Pat LaFrieda (0:00)

This is Pat. He's a butcher, and last year he made $270 million. I'm going to tell you exactly how he made that happen, plus a ton you can learn from this story that's coming up in just a sec. Welcome to the podcast. My name's John Davids. You can call me J.D. if you're a fan of this show, make sure to hit that subscribe button wherever you're listening. And tell a friend if you're a real fan of the show. By the way, if you have any feedback on this episode or any of the businesses that I talk about, just leave a review on this platform. I'll read them all. Get my best stuff to your inbox@johndavis.com now let's get to the show. You're listening to Making it with John Davids. So rewind to 1986. Pat's working on Wall street, but he hates his job and he wants to try something new. Now his family's got this little butcher shop they've owned for a few decades and the business is actually kind of struggling. His dad's about to shut it down because things are going so bad. And that's when Pat spots an opportunity. He decides to ditch his Wall street job that he hates and shoot his shot on the butcher block. His dad hands him the keys and Pat is going to make some meat. So Pat starts with one big change. From day one, he needs to find a better customer. Instead of just selling to everyone off the street, he turns his focus to restaurants offering high quality meat at high volume. It's a big change, and it's all wrapped in first class service. So he starts pitching chefs around New York City. And after a whole lot of hustle, Mario Batali, a young and upcoming chef at the time who eventually becomes very successful and very famous, actually answers his call. Mario needs some veal for his new Italian restaurant, and Pat delivers. Then his phone starts ringing off the hook. Soon, the hottest restaurants in town, all of New York City, are placing orders with Pat LaFrieda. So next, Danny Myers drops by. Danny Myers, very, very famous chef. He needs the perfect patty, the perfect blend for his new burger joint. That burger joint is called Shake Shack. Pat comes through again. By 2010, this business is booming. Lafrieda hits 40 million in sales, and it's time to go. So with the restaurant business running full force, our meat man hits the gas. He starts selling to stadiums, to airlines, hotels, casinos, offering beef, pork, lamb, and a lot more if customers want it. Pat is carving it Today, fast forward. Lafrieda has a massive meat plex in New Jersey. They churn out 4,000 pounds of meat every hour. Not slowing down anytime soon. You know, this sounds like kind of a simple business, but there's actually a whole lot happening behind the scenes. Lafrieda moves really fast. When restaurants need meat, they need it now. Like right now. That's why this place runs around the clock. You can place an order at 9pm and you'll have the meat on your doorstep the next morning. And they customize everything from the blend to the cut to the trim level. They'll even wrap your meat in branded packaging so you can resell it on the spot. Anything to make this the best meat transaction that you can possibly have. The best meat that any restaurant can buy. It's all working. Last year, sales hit $270 million. Not too bad for a butcher. So there's a lot to get into on this story. Let's start by talking about probably the smartest decision that Pat made early on. That was that he decided to change the customer. He had to find product market fit, but also product customer fit, market customer fit. So Pat takes over on day one, the family butcher shop. Now it's his to run. And they were selling back then to whoever walked in off the street. Locals, randoms, people buying a couple steaks at a time occasionally. And the business was dying. It wasn't doing well. So what does Pat do? What's his first move? He makes a big strategic change. He says, I'm not selling to everybody. I'm going to find one type of customer who orders a lot and orders often in high volume and maybe even needs me a little more than I need them. That customer, restaurants, and not just any restaurants, we're going to zoom in even further. High end chefs. White tablecloth spots. Chefs that'll pay a little more. They care deeply about the quality, and they will pay for it, especially for convenience and amazing service, which we'll talk about in a second. And here's why. That move was genius. Selling to the general public is a grind. It's transactional. You guys know this. Any D2C business is tough. It's low volume. It's a race to the bottom on price in many cases, certainly with a commodity like meat. But selling to restaurants, well, that's a recurring revenue business, or at least a reoccurring revenue business. People might not buy on a subscription, but they're certainly going to place orders daily, weekly, monthly. It's also high volume, right? You're not going to buy one stake, you're going