These Restaurateurs Say the Secret to Better Food Is Buying the Farm

The risks and rewards of owning the land and livestock

by Lisa Elaine Held Jan 30, 2018, 9:42am EST

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A salad of fiddlehead ferns and pea sprouts at Blenheim, New York City.

Farm tools completely cover the back wall at Blenheim Restaurant in New York City’s West Village. It’s the kind of rakes-and-axes-on-reclaimed-barn-wood installation that’s become a hallmark of restaurants that bill themselves as farm-to-table.

The genre is now so ubiquitous that it prompts eye rolls. False advertising, as the Tampa Bay Times reported in 2016, is rampant in restaurants that promise to source each precious tomato from a vine growing nearby. But in Blenheim’s case, the display doesn’t do justice to the in-house farm work involved in producing and procuring the restaurant’s meat and vegetables.

“We’re almost composing a menu while we’re growing,” says Blenheim co-owner Min Ye. Ye and her husband Morten Sohlberg bought their 150-acre (soon-to-be 250) farm in November 2010, after discovering that sourcing quality ingredients was their biggest challenge.

Not many restaurant owners are crazy enough to buy the farm, but a few have, including Blue Hill in Manhattan and Rosemary’s in New York City’s West Village; the latter bought a Hudson Valley farm in 2015. Grass-fed burger purveyor Grazin’, in Hudson, New York, is owned by Grazin’ Angus Acres, a 500-acre farm that raises grass-fed Black Angus beef cattle, pigs, and chickens. On the West Coast, Belcampo produces its own organic, grass-fed beef on a farm in Gazelle, California, at an unprecedented scale for a growing group of seven West Coast restaurants.

It might seem quaint, but pursuing success in both a restaurant business and a farm that practices sustainable agriculture comes with a barrelful of potential problems.

“Operating your own supply chain, from farm to fork, presents significant business risk,” says Arabella Advisors founder Eric Kessler, a leading expert on food system investment and policy. “You are solely accountable and there are no easy alternatives if something goes wrong. But it also creates greater certainty in pricing, timing and service, factors that any restaurateur would envy.”

So, is the farm-and-table model a viable one?

Rosemary’s basil rows at their farm in Hudson, New York

Planting and plating

The average diner may not notice the difference between a four- and six-inch zucchini, but Rosemary’s owner Carlos Suarez says his chefs do, and owning a farm and choosing seeds allows a restaurant to get that specific. In 2016, Suarez expanded his rooftop garden operations to full-scale farming, and the farm is now producing vegetables like arugula, eggplant, Brussels sprouts, broccoli rabe, and potatoes, in addition to eggs from 60 chickens.

“You can get into that really nerdy detail of the characteristics of the ingredients when it’s a collaboration between a chef and a farmer,” he says. “What’s the dish? What’s the role of the ingredient? How does it need to look and taste and feel?”

The best example of that process for Sohlberg and Ye is their “Blenheim greens,” a mix of salad greens they created in search of a balance of flavor, texture, and color. Instead of growing each green separately, they mix the seeds in their ideal proportion and then harvest them together — no tossing required.

Blenheim grows a variety of other produce like heirloom tomatoes, cucumbers, and herbs, and also raises Icelandic sheep, pigs, chickens (for eggs), and bees. They also forage on their property: It regularly yields two varieties of chanterelles, wild chamomile, and sorrel, and they recently started tapping trees for maple syrup.

Things are running pretty smoothly seven years in, with a driver in a refrigerated truck making regular trips back and forth and the couple splitting their time between city and country. But there have been hiccups along the way: The team had to build a hydroponic greenhouse and give up raising cattle after they figured out (by trial and error) that their rocky soil couldn’t support a wide enough array of vegetables or grazing cattle in a cost-efficient way.

Costs, in general, are tricky. Sohlberg emphasizes that Blenheim is able to cut out some costs via vertical integration — a business term for owning multiple stages of production — but the margins are still slim. “Even with all of the cost savings that we have, it’s still more expensive than buying it from Sysco or any of the other distributors,” he says.

That’s especially the case since neither restaurant is marking up their dishes to make up for the difference, lest they lose customers. Their menu prices are comparable (or in many cases, lower than) those of other restaurants in the neighborhood.

From ranch to restaurant

Meanwhile, across the country, the same principle is at the core of Belcampo’s business model: The company has created an entirely new approach to producing and selling grass-fed beef that is picking up serious steam.

“Todd’s background was in vertical integration, and his bias was full ownership,” Anya Fernald, Belcampo co-founder and CEO, says of her business partner Todd Robinson. “I was like, ‘We can save five million dollars by not building our own slaughterhouse,’ and he was like, ‘No, we need to own the whole supply chain. That’s the only way to have autonomy.’”

