Outback Steakhouse, Texas Roadhouse, LongHorn Steakhouse, and other steakhouses can be found all over the United States, but there's no denying that steakhouses are doing less business than they used to. There are more restaurant options than ever before, and more people are cooking at home as well, but there is more to it than just that. You may have heard restaurants bragging about Kobe beef, but a little research shows that they're being pretty deceptive, and there is also the simple concern about spending too much money. Let's take a look at the real reason why steakhouses are disappearing.
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00:00There was a time that anyone wanting a special meal would head to a steakhouse.
00:04Anniversaries, promotions, birthdays, retirements, and graduations were all celebrated in true
00:10American fashion, over a giant slab of meat.
00:13But the 21st century hasn't been kind to the steakhouse, and across the country, they're
00:18disappearing.
00:19Longtime favorite restaurants like Ponderosa, Bonanza, and Outback Steakhouse have all announced
00:25massive shutdowns.
00:27Steakhouses are shutting their doors for good, and some chains have been struggling
00:31for as far back as 2008.
00:34Steakhouses are having such widespread problems that you might even call it an epidemic of
00:39closures.
00:40So let's talk about what's really going on when it comes to these staples of American
00:45cuisine.
00:54Rising beef prices
00:56Historically, beef prices go up when droughts hit, since it's harder to maintain cattle
01:01in an environment where nothing grows.
01:04Droughts aren't going away anytime soon, so market prices continue to skyrocket.
01:09The trend continued specifically in 2017 and in 2018.
01:14News outlets reported cattle ranchers were still dealing with drought conditions, as
01:19well as struggling to keep up with increasing demand.
01:22Prices are being driven up by that demand, pushed even higher as U.S. beef exports also
01:27hit record highs.
01:29Production is struggling to keep up, but it's not enough, and that's hurting the profit
01:34margin of steakhouses across the country.
01:37When Wall Street favorite Ben Benson's Steakhouse closed in 2012, they cited rising costs of
01:43beef as a factor in shutting the restaurant permanently after their lease wasn't renewed.
01:48Fast forward to 2017, when the New York Post talked to steakhouse owners across the country.
01:53Some places saw their beef prices jump about 20 percent, and that's not the kind of cost
01:58increase restaurants can easily survive.
02:02Bang for your buck
02:03They say you get what you pay for, and that's definitely true of steaks.
02:07While high-end steakhouses might be scaring away customers with their price tags, steakhouses
02:12that have been more accessible are finding they have another problem.
02:16People now know they're paying a premium for steaks that are no better than what they
02:20can pick up at their favorite grocery store.
02:23According to James Beard Award-winning food writer Josh Ozersky, one of the biggest problems
02:28with American chain steakhouses is the quality of the steaks they serve.
02:33Most, he says, aren't serving USDA Prime, they're cooking lower grades of steak.
02:39They often use tenderizing methods like poking the meat with needles, adding MSG, and using
02:44butter to mask the toughness and the texture.
02:47So unless you're prepared to spend big bucks at a big city steakhouse, more and more people
02:51are just opting to cook their own.
02:54Kobe beef left a bad taste
02:57People want to be able to trust a restaurant, and when the truth about Kobe beef started
03:01to come out, it didn't make steakhouses look good.
03:05In 2012, Forbes' Larry Olmstead called the industry's promotion of Kobe beef, food's
03:10biggest scam.
03:11At the time, there were a ton of U.S. steakhouses that advertised Kobe beef on their menu and
03:17charged exorbitant prices for it.
03:20But there was a catch.
03:21At the time, no real, authentic Japanese Kobe beef was sold anywhere in the U.S.
03:28In the following years, Olmstead revisited the issue.
03:31By 2014, there were only a few restaurants in the U.S. authorized to sell real Kobe beef.
03:37He said that while there were some legit steakhouses actually serving up the real deal,
03:42most of them weren't.
03:43When Inside Edition ran their expose in 2016, they found there were even some Michelin-starred
03:50steakhouses supposedly offering Kobe beef, and lying about it.
03:54I'm very embarrassed I work here.
03:57Aye.
03:58Aye.
03:59Animal welfare
04:00We're not just getting more aware of how healthy our food is, we're also becoming more aware
04:06of where it comes from.
04:07When you start talking about meat, it's a tricky subject steakhouses are getting caught
04:12up in.
04:13When Prevention wrote a piece on the cruelest foods on the market in 2012, it included,
04:18you guessed it, beef.
04:20Protesters concerned about factory farm and slaughterhouse conditions have descended on
04:24steakhouses from Toronto to Australia, not just condemning the restaurant, but the diners
04:29eating there.
04:30In 2016, a coalition of 50 organizations set their sights on Darden restaurants.
04:35The parent company of places like Olive Garden and Longhorn Steakhouse.
04:40The movement focused on getting the chains to do more to improve their animal welfare
04:44standards and only source meat from responsible organizations.
04:48Even though Darden talked the talk, they allegedly didn't walk the walk.
04:53Organizers said, and that's not good publicity surrounding an already uncomfortable subject.
04:59Living in moderation
05:01You are what you eat, the old saying goes, and there's something to that.
05:05The dining choices you make do, after all, say a lot about who you are.
05:09How about your favorite food?
05:10What would that be?
05:11Oh, milksteak.
05:12Hmm?
05:13What?
05:14Milksteak.
05:15And that connection, says food writer Josh Ozersky, is at the heart of one of the big
05:21problems Americans are having with steakhouses.
05:24He describes them as,
05:25"...closer in spirit to strip clubs or spas, places to which people repair for rights of
05:30costly self-indulgence."
05:32Both the steakhouse and the strip club seem to offer the most primal of pleasures, but
05:37the actual exchange is cynical, unsatisfying, and almost prohibitively expensive.
05:44Ozersky argues that heading to a steakhouse to gorge yourself on a massive piece of meat
05:48was once up there at the top of the pyramid of life's pleasures.
05:52There are slabs of steak, too much alcohol, desserts so indulgent they'll make you sick,
05:57and modern Americans just aren't into that anymore.
06:01At a time when restaurants are going increasingly healthy, steakhouses are a relic of the not-so-distant
06:06past.