to buy 300 stakes a week. And it's also relationship based. Once you know somebody, you do business with them, you can keep that relationship going. If you become their guy or their gal, they're not leaving you over a couple bucks or over one mistake. Plus, once Pat got that one big name, the first one, Mario Batali, which wasn't so big at the time, but it was something, that was it. His phone started ringing. It's a small circle now. He has credibility, he has momentum. He wasn't just some butcher selling meat. He was the guy that chefs trust. In this small town of New York City, that restaurant scene is really important. This is where a lot of businesses kind of screw up, right? They chase every possible customer, they try to please everyone and they end up pleasing no one. They kind of get by and they make some people kind of happy, but no one is delighted. And Pat focused, right? He knew that one Shake Shack was worth more than 100 walk ins off the street. So he went all in on the right customer. That's what helped him scale his business in a big way. So lesson here is before you focus on getting more customers, make sure you have the right customers. Something else that jumped out at me was around this concept of service and service as a differentiator. Think about this for a second. If you're a chef, your life is chaos. Not unlike any business owner, entrepreneur, any professional, right? You're running a kitchen, you're managing staff, you're dealing with customers, suppliers, critics maybe. It's nonstop. So when it's 9pm and you realize you're short 40 pounds of skirt steak for tomorrow, you need someone who can get it to you by the morning, no questions asked. You want reliability and that's Pat. That's Pat Lafrida. Right? It's not just about meat, it's about reliability, it's about speed. And also there's custom cuts, custom blends, branded packaging and delivery so fast you might as well call it Amazon Prime. That's the difference. Because at the end of the day, meat is meat. Yes, of course, it's good quality. That's table steaks. But the service is really the moat in this business. And that applies to a lot of other businesses, right? Look at Zappos, it's an online shoe store. But it's a lot more than that. They built this billion dollar brand on legendary customer service. I remember the founder Tony Hsieh used to say that we're a service company that just happens to sell shoes. They do all kinds of interesting things. This is way before it was commonplace. 365 day return policy, free shipping both ways. Customer service reps who will literally talk to you for hours just to get it right. And people loved it. Another good example of this. I'm not sure if you guys know this. A little bit more under the radar. Ritz Carlton. Do you know that at Ritz Carlton, every single employee, from the bellhop to the bartender to the managers, they all have a discretionary $2,000 budget to make any guest happy, no questions asked. You don't have to get approval on that $2,000. It's just there for you. So if a guest loses their laptop charger, they will send someone out to Best Buy and have it on your desk in front of your door in an hour. If you need a birthday cake, it's midnight, done, no questions asked. That's why people pay 800 bucks a night or more to stay at a Ritz Carlton. Because they know the service is second to none. And it's part of the brand strategy, part of the operations. They make service right front and center. Chick Fil A, another one. Fast food. But it just feels different. The staff is more polite, the service is fast. Everything runs like a well oiled machine. People will literally drive past five other burger joints just to hear someone say, my pleasure. That's what you get at Chick Fil A and that's the insight Product gets you in the door, of course, but service keeps you in the game. So Pat's meat is top tier, of course, but what put him at the top of the food chain? Not the beef. The business model built around service. And there's more. If you do this right, you can actually use it to build your marketing strategy. Listen to this. If you have a business where you can place an order at 9pm and have it delivered by 6am, which is rare in this industry, that can become a big component of your marketing. What else does Pat do? He creates custom meat blends for his restaurants. Not everyone did that back in the day. I'm not sure if people do it today. These things can become a part of your brand as much as the meat itself. And if this sounds familiar, it's because other brands do this. Think about Domino's. What leads their marketing? What's that famous line, 30 minutes or it's free? That's actually from their operations manual. 