Robinson, a retired finance executive, bought 5,000 acres of farmland in Northern California in 2005 and later brought Fernald in to help him create a business that would make use of it. In 2012, they started Belcampo with the intention of producing premium organic, grass-fed beef. The ranch is now 24,000 acres, and the company owns the entire supply chain, from grazing cattle to slaughter, butcher, and sale — an operation that now includes six restaurants, with a seventh location set to open in Oakland this year. Fernald says they’re in discussions to open three other large restaurants in 2018 and to franchise the business in Asia. Belcampo also sells meat to stores in New York and Los Angeles and via online grocers and just launched its own online store this fall, which now ships nationally.

At the restaurants, the company’s goal is to only sell its own meat, and that’s happening most of the time — except when things go wrong, in which case it’s noted on the menu. (For instance, when the ranch’s pigs got a virus a few years back they ordered pork from another sustainable farm and named the source on their menus.) Meat prices change daily, but when it comes to steaks, Belcampo’s prices do tend to be noticeably higher than both other grass-fed brands and especially grain-finished meat. One recent check revealed a Belcampo strip steak via online ordering was selling for $2.23 per ounce. On AmazonFresh, a grass-fed strip from Australia was selling for $1.38 per ounce while a a grain-finished strip was $1.15 per ounce.

Belcampo started with incredible capital (Robinson invested $50 million in the business), which enabled it to manage some of the inevitable issues in taking a new approach to raising cattle, transforming said cattle into beef, and getting that beef onto hamburger buns.

Belcampo’s mean eggs and ham, made with deviled ham, fried poached egg, spicy sriracha aioli

“The biggest challenge has been bringing everything to an efficient scale at the same time... dealing with the timing and inefficiencies,” Fernald says. “It’s like running three huge start-ups at the same time. And we’ve got a herd of 3,000 cattle. That’s a big fucking cattle herd. It’s a lot of animals and a lot of risk. Last year, we processed 50,000 chickens. It’s just the complexities of managing this business alongside restaurants.”

And it’s expensive, even at this scale. “Compared to commodity or just organic beef available through Sysco, it’s double the cost,” she says, which is why differentiating themselves on the quality and flavor front is so important, especially at a time when the U.S. is flooded with grass-fed beef from Australia and New Zealand, where it’s much cheaper to produce.

Still, Fernald says, the model they’ve been developing is one she sees as replicable for others who want to get into grass-fed beef production, since the economics are better than trying to raise grass-fed cattle and sell it into a supply chain that’s competing with fluctuating commodity beef prices. “If prices drop dramatically for conventional [beef], the floor drops out, but your costs don’t change,” she explains. “Having the end market makes a really big difference.”

“People like our burgers because they taste damn good,” says Fernald. “I want people buying my product because it’s the best.”

The challenges

These restaurateurs and businesspeople have made running a restaurant while simultaneously operating a farm work. But the issues they face in doing so are akin to the difficulties faced by small farms that are using sustainable practices and then trying to market and sell their food to restaurants and consumers.

“We’re still about breaking even on it, but it’s being vertical that helps it actually function,” Sohlberg said of Blenheim Farm. “We couldn’t be in the business of running this farm if we had to rely on the revenue from selling it to other restaurants, because then we’d have nearly double the costs we have now.” Or, as Fernald put it, “It’s about being able to afford farming in a better way.”

Though they’re making sustainable agriculture more affordable by cutting out the middle man, a restaurant’s low margins mean both owners are just able to keep menu prices on par with the competition. At Blenheim, entrees range from $18 (for a cheeseburger) to $34 (for braised short ribs), with most coming in around $25. Nearby, the average price for a pasta dish at Barbuto is $24; the Spotted Pig’s burger is $26. On the West Coast, the Belcampo burger costs $18 at most locations, although diners can get a “fast burger” for as little as $6.50 at more casual offshoots like the butcher shop and take-out spot in San Francisco’s Russian Hill neighborhood.

“All farmers and ranchers want to raise the standards of how they work,” Kessler explains. “An integrated farm-to-fork supply chain gives the producers the advance market commitment they need to invest in sustainability.”

At Arabella, Kessler’s developed what he says are three ingredients for a “Good Food system”: consumer demand, infrastructure investments, and public policy. “A single-owner farm-to-fork supply chain presents one of the greatest opportunities to meet growing consumer demand, reap the rewards of one’s own investments in infrastructure, and work around the bad public policy that currently stands in the way of sustainable food production.”

That’s a pretty big promise, but at the end of the day, whether it’s 50 or 50,000 chickens, all of these food businesses exist at least partly because the owners believe it’s just how things should be done.

“Yeah, it’s more expensive, but this is a long-term business direction. This is who we are,” Suarez says, of Rosemary’s. And those practices go hand-in-hand with a great dining experience, anyway.

“Restaurant clients appreciate that we’re making an effort to grow our own food at Blenheim,” Ye says. “The salads look perkier, and we notice the meat tastes different when the pig is raised the way we raise them... and at the same time our farmers find more meaning in knowing that the food is being appreciated.”

Lisa Elaine Held is a journalist based in New York City who covers the intersection of food, health, and sustainability.
Editor: Daniela Galarza