[munificent]

> He charges $13.50 for a 1/2 lb of brisket, similar prices for other meats. Sides are typically around $3.50.

People in Portland and other liberal cities will paradoxically pay a premium for "poor people" food. When you are wealthy enough to consume whatever you want, the rarest commodity is something that feels like an authentic, meaningful experience. Cuisines that come from poor areas carry that sense of authenticity with them and can charge appropriately.

I don't think you can assume that pricing model will work well outside of a few places like Portland, SF, NYC, Seattle, LA. People that aren't wealthy enough such that they do care about food prices aren't going to pay extra because a brisket is served on a just-so-cute-and-"real" metal tray.

[jasonwatkinspdx]

So both comments here are off the mark.

Food carts in Portland are extremely informal and very much a thing for everyday people, including people with low incomes by local standards. In fact it's one of the main drivers of their popularity here.

It's not a matter of wealthy people adopting "poor people's food" as a novelty. It's just good food no matter your situation in life. Matt is charging on the higher end, and a complete meal is still under $20. The best burger in my area is a double bacon cheese for $4.50 that uses really quality ingredients.

I've talked with customers at Matt's that live out in the country and make an hour plus drive to come by every once in a while.

People do value authenticity in my town. The big corporate chain restaurants are a lot more sparse here, exactly because the local places are just as cheap, far higher quality, locally owned, and using local ingrediants, etc.

The genesis of the food cart scene here was the city has some smart policies about making it affordable to start these businesses. Many people who dream of someday having a restaurant start out this way. You can make a serious shot at it with just $50k or so, which is tiny even by small business capital standards. They price their food accordingly.

It's true this place is getting more expensive, but I assure you, if you go out to any of the pods, you'll see a roughly even mix of people who are middle class, and young people that probably make barely enough to cover rent at a service industry job. Everyone will be hanging out, friendly and chatting.

Please don't project your own assumptions onto this scene if you've not been there. This town is pretty grossly misrepresented by a wide swath of media.

[asdff]

That price point is not outlandish. That foodtruck would probably be just as successful setting up outside of bars in Cleveland even. What I've noticed as an adult now visiting friends in various places, high cost of living low cost of living, is food and drink are basically the same exact price. Pints of beer from $6-9 or so. Entrees $12-16 or so. Everywhere in the country has settled at this median pricepoint, no matter what the cuisine.

[koolba]

Is it possible to purchase the cuts in advance and store them frozen or does that noticeably effect the quality? Seems straightforward to through some cuts in a deep freezer to smooth out supply costs. I do that on the small scale at home though obviously the capital costs would be proportionally larger at scale.

[tonyb]

That's exactly what I did starting about a month ago - I've got enough on hand to last about a month (most of that is committed to catering jobs that already have a set price - so my forecasting is much easier but if I didn't lock in the price I would have to eat the difference).

As long as they are safely handled I've found no quality difference at all when freezing stuff that is cryo-vaced. More often than not it has already been frozen at least once before it gets to me.

I don't ever sell anything that has been re-heated after cooking though. You can also do that with little to no quality loss but I try to position myself as a premium brand so everything is 'cooked to order'. There are also a lot more food safety concerns (cooing it fast enough, re-heating it fast enough, etc.) that I don't want to worry about. I vacuum seal cooked BBQ at home and it's just as good as fresh but you can't do that in a commercial setting without special permits that aren't available to food trucks (at least not in my area).

[trhway]

> I don't reheat/re-use leftovers. ... any unsold product is now a higher loss.

Perfect yesterday BBQ meat! Coming from USSR/Russia with its food shortages in 198x-first half of 199x i still kind of mentally shudder reading such things even after 21 years of living here.

[tonyb]

It’s not waste in that it goes into the trash - it’s just a sink cost that I’ll never recoup. Anything left over I keep for myself, give to friends/family, or donate (which is actually more difficult than you would expect since it is perishable)

I’m only open once or twice a week so secondary uses (beans, chili, etc) unfortunately don’t work for me.

[jessaustin]

Yeah, surely there could be some dish made from day-old meat.

[RyJones]

dog food for well-heeled dogs?

[jessaustin]

Any chef with any talent could use meat that was cooked literally a day ago in any number of delicious dishes for actual people.

[pie420]

That's because lobster roll customers are rich yuppies. BBQ is for poor people who cannot afford good cuts of meat so they resort to pulverizing bad cuts of meat with smoke heat and sauce.

[jt2190]

> BBQ is for poor people...

This is really not true anymore. BBQ has become a high-ticket item thanks to “Craft BBQ” and growing demand

https://www.khou.com/mobile/article/news/brisket-prices-are-...

[rsj_hn]

Yup, there is craft everything now. For example, macaroni and cheese. To me, that will always be the poor folk food of my youth, even though my friends rave about eating it at fine dining establishments. I'm sure soon we'll have artisinal sloppy joes as well -- why not, with high quality ingredients and a creative chef, you can make any dish interesting.