30 minutes or it's free is an operations piece, but they turned it into a marketing hook. Amazon. They actually turned their operational efficiency into a marketing hook. The ability to deliver fast is a major component of the brand. It's so big that they created Amazon Prime, a brand of its own. Starbucks is another one. The coffee's really good, or at least I like it. But their brand is so heavily rooted in their operations. You walk in, there's a certain look and feel, Then your name goes on the cup. Sometimes it's right, sometimes it's wrong. Then they make your fancy drink. I'll have a venti espresso, two pumps of the white mocha, one pump of vanilla, extra cinnamon, whatever you want, no problem, we got it. Thousands of variations. Then you hear your drink order shouted out. This is a ritual. This is not by accident. Every store, every city, every country, you know exactly what to expect. At Starbucks, that's operations leading marketing. Lafrieda does the same thing. So here's the lesson for every business builder. Your day to day execution might be a powerful story that you're not even telling. If your operations are dialed in, don't bury that. Show it off. Build your brand around it, whatever it is. Reliability, speed, customer service, rituals, whatever your unfair advantage is, you can pull that up and make it a a big part of your marketing strategy. Business owners and marketers, honest question for you. Is the money you spend on social media worth it? Can you point to sales you've made from Instagram or TikTok or LinkedIn? If the answer is no, I've got something for you. It's a playbook I wrote called how to Build a Social Media Selling Machine. It's a nine step formula designed to turn your social media into into a true sales channel. One that produces revenue at scale. Get it now@johndavids.com playbook. If you're spending more than $100,000 a year on marketing, you can't afford to miss this. Grab it now@johndavids.com playbook. So I was doing some research into the early days of Pat Lafrieda, when Pat took over. And I was looking into the story of Mario Batali, which was one of his first sort of big name clients. Now of course, Mario Batali today is famous. He's a TV star. He's also built a restaurant empire. He's a big influence on bringing Italian food into America. But you go all the way back TO the early 90s in New York City and Mario Batali is a nobody, at least by today's standards. But he's got grit, he's got ambition, and he's got this small restaurant. I think it was called Po. I might be pronouncing that wrong. It was in the West Village, kind of rustic Italian place. So Mario is obsessed with food. Every ingredient matters. And one day he's building his menu, and he needs a veal loin for a dish. So he calls his usual meat guy. It wasn't Pat. It was the guy before Pat. And they shrugged him off. They said, we don't have veal loin. You can have veal rack. And they basically told him to take it or leave it. So Mario hangs up. He's not happy. He's not going to take it. And he calls the new guy across town, Pat LaFrida, who's probably at this point been hustling him, calling, calling, calling, cold calling. And there you go. Here's an opportunity. I'm going to call this guy Pat, running his family's butcher shop. So his phone rings. Pat answers. Hey, how can I help you? Mario says, I need veal loin tonight. Can you do it? And Pat probably says, sure, whatever. But it actually wasn't that easy. So here's what happened. At the time, Pat's dad was still calling the shots. So Pat couldn't just say, yes, I'll do it. Which any young hustler entrepreneur knows. That's what you say. You say, yes first, you figure it out later. Pat couldn't do that. So he went to his dad, who was still calling the shots, and said, can we do this? And his dad says, no. It's Friday. This is the worst time to take on a new client. We can't do that. It's too risky. And too many chefs skip out on the bill after a busy weekend. So not only is this a timing and product risk, this is actually a financial risk. You haven't even vetted this client. We're going to extend credit to them. But Pat wants to take a risk. He wants to prove himself. So he pushes back. He says, let me handle this one. If things go bad, I'll pay for it out of my own pocket. So Pat's dad agrees. They cut the veal, they deliver it to Po. It's fast, it's clean, it's perfect. And Mario is floored. He's super happy. The quality's there and the service is fantastic. And just like that, he makes the call. From now on, all my meat is going through Lafrieda. That one delivery, saying yes to that opportunity changed everything, because Mario kept growing. More restaurants, more fame. And he takes Pat with him. Lafrieda becomes the name in meat that all the cool kids want to do business with, supplying iconic spots, you know, Shake Shack, Mineta Tavern, all of it. It starts with one moment. You've got to shoot your shot. One call, one risk, one meeting, Right? It could change everything. So if you're feeling a little held back right now, you've lost momentum. You've got to look at the opportunities