By Victoria Rivkin - CRAIN'S NEW YORK BUSINESS
October 13, 2003 -- In a city with a weak economy, choosy diners and no end of steakhouses, it pays to have a marketing edge that goes beyond the usual claims of offering the largest, thickest and most succulent slabs of beef.
At The Prime Grill on East 49th Street, between Park and Madison avenues, that edge can be summed up in one surprising word: kosher. With three rabbis on staff--each working an average of 30 hours per week--and a bountiful stock of laminated prayer cards and skullcaps, the 300-seat steakhouse has built an unusually devoted clientele.
"It allows me to entertain at a business level as someone who does not have kosher restrictions would be able to do," says Stuart Krause, a regular patron and partner at midtown law firm Zeichner Ellman & Krause.
Sensing that people like Mr. Krause represent a sizable and woefully underserved market, a small but growing number of high-end restaurants are going kosher. Currently, Manhattan has roughly seven upscale kosher eateries, including veterans such as Le Marais, Va Bene and Shallots NY.
The attraction is clear. "This is a marketer's dream," says restaurant consultant Arlene Spiegel of Spiegel & Associates. "This is a captive audience, because there are very few certified kosher places that are also very good restaurants." She also notes that the Orthodox Jewish community is tightly knit, which helps news of restaurant openings to spread quickly by word-of-mouth.
Tapping into that market poses some unique challenges, however. To be officially approved by a kosher-certifying agency, restaurateurs must hire rabbis to open and close their eateries as well as to supervise all the food handling.
At The Prime Grill, the rabbis make sure that no one tampers with the food-they're the only people with the keys to all five refrigerators. To guarantee that no client ever eats a bug, no matter how small, rabbis inspect each and every leaf of lettuce on a light table with a magnifying glass.
Beyond that, restaurants must buy only meat that is slaughtered according to Jewish law and then soaked and salted to eliminate all traces of blood. In addition, no dairy food may be used at restaurants that serve meat or meat products.
None of this comes cheap. Kosher beef costs at least 50% more than regular meat. At a place like The Prime Grill, that premium amounts to $20,000 a month, bringing the monthly meat tab to $60,000. On top of that, the restaurant lays out at least $120,000 a year for the rabbis' salaries and kosher certification fees.
Moe Lax is among those who are convinced that the gains from going kosher far outweigh the costs. Last December, Mr. Lax, the new owner of The Box Tree restaurant on East 49th Street, reopened it as a high-end, glatt kosher-certified establishment serving French-Asian cuisine.
"The observant Jewish community has definitely been underserved," says Mr. Lax. "Also, people who are not kosher but are associated with someone who is, either through friendship or business, now have somewhere to go."
Establishing a reputation among observant Jews doesn't just happen overnight, without any effort at all. The Prime Grill has spent the last two years cultivating this niche market. It has offered rabbis free dinners, run advertisements in Jewish newspapers and invited entire congregations in for meals on some normally slower nights.
This year, The Prime Grill has even begun to offer special dinners along with rabbi-led services for some of the most important Jewish holidays, such as Passover, Rosh Hashana and Sukkoth.
Its marketing campaign has paid off. Last year, revenues at The Prime Grill hit $8 million, and Steven Traube, the restaurant's marketing director, thinks he knows why. "The overwhelming reason for our success is that we have the backing of the kosher community," Mr. Traube says.
At the same time, he acknowledges that kosher spots must appeal to a broader audience of non-Jews, a clientele that accounts for roughly half of the revenues at The Prime Grill, for example.
"We stay away from having Jewish types of foods on our menu," he explains. "Our marketing angle is that we have a fine-dining menu--it just happens to be kosher."