[throwaway0a5e]

You're exactly right that BBQ is popular and that's why BBQ is getting worse. I know I sound like a salty hipster but bear with me for a moment. There's some "show me the incentives I'll show you the outcome" reasoning behind my opinion.

When a thing becomes trendy among moneyed demographics there is now stupid money to be made selling a caricature of that thing to people with too much money. BBQ is one of those thigns becoming just another experience for yuppies to talk about in the break room on Mondays. When you're running a BBQ joint you're not selling meat cooked in a particular style, you're selling an experience. People don't care about whether your BBQ is a career long refinement of what grandma made. They care about whether it's something they can brag about. They're looking for an experience and if you want to stay in business you're gonna sell it to them. It's not about doing your thing well, it's about presentation and show. Many of the people running these restaurants hate bastardizing their craft and leaning into an image/stereotype like this but it's what pays the bills.

Maybe I'm just jaded from growing up in a tourism economy but money uncritically thrown at something tends to ruin it.

When I go looking for a restaurant I go for <censored>, <censored> and <censored>, because those three genres aren't trendy right now and any business specializing in them has to succeed on its own merits, it can't just print money by looking the part.

[sellyme]

> When I go looking for a restaurant I go for <censored>, <censored> and <censored>, because those three genres aren't trendy right now

Was this just a joke or are you genuinely censoring your own opinions on what food you like because you're scared of them becoming more popular?

[throwaway0a5e]

Little of both.

[yourapostasy]

Fortunately, BBQ in particular is one of those cuisines that with close attention to detail and some hours spent researching on the Net, you as an individual can turn out a brisket that, if not as good as say Snow's or Franklin, is more than Good Enough for an extremely satisfying experience when done with some friends and family as a group effort. One of the glories of our current age is this outcome can be reproduced with many if not all other cuisines and dishes.

[tonyb]

This is very true - I think that is one of the reasons BBQ is so popular across so many demographics - it is relatable and achievable.

[rootusrootus]

> pulverizing bad cuts of meat

Huh? The cuts are tough, yes, but they're also the most flavorful. There's nothing bad about them.

Go try and use a ribeye to make a cheeseburger sometime. It's incredibly bland compared to the flavor you're used to getting from chuck.

[wyager]

Modern high-end brisket prep is hardly "pulverizing". If anything, good BBQ is closer to sous vide prep (long-duration low-temperature cooking).

[wenc]

Brisket prices have been going up for quite a while now, not least since the pandemic started. This event is likely going to be a blip. That said, typically one of the ways to hedge against volatile prices is through forward contracts. If you have a float, have you thought about pre-paying for brisket to get a discount? I only mention this because I remember reading a story told by Nick Kokonas, who co-owns Alinea, a famous 3 Michelin starred restaurant in Chicago. When he discovered he had a float, he decided to pre-pay his vendors instead of taking net 120 and in the process got a 50% discount on beef. (because pre-paying improved his vendor's cashflow and reduced their risk, they passed it back to him in the form of savings)

From: https://commoncog.com/blog/cash-flow-games/

"Food costs money. But the way that everyone (in the F&B industry) looks at food costs, and paying for food is very weird. When COVID started, every famous chef that went on TV said, “This is the kind of business where this week’s revenues pay for bills from a month ago.” So when we started to bring in money from deposits and prepaid reservations, I suddenly looked and we had a bank account that had a couple million dollars in it — of forward money

"I started calling up some of our big vendors for the big, expensive items — like proteins: meat, fish; luxury items: like caviar, foie gras, wine and liquor, and I said, “I don’t want net-120 anymore, I want to prepay you for the next three months.” And they had never had that kind of a phone call from a restaurant before.

So how much should they discount it? So let’s say we’re going to buy steaks. We’re going to pay $34 a pound wholesale for dry aged rib-eye, we get net-120 (normally). So I call the guy and say “I’m going to use 400 pounds of your beef a week for the next 4 months, for our menu, which is about about $300,000 of beef, what (would) we get, if we prepay you?” And he was like “what do you mean?” I’m like “I want to write you a check tomorrow for all of it, for four months.” And he was like, “Well, no one has ever said that.” So he called me the next day, he said “$18 a pound” … so … half. Half price.

I went, “I’ll pay you $20 if you tell me why.” And he said, “Well, it’s very simple. I have to slaughter the cows, then I put the beef to dry. For the first 35 days I can sell it. After 35 days there’s only a handful of places that would buy it, after 60 days, I sell it $1 a pound for dog food.” So his waste on the slaughter, and these animals’s lives, and the ethics of all of that, are because of net-120! Seems like someone should have figured this out! As soon as he said that, everything clicked, and I went “We need to call every one of our vendors, every time, and say that we will prepay them.”

