Craig Nickoloff’s bachelor’s degree in cartography and geography from California State University-Long Beach 44 years ago seems disconnected from his career of running restaurants and supplying them with great meat.
“Maps don’t have a lot to do with steers,” he said, but “geography was a subject I enjoyed.”
On the other hand, cows cover a lot of ground and the idea of place—down-home or on the range—has been vital in the long run. He and Bill Hustedt have built two OC businesses based around beef—both bigger and better.
It may’ve been uncharted territory when they launched Claim Jumper Restaurants—known for huge portions with a Western theme—and opened their first location in Los Alamitos in 1977. But now Brea-based West Coast Prime Meats LLC is blazing trails along a clearer route—and the horizon awaits.
West Coast Prime provides an industry parlance “center of the plate protein”—beef, lamb, pork, and poultry—to the finer dining crowds at restaurants, hotels, and specialty grocery stores.
Revenue for the year-ended June 30 was $126 million—two-year growth of 35% and No. 11 on this week’s list of fastest-growing large private companies.
Top Drawer
President and Chief Financial Officer Nathan Bennett—boots-on-the-ground for Nickoloff and Hustedt—expects revenue to top $140 million by end of the year.
He attributes growth to “knowing how restaurants operate”—he worked in finance at Claim Jumper—and a savory spot where reasonable prices meet good service.
“We’re not stepping all over [customers with] rebate layers and brokers, we buy direct,” said Bennett, who was in Omaha recently to visit ranches and see the live version of future tri-tips and tenderloins.
West Coast handles deliveries on a fleet of 28 trucks—cattle futures and logistics figure heavily in the work—and it will individually vacuum-pack steaks.
Orders that come in by 8 p.m. get to most customers the next day.
“If you ask them to cut it off at 1 o’clock they’d have to know what they need [for dinner] two days ahead.”
SoCal clients include Nick’s Restaurants in Irvine, Monarch Beach Resort in Dana Point, Surf and Sand Resort in Laguna Beach, Erewhon Market stores in Los Angeles, and Cardiff Seaside Market near Carlsbad—known for its tri-tip, Bennett said.
“At the higher end people understand and want quality,” Bennett said. “If you want a quarter-inch trim, you get it.”
The Beef
Nickoloff and Hustedt sold a controlling interest in Claim Jumper to L.A.-based private-equity firm Leonard Green & Partners in 2005 for about $220 million when it had 35 locations and $226 million in systemwide sales, news reports said.
Sales grew to $293 million and a $6.3 million profit in 2007 but fell to $233 million and a $5.8 million loss in 2009 amid the recession.
Average unit volume of about $8 million dropped to about $6 million, said Bennett, who left the company in 2007 to work for OC-based sunglasses maker Kaenon.
Another issue was a decline in quality—and portion size: “It became about margins and you start trimming things.”
Claim Jumper was bought out of bankruptcy in 2010 for $77 million by Houston-based Landry’s Restaurants Inc., which still owns the 38-unit chain.
Its bid beat offers from hedge fund Canyon Capital Advisors LLC—and from the founders, who wanted it back.
Bennett helped develop a restructuring plan as part of their bid.
When that didn’t fly, Nickoloff and Hustedt started West Coast Prime Meats.
Prime Time
Ten years earlier, while running Claim Jumper, they’d launched CJ Meats, going 50-50 with fowl supplier Rogers Poultry in Los Angeles, to buy the chain’s Midwest beef. Its provider, Irvine-based Newport Meat Co.—then at $100 million in annual revenue with clients that included Five Crowns in Corona del Mar—had been sold to Sysco.
“We saved millions of dollars,” Bennett said.
“We knew we could buy, execute on portion cutting, and provide higher customer service.”
Bennett, 41, said Claim Jumper’s 2010 bankruptcy and subsequent sale drove CJ Meats’ revenue down from about $40 million a year to $8 million “overnight.”
“Bill and Craig wanted to get active again [and] saw the opportunity.”
West Coast’s “meat guru” Al Johnson had been at CJ Meats a decade earlier and Newport Meat before that, and agreed to stay on.
“Al’s been in food service, specifically red meat, for almost 50 years,” Bennett said. “He knows every cut and every product yield off the top of his head.”
Johnson is the “litmus test … and double-check” on costs, beef contracts, and “pricing on every line item that goes out the door. In his spare time, he watches the commodity markets.”
“Stick with what you know [and] surround yourself with great people,” Hustedt said.
He and Nickoloff, now in their 60s, bought CJ Meats in 2011, selling American Pie LLC, which handled Claim Jumper retail grocery items, to ConAgra Foods Inc. at about the same time.
West Coast ran from facilities in Vernon and moved to Brea when it bought Center Meat Co. later that year.