in front of you and just remember every opportunity counts, especially when you're starting up or you're a little bit set back. Just one guy making one call. They need something, you come through and it can change everything. This story actually reminds me a lot of Canada Goose, which I told you guys about back on episode 180 of this podcast. So in both cases with Lafrieda and Canada Goose, you've got this next generation stepping into a family business and instead of babysitting it, they blow it up. Right. Let's look at these two stories side by side and see what's kind of similar. There's a bunch of stuff that actually is like, oh, it happened here, it happened there. I wonder if it's a coincidence or I wonder if there's a pattern with successful businesses that pass through the generation. So let's start with Pat Lafrieda, and then we'll go to Danny Reiss. Back and forth. What was their first move? Their first move in both cases was they tore up the family playbook. So Pat inherits a butcher shop that sells to random walk ins off the street. Danny inherits a jacket company that makes uniforms for utility workers. What do they do? Pat says we're not selling to people off the street anymore. We're going to high end restaurants, high volume, high standards, being eat it yesterday. We're going to deliver right now. Danny says we're not selling to snowplow drivers. We're selling to the whole world. It's not just a coat, it's a luxury item. We're going to bring Hollywood in this. We're going to make it cool. Second, they make the customer the center of the strategy. So Pat focuses entirely on chefs. What do they need? They need fast delivery, they need custom blends, they need consistency, putting the customer in the center. And he builds a meat business around solving problems for chefs. What does Danny do over at Canada Goose? He does the same thing. He looks at what elite consumers want. They want authenticity, they want performance, they want a badge of identity, they want status. And he makes Canada Goose the answer. Third, they lean into operational scale. So Pat doesn't stay a boutique butcher. He doesn't just become the best butcher on the block. He becomes the best butcher in the city and one of the best in the world. In the country, for sure. He builds a meatplex in New Jersey that runs 24. 7. I think it actually runs 24. 6. They might be closed one day. They churn out 4,000 pounds of meat an hour. Danny over at Canada Goose, he doesn't just sell jackets out of a warehouse to anybody off the street again, he expands globally. He controls his manufacturing. He has this Made in Canada as part of his pitch. Right. Again, going back to the operation stuff I was talking about earlier. Made in Canada isn't just an operational factor. It's actually a big part of the marketing strategy. He also changes the pricing strategy. He changes the distribution strategy. Go back to episode 180, you'll hear the whole story. Fourth, they don't just sell a product, they sell a story. Pat makes his name by being the guy who always delivers the best meat exactly how you want it. That's reliability. And it becomes a big part of the brand. It's not just meat. It's La Frida meat. Danny makes cold weather survival a fashion item. Danny makes this cold weather utility item into a fashion staple. That little Canada Goose patch, it tells you everything. Status, quality, edge. And finally, they both understand something that their parents didn't. And you can't blame them. Their parents were in a different generation trying to solve different problems. So these guys have luxuries their parents didn't have. But what they understood was it's not just about the product, it's about the positioning. Meat can become premium. Parkas can become luxury. Same factory, same knives, same needles, but a totally different lens. And this is an interesting playbook for anyone taking over a family business or buying a business that's been around for generations. And let's face it, there's so much opportunity right now with boring businesses, especially with entrepreneurs that want to get into a blue collar. If they're still using fax machines, if they still haven't figured out email, there's opportunities there. But once you get into that business, what can you do? This playbook, pay attention, because this playbook applies to all those things. Don't be afraid to crack a few eggs while you cook. You gotta cook. You can't be afraid. You don't have to burn the whole kitchen down, but you gotta be willing to make hard changes and make those changes for the betterment of the business moving forward. Not just today, but over the next one year, two years, five years, ten years, that's the story of Pat LaFrieda, the $270 million butcher. Let me know what you think of this business. Leave a rating. Leave a review on this episode. I'll talk to y'all next time. I'm gonna go have some steak.