[tonyb]

Prices had come back down to pre-pandemic levels up until about a month ago. Nationwide easing of restrictions has increased demand faster than the supply chain has been able to keep up.

That is an excellent idea (having more than just a transactional relationship with you food vendor is a good idea in general) but my volume is way too low to have that type of leverage. The best I can do (and fortunately what I did when I saw the prices increasing) is pre-buy and freeze as much as I can to lock in the then-current pricing. Right now food supplies aren't even able to fill many wholesale orders because they don't have enough supply so I'm not sure pre-paying would help if they can't even get the product. For example one major vendor has changed their order cutoff time from 11PM to 5PM so they can spend that extra time allocating their available stock across all the orders because they don't have enough for everyone.

BBQ is my side hustle so I'll be ok either way - but if I was paying my mortgage via food service I would be alot more concerned.

[wenc]

Yes, a supply crunch does make it difficult to execute on these types of strategies. And you're certainly right that having a relationship with your suppliers is often advantageous -- very often, including upstream parties in one's system boundaries increases one's surface area for cost optimization.

Also, just thinking aloud, during normal times, if you happen to know other hobbyist BBQ folks, I'm wondering if there might be opportunities to enter into an informal group-buying situation where you pool your collective brisket demand and bulk buy at a discount. That wouldn't work right now but perhaps it might during normal times. There are websites based around this idea. Best of luck.

[secabeen]

It would be very interesting to see a followup report from Nick on what happened with COVID. Did they refund those customers who pre-paid for dinners that couldn't happen? Were they left holding the bag for the dry-aged ribeye that they then couldn't sell? I would love to hear the story.

[wenc]

I don't have the full story on what happened to the tickets and the dry aged beef, but on several podcasts, Kokonas talked about how they pivoted hard to takeout and actually did some of their best sales during COVID than at any other time.

https://news.yahoo.com/nick-kokonas-pivoted-hard-onset-19010...

COVID is weird in that it doesn't have a uniform effect on everyone.

[JPKab]

I think you have a well-reasoned, thoughtful post here, but perhaps the person who operates a BBQ food truck might not be the best positioned to take futures contracts out on brisket?

Scale matters.

[simtel20]

Also, aren't forward contracts by definition unsecured as compared to a futures market?? If the supplier genuinely doesn't have supply or goes out of business, you've lost your money, right?

[ska]

You can contract around anything, including penalty clauses. But yes if there isn't any X to be had, your agreement to take delivery isn't really helpful today.

[wenc]

Quite right, it's just the seed of an idea. As for scale, that can be achieved through pooling (i.e. group buys), though it wouldn't work right now due to supply constraints.

[wyager]

As in the story above, you don't have to literally buy beef futures on an exchange - you can just enter into a contract with a nearby beef supplier.

[robbmorganf]

I'm just curious how you started following Hacker News?

[qbasic_forever]

A lot of folks work like mad in tech to build up a small nestegg and then go pursue a passion. Starting with a food truck is a great way to suss out and ease into eventually owning and running restaurants. It's like the MVP of a cuisine/restaurant idea.

[tonyb]

Yep - you are pretty close.

I still have my tech job and don’t plan on going full BBQ anytime soon. I do it enough that it keeps me busy but I can always say no to a catering job or event so it’s still enjoyable and not a chore.

The right opportunity would have to come along for me to jump onto the restaurant world. It’s definitely something I’ve looked into but one thing I have learned is that the BBQ is the easy part of running a BBQ business - it’s everything else that is tricky. Right now I don’t have to worry about employees, rent, etc. so someone with those strengths would have to make a pretty good pitch to get me to open a restaurant.

[my_usernam3]

Yeah that could be true, but I too am curious about /u/tonyb's origin story

[tonyb]

The short answer is BBQ is “hobbies gone wild” for me. My “9-5” is in IT and that’s what pays the bills by BBQ is my passion.

I’ve being doing BBQ professionally for 10+ years. It started out just done some small catering jobs and has grown from there. Through BBQ I’ve been able to do lots of cool stuff that I would have never imagined when I started. I was heavily involved in competition BBQ for several years and through that I’ve worked with several big brands . Currently I’m focused on my food truck and rub and sauce products. I’ve also done several BBQ classes and hope that as we turn the corner on COVID I can start that up again soon.

[bloggie]

Growing a passion into one that makes money isn't rare. One of the optical engineers I work with is a master brewer at a local brewpub, working on recipes evenings and weekends, after decades of home-brewing. He does his side gig because he wanted to go bigger, meet more experienced people and try new things.

[sorokod]

Expect brisket futures to become a thing

[nradov]

Cattle futures already exist and prices are up on this news.

[Guest42]

Would make for some tough storage if they got stuck not selling them at expiry.