INDIANAPOLIS, Ind. - The CEO of Steak 'n Shake reportedly wants to do away with the bright red cherries on top of the restaurant's signature milkshakes in order to cut costs.
Sardar Biglari, 41, is founder of Biglari Holdings Inc., which is the parent company of the Indianapolis-based Steak 'n Shake. He held a meeting with investors about his strategy to turn the company around from millions in profit loss.
“Sardar Biglari said at one point that Steak 'n Shake spends $1 million per year on cherries for milkshakes and that he would love to get rid of that $1 million,” said a source who the Indianapolis Business Journal cited. The IBJ verified the comment with another shareholder in attendance.
“Three different shareholders pointed out, in conversations, how ridiculous that sentiment is. … Given all [the dubious expenses], shareholders were pointing out that maybe there is a better way to save $1 million rather than eliminating cherries from Steak 'n Shake’s milkshakes,” the source said.
The iconic diner has been making their shakes the same way since 1934, according to their website.
Biglari detailed a two-pillar recovery plan in hopes to reverse Steak 'n Shake from being in the red, and that's not from the cherries. He wants to invest $40 million to install new milkshake machines, as well as convert the 400 company-owned restaurants to single-store franchisees, the IBJ reported.
“He is literally inventing a new milkshake making process—he said at the meeting that this was going to be a patented process—and that is going to speed up service,” a shareholder who attended the meeting told the IBJ. The shareholder spoke without the approval of his employer.
Steak 'n Shake reported a nearly $19 million operating loss in the first quarter of this year.
Last year, the chain suffered a $10.7 million sales loss, the IBJ reported. Customer traffic counts also slid 13 percent over the last three years.
This story was reported from Los Angeles.