Mike Connelly, Southwest regional vice president of operations for Ruth's Chris Steak House, says his employer carries its product desires on its logo — “U.S. Prime.”

“From everything that we do, we talk about the Prime beef. The first thing I want to say is ‘thanks’ to all of you who make it possible for us to have a brand and a restaurant chain that's the largest fine-dining chain in the world,” he says.

From its humble beginnings in 1965 in New Orleans when Ruth Fertel, a single mother of two, mortgaged her house for $22,000 to buy Chris Steak House, the chain today numbers 121 restaurants worldwide.

“Without Prime and Premium Choice, we aren't what we are. The only product we sell that isn't Prime is our tenderloin, which is a Premium Choice product. And the only reason it is a Premium Choice product is that there just isn't enough supply of Prime tenderloins,” Connelly says.

While Fertel, who passed away in 2002, had no restaurant experience, she understood quality and hospitality, Connelly says. “She had a good sense of what people wanted and decided she would only use Prime beef, only cut it herself and make sure anything her guests wanted, she would provide. Her only answer to customers was ‘yes, and what's the question?’ If it was legal, moral and ethical, she would do it.”

Her secret, Connelly says, was that there are only three things you need to do to a great piece of meat.

“You need to put a little salt on it, a little pepper and then you cook it at high heat. So all our steaks are cooked in 1,800° ovens and served on 500° plates. A teaspoon of butter that's placed on the finished steak as it heads out to the diner provides the trademark sizzle of a Ruth's Chris steak. It's a flavor, sight and sound experience,” Connelly says.

Connelly says the typical diner in a Ruth's Chris location will pay $75/visit. At that price, two things must happen — the food must be perfect and the service top-notch.

“Because 50% of our guests only come to see us once per year, we rely on the product itself to bring a lot of integrity to the dining occasion,” he says.

“Do we have enough quality beef in America today?' I think the answer is just enough. And I think it's going to be a challenge going forward,” he says.

In 2006, he says Ruth's Chris, on the corporate side, used 3.8 million lbs. of beef, almost evenly split between 1.9 million lbs. of tenderloin Choice and up, and 1.9 million lbs. of Prime. In 2007, the firm added six corporate restaurants and eight franchises, about a 10% increase system-wide. Plans in 2008 call for similar growth.

“That means a huge demand for Prime beef and, quite frankly, it's not always there,” he says.

To mitigate that demand shortfall and increasing beef prices, new items have been added to the menu. Seafood is now almost 10% of Ruth's Chris sales today, he says. Also added have been Wagyu beef from Australia and venison chops.

Still, he says, Ruth's Chris is getting pushback on price, a pressure he says he expects to only increase with ethanol-production mandates.

“But the bigger issue from us is the quality challenge. It's a declining amount of Prime beef. That's a huge concern to us because the pressure for this class is huge,” he says.

Growth additives are also a concern, in particular beta II agonists. Connelly believes beef production's widespread adoption of such products will exact a price, both literally and figuratively, on fine-dining restaurants and their consumers.

Connelly says this is an era of “luxury brands” — BMW, fine wines, iPods, electronics, Ruth's Chris Steakhouse. So the demand for Prime beef will only keep growing.

“How we and you supply that is going to be the key as we go forward. At the end of the day, if you can satisfy the consumer on both the taste and hospitality side, you're going to be okay. But we can't ever start selling the lower-quality beef. U.S. Prime will only mean something until it doesn't; until something better comes along and says: ‘This is better than U.S. Prime.’

“I guarantee you that someone out there is trying to figure out something better than U.S. Prime, and then you as a Prime industry become irrelevant,” he says.