Steak House Veteran Offers
Advice To Cattle Producers

By David Bowser

MANHATTAN, Kan. — "Just because we want to produce it doesn't mean the consumer is going to flock to the supermarket to buy it," said Dr. Jack Riley, head of the Kansas State University Animal Sciences Department.

That could apply to a host of products, but the "it" in this case is beef.

To make his point, Riley brought in Andy Revella, president and CEO of Lifestyle Ventures, LLC, and a 30-year veteran of the food service industry, to talk at Kansas State's 1999 Cattlemen's Day here.

"I was at Steak and Ale for 10 years," Revella said. "We sold a lot of beef products."

But while he was there, Steak and Ale hit a snag. Sales started to decline a little.

"Of course, it might have had something to do with the fact that we stopped opening stores and our advertising was cut back," he said.

But the company turned to the marketing department to find a silver bullet to fix the situation. The marketing department said the consumer is eating less and wants to eat lighter, so put pasta on the menu. Steak and Ale spent about $35 million to add pasta to their menu.

They came up with six different pasta dishes and an advertising campaign to match.

"We had pasta dancing through the air," Revella recalled. "We were so excited. We gave the consumers what they wanted."

Sales dropped another 18 percent.

Revella said it didn't work because they weren't understanding what the consumer was saying.

"You've got to be careful about some of these focus groups and survey things that you do," he explained.

Revella said they didn't separate what people say they want to do from what they actually do want.

They got rid of the pasta and began an advertising campaign called the "Legend of Steak."

"We said we're the oldest restaurant steak house in America and we're proud of it," he continued. "We said we're the legend of steak."

Sales went up 56 percent. They had 18 months of incredible sales growth and didn't change any of the decor, the uniforms or restaurants.

"The consumer has to have what we call 'permission,'" Revella explained.

He pointed to McDonald's as an example.

"You ever try to get an Egg McMuffin at 11:15?" he asked. "At five minutes to 11, you can't get a quarter-pounder and cheese. It's not lunch time yet. At 11 o'clock, breakfast is over. They make rules. People follow those rules. Thus they need 'permission.'"

Revella said all Steak and Ale did was give the consumer permission to go back to eating steak.

He also warned that what is important to the producer may not be important to the consumer.

"I've got to tell you, there's about 25 million people on two coasts who are absolutely clueless."

Revella said the retail consumer gets his information from the news, doctors and points of purchase displays.

"We've got lots of news out there," he noted. "There are more news channels than you could ever imagine."

But bad news sells.

"If you want commercial advertising, you've got to put on bad stuff," he shrugged.

And doctors aren't much better.

"Doctors — now here is a classy group," he said. "When I turned 40, I went to a doctor."

The doctor told him he was overweight and had high blood pressure, that he should to cut down on his red meat intake and his consumption of alcohol.

"I said, 'do you have a gun over there, because you might as well end it now,'" Revella recalled.

Despite what the doctors told him, he shrugged, he passed his physical.

"These are the same guys that if you make a nine o'clock doctor's appointment and you go in at nine o'clock, what time to you get to see the doctor?" Revella asked. "But that son of a gun, when he comes to my restaurant and has a seven o'clock reservation, at 7:02 he's demanding his table."

The other information source the retail customer gets is the point of purchase display, and most of that information is useless in trying to get a consumer to make a decision.

"What do we really know that drives the consumer's decision, and what changes are taking place in their lives that make them decide one way or another?" Revella asked. "The thing that's driving the decision is not the price anymore. The number one thing impacting the consumer's decision-making process today is time."

Ten years ago, driving through any suburb on a Saturday, one would see people out washing their cars, he pointed out.

"A very common activity," Revella said. "Wash the car. Cut the grass."

Today, people are going to the car wash and spending $10 to wash their cars.

"Ten dollars, and they feel good about it," he said.

Revella contended that as the population ages, people move from a time in their lives, from about 18 to 24 years of age, when they have lots of time and very little money to about 25 to 60 years old, when they have little time and more money. By the time they pass 60, they generally have more time and more money.

For the younger group, price is important.

