The Business of BBQ: Summer 2022 Edition
Last summer, This Is Capitalism explored The Business of BBQ for the first time. This summer we revisit the topic and spotlight a new set of organizations, each of which operate at different points across the barbecue value chain. Over the past year, their priorities have shifted from navigating the pandemic to staying on top of soaring costs.
Restaurants no longer struggle with lockdowns and social distancing problems, but inflation is curtailing discretionary spending with consumers dining out less frequently than they likely would amid lower prices. Equipment manufacturers are seeing that there are only so many grills and smokers a household needs, especially if someone already purchased a new model during the height of the pandemic. As for barbecue cooking ingredients, the lingering global supply chain gaps and the Russia-Ukraine War are increasing fears of an impending food shortage.
Yet, these days, many organizations in the barbecue industry also are looking to make the most of the first summer in two years that customers are more concerned with engaging in fun food activities than they are with following strict health and safety precautions.
WORLD SERIES OF BARBECUE
Just how popular is barbecue? Well, between Sept. 28 and Oct. 2, more than 50,000 people are expected to gather at the Kansas Speedway in Kansas City, for the World Series of Barbecue. The annual event, launched in 1980 and run by the nonprofit American Royal Association, features approximately 500 teams — including some from as far away as New Zealand — in the world’s largest barbecue competition.
Many major businesses (across sectors ranging from retail to finance) that operate in the Kansas City area serve as sponsors, have tents on display for attendees to visit, and submit their own teams into the competition. With vendors, games, and music bands onsite, spectators also can do more than eat barbecue. Money raised at the annual event goes toward agricultural education and scholarships.
“We’ve all come together in person every year except 2020, because of the pandemic,” says Kayci Vincent, manager of the World Series of Barbecue.
“Our 2021 event had social distancing safety precautions, and many international teams could not attend. But it still felt like a great reunion and we were all excited to see each other again. This year we’re working on growth, adding more teams and more activities that appeal to spectators.”
Teams bring their own meats to prepare and turn in, competing with chicken, ribs, pork, and brisket. Then there are optional competitions such as turkey, sausage, sides (potatoes, beans, and vegetables), and dessert (where anything goes). Judges certified by the Kansas City.
Barbecue Society score submissions in a double-blind process on appearance, taste, and texture. Contestants supply their own cookers, even if it means purchasing new ones, building them from scratch, designing cookers in the shape of a pig or airplane, or shipping them long distance.
The World Series of Barbecue awards trophies and a total purse of more than $120,000 across multiple winners and categories. This includes a kids’ competition with trophies that are as tall as the youngsters, and two adult competitions: one where anyone can register, and an invitation-only competition that requires teams to qualify at other contests earlier in the year.
“Rising fuel and food prices have put pressure on attendance levels at some smaller barbecue competitions this year,” Vincent says. “Thankfully, this World Series of Barbecue is on track to have record attendance. And we plan to have the best barbecue in the world.”
In the small town of Wilmette, Illinois, the Backyard Barbecue Store does big business. It sells over a dozen different smokers and grills, a wide assortment of rubs and sauces, and hosts special dine-in events with barbecue favorites including brisket and pulled pork as well as cocktails and craft beers.
Co-founder Dan Marguerite prefers the taste of dry rubs, although he also offers sauce on the side to customers who dine in. “We did ribs today for our happy hour event,” he said back on the last Friday of June. “I like to lightly glaze them at the end.”
He started the company with his nephew Brian in 2003, after Marguerite had spent nearly 20 years as a trader working inside the Chicago Board Options Exchange (CBOE). As internet trading began to take off, Marguerite found himself drawn to pursuing his lifelong hobby of grilling and barbecue more than staying with options trading in the emerging era of digital finance.
It was good timing, since that was about the time a lot of barbecue-related TV shows became national hits. Marguerite attributes the pop culture appeal to helping cook up business in those early days. “All of a sudden there were barbecue shows on the Food Network,” he says. “It was the luck of the draw.”
One of Marguerite’s most interesting pieces of equipment is the Big Green Egg — a smoker, grill, and outdoor cooker designed for temperature control and moisture retention. Marguerite loves it so much his company website features an interactive animation of the Big Green Egg blowing steam in the bottom right corner of its webpages.
