Wagyu’s big business hits San Francisco restaurants

Japanese producer Château Uenae’s Hokkaido Snow Beef is one of the most exclusive meats on the planet, and at Ittoryu Gozu in San Francisco, it’s served in two bites on a wooden skewer. The meat is rich in flavor, soft on the tongue and melts like beef-flavored butter. Under each bite hides a sweetness as intense as it is ephemeral. The experience is long and expensive — $120 to $150 for 10- to 15-course tasting menus that include plates of Wagyu tartare and poached sturgeon.

Ittoryu Gozu, which temporarily closed on New Year’s Eve following a small fire in the kitchen, isn’t the only one who loves Wagyu. San Francisco now has several restaurants whose identities are based on what is called the “Rolls-Royce of beef”. Over the past three years, Gozu has been joined by Niku Steakhouse and its sister concept, the Butcher Shop by Niku Steakhouse, as well as the aptly named Japanese bar and restaurant Hitachino Beer & Wagyu.

Japanese restaurant chain Wagyumafia, which sells a $185 steak sandwich made with Kobe beef, explored the possibility of opening in San Francisco in 2017. The venture never materialized, but it didn’t. didn’t stop Wagyumafia from hosting a Wagyu-powered dinner in the city that year with a ticket price of $595 per person. The dinner sold out.

Despite its growth, there are still many questions surrounding Japanese beef – from how it’s imported and what its sometimes complex labeling means, to why it’s so expensive. As the general public learns more about meat, San Francisco chefs and business owners are betting big on an industry that is still taking shape.

“We go through trends, in general, in San Francisco. But it’s the natural next step in catering,” said Marc Zimmerman, executive chef of Ittoryu Gozu. “You started seeing this with pigs about 10 or 12 years ago. Chefs started using whole pigs, ears, feet, and it started showing up on gourmet menus. It’s similar.

Unexpectedly, others say the Wagyu accent actually has something in common with another dining concept that’s hot in the Bay Area right now: the upscale meatless movement. A vegan Italian restaurant called Baia takes over the former gourmet restaurant Jardiniere, and prolific restaurateur Adriano Paganini recently opened the popular Wildseed, a vegan restaurant in Cow Hollow. Gozu’s business partner Ben Jorgensen said the two moves don’t impinge on each other as they are both based on sustainability.

“We use the whole animal in a way that is more natural to life and the way we consume,” he said, explaining that the kitchen uses fat from its Wagyu in many dishes, including a duck egg cream and the animal’s bones to make charcoal.

The word Wagyu is often used with Kobe beef, but there are distinctions between the two. Wagyu is a more general term that translates to “Japanese beef” — Washington meaning Japanese and gyū which means beef, and it refers to one of four Japanese cattle breeds from which this revered meat can come: Japanese black, Japanese polled, Japanese shorthorn, and Japanese brown.

Ittoryu Gozu Restaurant specializes in Wagyu, with dishes like Hokkaido Snow Beef Kushiyaki (center) and Tallow-Poached Sturgeon with Wagyu “bacon.”

(Carlos Avila Gonzalez / The Chronicle | San Francisco Chronicle)

Kobe is a type of Wagyu that must meet strict requirements for such labeling, including being raised in Hyogo Prefecture in Japan’s Tajima Province. Of the more than one billion cattle on the planet, only about 3,000 are Kobe certified each year, according to recent data from Japan’s Wagyu industry.

People in the industry compare the relationship between Kobe and Wagyu to that of champagne and sparkling wine. Sparkling wine can only be called Champagne if it comes from the Champagne region of France, and the same emphasis on location sets Kobe beef apart.

Either way, any type of Wagyu sells for a high price, which varies depending on the grade. All Japanese Wagyu are graded by the Japan Meat Grading Association. Scores are assigned from 1 to 5 based on beef marbling, meat color, firmness, texture and fat quality. The most common rating that diners see in high-end restaurants in the United States is A5 Wagyu, which is the best.

A pound of Japanese Wagyu tape at Butcher Shop by Niku can cost upwards of $90. At Alexander’s Steakhouse on Brannan Street, a cut of Kobe beef can cost $245. The high cost and exclusivity play a role in Wagyu’s local popularity, said Guy Crims, Butcher Shop by Niku’s head butcher.

“Anything that’s luxurious and anything that has to do with wealth or inaccessibility or high society, when it can be overdone in some way, people are interested in,” he said. “People are interested in the origin of the product and want to feel like they know the story behind the product.”

But demand plays only a small role in the amount of imported Wagyu beef available in the United States. What really decides its growth are the tariffs. Japan exported nearly 200 metric tons of Wagyu beef, the country’s annual quota before tariffs, to the United States in the three months of last year. Reaching the quota means that Wagyu tariffs have increased from 4.4% to 26.4%.

There is also a robust market for US-raised Wagyu-style beef, whose origins date back to 1976, when a Texas rancher named Morris Whitney imported four Wagyu bulls from Japan that were eventually used for research by the Colorado State University. The bulls were called Fuji, Judo, Mazda and Ryusho and their semen, crossed with female Angus cattle and other North American breeds, spawned the domestic Wagyu market.

Between 1994 and 1997, the American Wagyu market exploded when 200 purebred Wagyu were imported from Japan for the domestic market. This led Japan to ban the export of Wagyu cattle, which some believe continues to be the reason for its exclusivity throughout the country.

But the American industry still found ways to grow. According to recent data, the American Wagyu Association estimates that there are 30,000 Wagyu-influenced cattle raised in the country, although only a small fraction are purebred. The American Wagyu Association rates these animals with a grade of F4, which means the cow is at least 93.75% purebred.

Patrick Montgomery, the 3-year-old founder of KC Cattle Co. in Kansas City, Mo., which sells American Wagyu rib eye, strip loin and tenderloin, among other cuts, said the California was its third largest clientele. .

“It’s the Wild West right now,” Montgomery said. “But I still think there is room in the market for more companies to sell Wagyu.”

Justin Phillips is a writer for the San Francisco Chronicle. E-mail: jphillips@sfchronicle.com. Twitter: @JustMrPhillips