The MAHA Shake-Up at Steak ‘n Shake

0:00In many ways, steak and shake is like any other burger chain. There's fries, milkshakes, obviously burgers. Our colleague Heather Haddon went to visit one in Indiana a few months ago. It's on a strip of lots of other restaurant chains, which is drive along, it's chain after chain after chain. And inside. And grilling, people frying, flipping burgers, attending to the drive through. But in a lot of other ways, steak and shake is different. There's lots of branding within the restaurant that says, you know, 100 percent grass-bed beef, 100 percent beef tallow. There's the bottles of Coca-Cola that have sugar cane instead of high-frocious corn syrup. So there's definitely a lot of branding there that shows that this is a different kind of restaurant. Giant American flags wave out front.

1:02Their Patriot shakes on the menu. Fries are served in gold cups. What did it smell like? Um, smoked beefy. These changes are all aimed at capturing a new customer base. People who support the Maha movement make America healthy again. Yeah, I think all these changes from the, yeah, the beef tallow, the grass-bed beef is really about leaning heavily into this Maha universe and the consumers who are motivated to go out to eat based on it. So it is, you know, it is explicit in their branding and their marketing. And you know, some of this magma coding is their new target market. Welcome to the journal, our show about money, business, and power. I'm Ryan Knutson. It's Friday, September 11th.

2:02Coming up on the show, the Maha Shake Up at Steak and Shake. Steak and Shake has been around since the 1930s. Its first location opened up in the town of Normal, Illinois. It was founded by an enterprise and couple named Gus and Edith Belt. Him and his wife purchased some fuel stations and one of them had a restaurant, which, you know, back in the day was serving chicken beer, that kind of food. And then normal made a push to go dry at this time. And Gus Belt, who seemed like he was a smart entrepreneur, said, I need a new concept. That new concept was, of course, burgers and milkshakes. Almost everywhere you go these days, you'll find a steak and shake proof of the pudding of how popular steak and shake has become.

3:04Even from those early days, in some ways, he had kind of a Maha bent because he would grind the beef at times right in front of people to show how fresh it was. That this was not just a normal burger. This was like fresh steak between buns for your family. Inside, it must be right, steak and shake. Over the decades, Steak and Shake expanded across the Midwest with several hundred restaurants. The chain cycled through a string of owners. Then in 2007, a new owner stepped in. His name was Sardar Biglari. So let's introduce our listeners to Sardar Biglari. He is a real character. He lives in Texas in San Antonio. And from a very young age, he's been interested in investing. He is a real kind of American success story of self-made guy who was interested investing in a diverse set of options.

4:08So he's been interested in restaurants. He's been interested in oil and gas and an insurance. So Steak and Shake was actually one of his first big investments. Things didn't work out as well, so he had hoped though. Between 2018 and 2024, Steak and Shake closed around 200 restaurants, and it sales plummeted by about a third. Biglari needed a new strategy. How did he come up with this idea to lean into politics and Maha specifically? He saw RFK come to the position he's in as leading HHS. The Department of Health and Human Services. Yes. Something he is poisoning the American people. And we know that the primary culprit are food, are changing food supply, the switch to highly chemical intensive processed foods. And he saw an opportunity. And he went full into, let's look at bringing Maha friendly products to this restaurant chain.

5:18Starting in early 2025, Steak and Shake began cooking its French fries in beef tallow, which is rendered fat from cows. This year, the company rolled out grass-fed beef at all of its restaurants. He also started bringing in some of this kind of more mauga-coded elements like the big flags and the Patriot shakes. Also Steak and Shake now accepts Bitcoin. He also struck up a little X relationship with Elon Musk and started offing some of these deals for Tesla drivers, giving them out like super-sized fries on Tuesdays during certain periods in the afternoon. Biglari almost never does interviews and did not respond to our requests for comments. About a month after the company announced its new direction, RFK Jr. appeared at a Steak and Shake in Florida for an interview with Sean Hannity on Fox. The two of them sat at a table eating fries and burgers. And Steak and Shake just switched out.

6:18And people are raving about these fries. You changed them. They really are. Biglari also started getting into online political spots while using the Steak and Shake brand. Like when Cracker Barrel changed its logo last year. Cracker Barrel's new logo and $700 million brand overhaul sparking some backlash from customers and critics who say the company is abandoning its country roots. Biglari is also an investor in Cracker Barrel. And last year he used his platform to blast the rebrand. Steak and Shake taunted Cracker Barrel on X saying the company had essentially become too woke. The burger chain even started selling red magas style hats that say things like firecrackerbarrel CEO and Biglari was right about Cracker Barrel. You know in some ways, Tartar Baglari and these others won because they did change the logo and they're branding back to kind of what it was.

7:20Is Biglari a pretty political guy? Sartar Baglari has been what appears to be a Trump fan for a while. He's also the owner of Maxim magazine, a men's magazine that endorsed Donald Trump in 2024. And has been generally sympathetic. It seems to Republican causes not a huge donor but donating to Trump and related Trump you know, Republican causes. Biglari even hired a former Trump administration senior advisor to lead Steak and Shake's overhaul. Someone the company calls its chief maha officer. Why this maha overhaul might be harder than it sounds? That's next. Sartar Baglari met his future chief maha officer at a wedding in Florida.