Long before COVID-19 struck, the store was already delivering and installing its equipment for customers. Sales remained healthy during the pandemic. In fact, the Backyard Barbecue Store even gained new customers through online orders via its website.
With the summer of 2022 in full swing, Marguerite aims to capitalize on that momentum and continue building his business in the years ahead. Although inflation has yet to prove problematic for him, Marguerite is keeping a close eye on rising costs.
THE BLACK SWAN
Max Good is director of Equipment Reviews at AmazingRibs.com, the leading website for barbecue recipes, cooking techniques, and equipment. Good communicates regularly with equipment manufacturers large and small, and some of them have upgraded their products in response to his feedback. He notes more use of technology in backyard barbecue, including Wi-Fi and smartphone apps that increasingly feature guided recipes.
Good also owns a boutique barbecue sauce company called Black Swan, which sells three flavors — Sweet Cognac (mild), Savory Original (medium), and Beso del Fuego (hot). Black Swan is available in a limited number of retail locations in the Chicago area such as Whole Foods, Heinen’s, and Pete’s as well as online at the Black Swan website. He started making barbecue sauce as a hobby.
Favorable feedback from family, friends, and business contacts in his former profession inspired him to make it his career in 2003. Companies have been known to purchase gift sets of the barbecue sauces via Amazon Prime, and send them to clients. Due to selling sauces and reviewing equipment, Good stays aware of the overall barbecue industry market cycle.
“Pre-pandemic, barbecue restaurants were growing like daisies everywhere, but only the strong survived the pandemic,” he says.
“At the beginning of the pandemic, retail customers filled their carts with meat instead of going to restaurants. Meanwhile barbecue equipment manufacturers and retailers sold everything that wasn’t nailed down. Companies that had stock of these various items were very happy. But due to supply chain issues, if they ran out it was hard to replace. As of mid-2022, the pandemic-related factors are still a problem.”
Smoque BBQ in Chicago is one of the restaurants that did survive the pandemic. Its founder, Barry Sorkin, worked with his team of nearly 50 people to adapt to challenges by ramping up delivery, setting up outside dining stations, and instituting curbside pickup at its main location on the north side of the city. The downtown location of Smoque is inside a food court of a large office building, which temporarily closed in 2020 along with many other commercial real estate properties.
The original restaurant was able to remain operating and offer work to everyone who wanted to stay on by creating new roles to match the enhanced service model. Now both locations are back in business, sales are strong, and a third restaurant is set to open in the fall. This new concept, which is under construction and will be within a short drive of the original restaurant, is called Smoque Steak.
“For us, barbecue is about balance,” Sorkin says. “It’s about the richness of the meat, the smoke from the fire, the spice from our dry rub, and our sauce provides a bit of background sweetness and tanginess. Sure, there’s nothing wrong with just putting barbecue sauce on a pile of mediocre meat, but with some effort, barbecue can be so much more and so much better than that.”
Smoque Steak came about somewhat by accident, when Sorkin received a box labeled “brisket” that turned out to be 80 pounds of strip loins. Rather than let it go to waste, he seasoned it, smoked one medium rare, then seared it in a cast iron skillet with butter. Sorkin and his team loved the taste, so they brought in additional outside partners to evolve the concept into a full-fledged business expansion.
Since launching Smoque BBQ in 2006, Sorkin has always paid close attention to input costs. Prior to the pandemic, meat prices were crucial to manage around but tended to stay within a reasonable range. After March 2020, that calculus changed.
First the price of beef began to fluctuate wildly due to factory shutdowns, cattle being culled, and supply chain disruptions. Those issues have since largely subsided, but in the past few months Smoque has seen extreme price divergences for nearly all types of goods. Whether it is pork or aluminum foil, it appears that different suppliers are raising prices by vastly different amounts for just about any given product.
“The last few years have been crazy with all the unexpected operational and financial challenges, but we have been fortunate to be able to continue to adapt and grow,” Sorkin says. “The restaurant industry is likely to continue to change for quite a while, and our goal is to be as agile as possible.”