Home Cooks Are Grabbing Discount Wagyu, Uni, and Caviar

(Bloomberg) -- Two months ago, Regalis Foods was selling premium Japanese A5 wagyu to chef Alex Stupak’s Empellon restaurant in Midtown Manhattan. On March 15, Empellon, like all New York restaurants, was ordered to close its dining rooms because of coronavirus restrictions.

Regalis is revered among high-end establishments for its luxury products, from wagyu beef and truffles to caviar, gourmet cheese, and rare mushrooms. The audience instantaneously disappeared. “We lost 99% of all business,” says owner Ian Purkayastha. On March 16 he pivoted to sell his inventory directly to consumers—at a discount.

“We are essentially selling product to home cooks at wholesale pricing and in some scenarios even less than that,” Purkayastha says. The live king crab that chef Daniel Boulud ordered for his eponymous New York restaurant is now available to the public for $395 a pound, which is almost cost for Regalis. Momofuku restaurants purchased a lot of Platinum Osetra caviar and Columbia River smoked trout roe; it’s now available for the first time to home cooks. The A5 wagyu that was once destined for Empellon is now selling out, at $425 for about 4 pounds. American wagyu is a bargain at around $15 to $18 a pound; it typically sells for $50 to $60 a pound.

Chefs’ Warehouse Inc. has also changed its model. The publicly traded company is the largest specialty food purveyor in the country, selling everything from Allen Brothers bone-in rib-eye to Morton’s Steakhouses and Terre Bormane olive oil to Gramercy Tavern and Eleven Madison Park in New York. When the restaurant world imploded, founder and Chief Executive Officer Chris Pappas decided it was time to open things up. “Previously only 1% of our sales had been online to the public. Now we’re preparing to sell to thousands of people a week,” he says. And the market reacted. Chefs’ Warehouse stock, which had traded as high as $39.58 on Feb. 12, fell to a low of $3.60 on March 18. The price jumped to $10.62 on news the company would start selling to the public on March 27. “My job is to get it back to $40,” Pappas says.

At Chefs’ Warehouse, meat boxes, with assortments including the $100 Butchers Choice Box—stocked with USDA choice sirloin steak, New York strip, and rib-eye—represent 90% of sales, according to Pappas. The company is in the process of stocking warehouses across the country to facilitate delivery and combat the expense of FedEx, as well as setting up trucks to sell at farmers markets. Pappas is also donating meal kits to police stations and hospitals. “The irony is I always wanted to create a business called ‘Shop Like a Chef,’ but it took a nuclear disaster to get me to do it,” he says.

Regalis has seen its briskest sales in meat, specifically wagyu, as well as uni (sea urchin). “They’re the most obviously chef-driven products,” says Purkayastha, with a bit of surprise about the uni. He, too, has been selling boxes of assorted meats, from warehouses in Dallas and Chicago, which might include Japanese Jidori chickens, ground American wagyu chuck, Berkshire bacon and hot dogs, and other products. The Dallas Police Department is a customer. And, like Chefs’ Warehouse, Regalis plans to keep the consumer model going when the crisis is over.

Purkayastha, whose company is best known for its premium truffles (so much so that the 28-year-old’s nickname is “Truffle Boy”), says that if there’s anything positive about the current shutdown, it’s that it didn’t happen during the fall truffle season. “We couldn’t have survived it,” he says.

Even so, it’s not always easy to be positive about the situation. “Why can’t it be February again?” asks Pappas, speaking for the restaurant world.

©2020 Bloomberg L.P.