8:22The ceremony was over and people were grabbing late night food. There was a steak and shake food truck there and they strike up a conversation and low and behold Michael Boes leaves HHS where he had been and he starts working for steak and shake. Michael Boes at the time he was working at the Department of Health and Human Services under Robert F. Kennedy Jr. Boes helped revise the food pyramid. Michael Boes is a very tall Texan and very thin who says most of his diet is made out of meat which is sort of interesting in itself. But anyway, he had a background in private equity. He worked for various private health care companies and he ended up working for HHS under RFK where one of his tasks was to try to make maha real in big fast food companies. So trying to convince big fast food companies like McDonald's etc to you know,

9:22improve their ingredients to make it more friendly for these kind of ideals they were interested in and he found that very hard work. He told Heather about his frustration over the phone. If it was Adidas within the frying oil, whatever it may be, and again we just kept getting the run around and it was always like oh let me check with my team on that and my argument to a lot of these other organizations was like look I truly believe that there's an economic value to make this change. Clearly people want this this political movement and come out nowhere. Right. Meanwhile Boes noticed that stick and shake was making all these changes on its own. All the while, we're not talking to stick and shake at all and they're just rolling out these announcements both run over again. And his title is really chief maha officer. His title really is chief maha officer which if you think about is incredible branding,

10:25I mean it just makes it so explicit what his work is and I think you know what he was hired earlier this year. It was an incredible marketing moment for sticking shake because suddenly he was on Fox News. Can you tell us what a chief maha officer actually does? We are bringing fast food to what it was years ago when my parents grew up with when my grandparents grew up with and what I grew up with for a short period of time. Real ingredients, real food that everyone can trust and and pronounce. Boes did a segment for Fox at a stick and shake with Laura Trump where she cooked fries and worked the drive-through window. Here you go. Thanks so much. Have a great day. This is maha's stick and shake now. You know that right? He is very well spoken. He's very charismatic. He's very good at talking about why they're doing this work and the importance of this work and that they believe in it. We want to get back to what humans have been eating for centuries. What tallow, meat, cheese, and bread and no other added chemicals associated.

11:28Well things like beef tallow and cane sugar are less processed and many would say taste better. Many dietitians say those foods aren't necessarily healthier. Big restaurant chains including McDonald's used to fry their food in beef tallow but eventually they moved away from beef tallow in part at a concerns of heart health. So a lot of dietitians say that these kind of animal fats just aren't as good for you relatively speaking as vegetable oil. I think what dietitians would like to see in fast food is more apple slices and more whole foods not just switching what you're frying, your french fries in. So I think they would like people to consume fewer fried foods and not necessarily drink different types of soda but drink less soda. What is the supply chain like for this stuff? Because restaurants have been using vegetable oils for so long so those supply chains are well developed but I imagine that's not really the case for something like beef tallow.

12:33The challenges is to do this kind of work and change your supply chain so radically is that it's really expensive to do so we're going from really mass market food distributors that in food suppliers that can provide big gallons of vegetable oil to smaller producers that can provide beef tallow. Having sugar cane, coke and bottles is just not as economic to offer for a franchisee as putting regular coke through your soda fountain. It's just more expensive to provide these products. Coke made with cane sugar is typically only sold in bottles rather than a spout syrup. Some of steak and shakes suppliers haven't achieved economies of scale yet. Bose's quest for buns made without using seed oil is a good example. Only now have they announced that these buns will actually be coming later this year so this is months and months of work to try to overhaul one element of the product and

13:38Michael Bose has his sights on everything, all the condiments, all the every ingredient he's looking at and for each one you've got to make sure that people care, do they really care about seed for your oil buns? We're going to have to see that if that's a big motivator or not. How is this all working out for steak and shake financially? I think for steak and shake it is improving sales but it's also increasing costs so in terms of profitability it is better than what it was say two years ago but it is not it is not on fire I would say it is not shaking the whole fast food landscape with what they've done. And steak and shake is a franchise business like a lot of other fast food chains. So how do the franchise owners feel about these changes? So when I was in Indiana I talked to the owner Keith Mitchell about these changes first of all he had not really heard of Mahaw before all this work started happening but you know he's excited

14:42to just see that the chain is really taking a strategy and running with it and marketing it and he sees his sales going up and so he likes that. What if these franchise owners are not on board with MAGA or the Mahaw movement though I mean these are in many ways controversial highly political things. Well then they'll probably need to find a new restaurant so because you know these at least the products are part of the franchise agreement so they need to offer them as part of the menu. Steak and shake's political overhaul shows no signs of slowing down. In fact the company just this week endorsed a congressional candidate because of his support for the Mahaw movement. What would this mean for BigQuery if this doesn't work out? This brand is important to his overall holdings. He has taken out a loan based on steak and shake's performance so if this didn't work out it would be really bad for his overall company

15:44so he's placed a big bet on personally that's the steak and shake moves are going to work. The real risk is that there'll be enough people coming to steak and shake to make these moves make economic sense and you know that they won't have to raise prices a lot you know everything in food right now is getting more expensive I mean all fast food chains are struggling to keep their prices and price increases moderate and when you're adding this whole new element to it it makes it even more challenging. That's all for today. Friday September 11th. The journal is a co-production of Spotify and the Wall Street Journal. The shows made by Catherine Brewer, Evelyn Fajardo Alvarez, Pia Gedkari, Max Green,

16:47Sophie Coddner, Matt Kwong, Colin McMulti, Jessica Mendoza, Laura Morris, Enrique Perez-Dela Rosa, Sarah Platte, Alan Rodriguez-Espinosa, Heather Rogers, Fierce Singy, Jiveka Verma, Catherine Whalen, Tatiana Zameez and me, Ryan Conuteson. Our engineers are Griffin Tanner, Nathan Singapore and Peter Leonard. Our theme music is by So Wiley. Additional music this week from Catherine Anderson, Peter Leonard, Bobby Ward, Nathan Singer Park and Boudotte Sessions. Fact checking this week by Nicole Pissolka. Remember we have another episode of our new special series My Monday Morning coming on Sunday Morning. We'll see you then.