"They're not really focused on great service or anything like that," he explained. "They're really focused on what can they get for their money. They do have time."

The second group is an extremely important consumer sector, Revella insisted.

"If you think about where the bulk of the American population is, understand the importance of this," he advised, "and understand where it's going."

The second group has little time, but they do have money.

"That's where we get the expression 'power vacation,'" he said. "A vacation used to be pack up the car, seven days. Now, it's a three-day weekend."

The younger group is interested in the event. The older group is interested in the experience, whether it's dining, sports, entertainment or whatever. It is an approach to what they do. Most people in the second category, he said, have the money to do what they want within reason, but they lack the time. To them, value is time and money.

"The value they put on their time has to be put in the equation," he stressed.

As the population gets older, the culture becomes more service-oriented.

"They appreciate and want more personalized attention," Revella said.

Time, not the product, is the problem.

"What will it take to win the retail customer back?" he asked. "We've got one bullet in that gun. That's convenience. You have to address the time issue."

For that reason, he said he has a problem with the commercials that are running funded by beef checkoff dollars.

"Beef — It's what's for dinner," he mocked. "You forget to tell them who's cooking it."

Revella said if the solution to their problem of time isn't provided, it doesn't matter that it's beef for dinner.

"'Beef — It's what's for dinner' — as it sits is a waste of money," Revella said. "The customer's not listening to that. You're not solving his problem. He's not trying to decide what to eat for dinner. He's trying to figure out how to get it as fast a possible."

He also said the beef industry needs to think about the country's growing ethnic populations.

"They're not going to eat steak the way other people ate it," he pointed out. "They're going to eat it on their terms. If you want them to eat it, you'd better figure out how to give it to them on their terms."

Revella said creativity is going to be crucial in the future.

Portion, too, is going to be important.

"In the retail market, we need to stop trying to make them eat 12 ounces at a sitting," he contended. "They're not going to do it. You've got to figure out how to give them what they want. You've got to give them the smaller portions in the grocery store setting and make it ultra-convenient for them."

At the grocery store, value-added products have got to be the answer, he said.

"The value you add to it is to save on the time," Revella said. "It's not just the time you spend cooking it. Somebody has to clean up."

The big opportunity for large growth is in the food service side. The consumer has already told the industry that.

In 1985 and 1986, when Revella was experimenting with dancing pasta, there were few steak houses in the marketplace. Today, there's Outback, Longhorn, Morton's and Ruth's Chris, to name only a few. The major steak house chains have opened more than 1000 stores in the past 10 years.

But, Revella pointed out, few people refer to these restaurants as steak houses.

"That's a very, very important, subtle difference," Revella said. "You have to understand what they're selling. Yes, the consumer eats the beef, but that's not what they're selling. It's the experience that they're selling."

People like to go out and enjoy themselves and celebrate.

"What's the number one product they order when they do that?" he asked. "Beef. That's why you have tremendous, tremendous growth in the steak house restaurant business, because people have chosen that. But not by itself. It has to come with other things."

He said there is a secondary issue facing the consumer: safety.

"I'm going to tell you that with all the wonderful research you're doing," Revella said, "if you focus on those things as your solution, you'll lose that battle."

The industry has to change the debate.

"You're not going to win the safety debate," he predicted. "The debate you can win is the real nutrition debate. What are the facts? Is there any better quality protein you can eat than meat? The facts say there isn't."

Moving the debate to nutrition and telling consumers that it's good for them will win, Revella insisted.

"The consumer wants to eat it," he said. "You've got to help him. You've got to give him permission."

Being defensive won't help.

"We can't get defensive," he cautioned. "We've got to go on the offense and start talking about real good news about beef, and then market it correctly."

When it comes to safety and nutrition, the beef industry is either going to be the subject of controversy or the source of information.

As long as the beef industry whines that it's being picked on, he said, it will continue to be picked on.

"Instead, you've got to become the source," Revella opined. "You've got to start a positive public relations campaign. You've got to get out there and talk about the real, true benefits, not to the economy, but to the human being, to the consumer. You have to show him that it is convenient."