Uncle Jack’s Steakhouse Owner Willie Degel on how rising food prices are impacting the restaurant industry

Willie Degel, Former Food Network Star and Uncle Jack’s Steakhouse Owner, joined Yahoo Finance Live to discuss how rising food prices are impacting the restaurant industry.

Video Transcript

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SEANA SMITH: As the restaurant industry recovers from the pandemic they're faced with another huge headwind, and that's a rising food prices. The price of pork, for example, has soared over the past year. Bacon prices, they're actually at the highest level that they have been in about 40 years.

So here to talk about the direct impact that this is having on his business we want to bring in Willie Degel. You may know him from the Food Network. He's also the owner of Uncle Jack's Steakhouse. And Willie, it's good to see you. We know the restaurant industry has certainly had an extremely tough time over the past year and a half, so here you are faced with higher food prices. What exactly has that been like for your business and how have you navigated this very challenging time?

WILLIE DEGEL: You know, thank God people today-- now, we are all sit-down service style restaurants-- the people today are willing to pay a little bit more so we're able to increase our prices, but not as much to recoup the profit margins we're losing on the food increases.

As for bacon, in my Uncle Jack's Steakhouse and Meat House, it's one of our signature items. We do this thick applewood-smoked bacon that's roasted in a maple Chipotle glaze and with a homemade peanut butter base with peanut butter and bacon and people go crazy for it. We're exporting 40% right now in pork goods.

China bought up a lot of pork manufacturers, they're buying cattle, they're buying our farms, so we're exporting a lot of our goods which is hurting the American public and the American consumer here in our country and that's why things are so high. Along with all the trucking we went through and the supply and demand issues and everybody being on unemployment so much, people not going back to work, we couldn't get enough people to work to get the supply, get the product out from the farm, from everyone.

ADAM SHAPIRO: Willie, I've long thought that you know the only purpose to that iceberg appetizer for a lot of restaurants was the bacon that you get with the blue cheese. But let me ask you this. There's a disconnect because you do talk about the Chinese pork purchases, and there's articles-- if you Google it you'll see they've been buying up US pork. And yet, the Chinese were trying to support pork prices within their own country because they were killing pork-- or pigs-- because of the disease outbreak there. So, something's not right here. Is there some kind of, I hate saying conspiracy, but it doesn't add up. Why, you know, we're at 40-year highs for people who eat pork and bacon when you adjust for inflation, and that's not all to the Chinese.

WILLIE DEGEL: You know, well, you look at the conspiracy theory, it's almost like-- you know, people say China is taking over, they got billions of people, the way they have their currency and can manipulate it, and they're coming here and buying up so much of our industry, so it is affecting us.

Plus we depend on them for so many things. I'm building a new restaurant. I ordered tables, chairs, and bases from a company out of Brooklyn. I've never used them before. They were new, they were highly recommended to me. I placed the order. Now they tell me they can't have my goods till Christmas. I had to go back to my local vendor, I had to go with a simpler table, a simpler chair to get it there right away because the other company is saying it's all backed up in China. They can't get it here on the containers. So, it's everywhere in everything I'm doing. I build houses, I build restaurants, the food. It's not stopping.

SEANA SMITH: Willie, speaking of your expansion plans and going through them-- I know you send them over. Right now you're building a restaurant in a couple of locations, I believe. When you're identifying those new restaurants to build at a time like this when there are so many headwinds out there, I guess why is now the right time to take that on?

WILLIE DEGEL: You know, I talked to some of my friends-- billionaires, way bigger than me, I'm a small guy, I started from scratch-- and they want a lot of franchises and fast food and they're going basically no customer service, drive thrus, apps, ghost kitchens. They're like, I'm the last pioneer.

You know, I love service, I love interaction with people. I believe when there's a negative it's a good time to basically forge forward and take better good locations, get better deals from landlords. In Georgia, the cities I'm opening in, the new location in Lawrenceville, I talk directly to the mayor. The developer there gave me hundreds of thousands of dollars towards to build out. They want us to be successful. The community, everyone involved.

So in Georgia, compared to New York, it's way different. The personalization from the mayor, from the cities, from the community, from the landlords from the development, the whole look of who you are, what you're doing, what you're bringing to the table, how you execute, it's so much more beneficial for me than New York City. And I'm a self-made, born kid from Queens, came from nothing, and here in the city they want us to card everyone for COVID. Every day we're having different inspections. It's not stop here.

ADAM SHAPIRO: If you could get the mayor of New York City-- he's on his way out-- de Blasio-- if you could sit him down what would you say to him so that restaurants here can get back on their feet?

WILLIE DEGEL: What would I say or what would I do?

[LAUGHS]

That's a funny question. What would I say to him? First of all, he has no sense of business. To me, he's trying to force small business out and let corporate America take over and people will have less choices. You'll all be fed fast food, horrible, things made in turbo chef convention ovens. You'll never have service again. He's trying to really kill the middle class that creates a lot of jobs in this city. What I would do was personally fire him, right? And I don't believe he would ever listen to me. I don't think he has any sense of what it takes to run a city or run a small business.

SEANA SMITH: Safe to say, Willie, I don't think you're a fan of the mayor right now. But Willie, before we let you go, I want to ask you about hiring workers because this is a massive issue. We've talked to so many business owners about this. What are you doing just to get those workers through your door to make sure that you are staffed to meet the demand that you're seeing today?

WILLIE DEGEL: So, you know, during COVID-- thank God for the PP money, that helped-- but some people we had to pay different ways to get them to stay. So we tried to stay open as much as we could. And it basically-- whatever we have to do to survive. I'm a survivor. I want to win. I want to execute. I want to take care of the guests.

So now, finally-- just so you understand we opened two restaurants in the middle of COVID. We opened the Roswell Canton Street Uncle Jack's location and we opened the Peach Tree location and Uncle Jack's Meat House. Now Roswell went out of business in the middle of COVID and I was able to take it over, transform it. So I'm a very aggressive entrepreneur.

What we did was we shrunk our hours, we shrunk the menu, and we really executed. Keep it simple, smart, right, and handled it, and the food cost, and the best items we got, and people who wanted to work every day. And as things started coming back we kept adding more people.

Now in my restaurant business we're about service. If you do your job you're going to expand and make money and make a good living for yourself. We always move people up. So if you start at a minimum base and you do a good job and you become a team leader you make more money.

So in Georgia and New York I have people working for me from day one-- New York, 25 years-- that washed dishes for me and now they make $75,000, $85,000 a year and they're my executive sous chef. So you have to always create that motivational style environment. You always have to be teaching and mentoring and setting up a game plan for them to execute.

Now, hiring is not easy. A lot of people are still coming in and they have this list of demands because they hear everyone's going to pay them more money. I can't compete with Amazon. If you want to go work at Amazon for $15 an hour and be a delivery driver, God bless you. But in the restaurant business you're as good as what you do every day in 80% of the positions. We're in the service business. If you're a really good bartender and you have a personality and you make a good drink, you're good.

ADAM SHAPIRO: Hey Willie, real quick because we only have about 20 seconds, for those of us who love steak and love beef, honestly, how does chefs prefer us to order it-- rare, medium rare? Which is it, because this is a fight every time we go out.

WILLIE DEGEL: Well, me, being known as the steak doctor, I order all my steak charred medium rare. Charred means it's darkened, it's more black in look. It's not burnt. It's the fat caramelizing and all the juices locked in so I like it to look black, a little beige and nice red in the middle, fresh and juicy.

SEANA SMITH: All right, good to know for the next time I go out. Willie Degel, thanks so much for taking the time to join us. We really appreciate you hopping on here with us today.