Ten years ago most Americans didn't know foie gras from a faux pas.
Here's how a couple of guys turned duck liver into a cash cow.
Michael Ginor puts down his fork and surveys a gratifying scene he could never have imagined a decade ago. New York's eating elite is practically trembling in anticipation of the chilled foie gras under a port and white truffle gelée, sent over by master chef Jean Georges at his restaurant on Central Park West. The oohing and aahing turn to delighted groans as a lobe of wine-poached foie gras, served in a fennel and caramelized black pepper sauce, is followed by a grilled chunk of the buttery liver served with sweet wines. Fluffy cardamom-flavored marshmallows finish off the meal.
A delicacy once prized by the ancient Egyptians and Romans, the force-fed foie gras (literally, fatty liver) has in France achieved the kind of reverence usually reserved for Victor Hugo and sex. But it was little known in the U.S. until Ginor, a beefy 34-year-old, began peddling it to fashionable restaurants in the Nineties.
Now Ginor and his partner, Izzy Yanay, can't meet the demand they've created. In eight years they have turned a bankrupt poultry farm in Ferndale, N.Y. into Hudson Valley Foie Gras, a $9 million (sales) company earning close to 22% pretax. Hudson Valley virtually owns the U.S. market. Along with a small California rival, Ginor is responsible for the 50,000 portions of fattened liver served in the U.S. each week.
Hudson Valley's success is a triumph over improbability. The domestic production of foie gras has long been protected from foreign competition thanks to a law prohibiting the import of fresh poultry products into the U.S. (Oh, yes, when it comes to protecting farmers, the U.S. is no slouch.) Yet no one was taking advantage of the situation. The great French chefs who arrived in the U.S. in the Seventies unhappily made do with bits of disintegrating goose foie gras illegally smuggled via Chicago in the bellies of fish.
Worse, no one yet knew how to raise geese in large groups without exposing them to disease. The solution came from Hudson Valley's Yanay, who in the late Seventies was overseeing the production of goose liver in Israel and came across a hybrid duck developed through artificial insemination. Called a "moulard," the duck couldn't reproduce but was disease-resistant. Many considered its liver tastier and less fatty than the better-known goose version.
So, in 1982 Yanay found backing from some U.S. businessmen and immigrated to upstate New York, determined to create the world's first efficient, fully integrated foie gras production for an outfit called Commonwealth Farms. But as soon as he got the company running and profitable, he was fired.
Luckily for him, he ran into Ginor, who holds dual Israeli-U.S. citizenship and in the Eighties was a hotshot bond trader for David Lerner Associates— and harbored a secret ambition. "I was a food groupie," he explains. "I read all the gourmet magazines. I followed chefs around as if they were Hollywood stars."
In 1989 Ginor, having returned to the U.S. from military duty in Israel, was mulling over what he should do with his life. As it happened, he ordered foie gras in a restaurant and was bitterly disappointed because of its poor quality. His entrepreneurial bells began to clang, and a food distributor put him in touch with Yanay, who by then was reduced to driving a long-haul truck. The pair hit it off. Ginor never returned to WallStreet, and in 1990 invested $750,000 in savings, along with an equal sum loaned by his father, in an abandoned chicken farm just a few miles from competitor Commonwealth.
Yanay carefully rebuilt his duck utopia, producing his flock by artificial insemination and rearing it in spotless, airy, heat-controlled pens. The forced funnel-feeding took place by hand. Ginor, meantime, approached the same distributors that Commonwealth sold to, but went a step further by also dealing directly with chefs. They were the ones, he discovered, who called the shots.
The chefs helped promote foie gras. Ginor dragged them to department stores, hotels and interviews with lifestyle magazines to demonstrate the sublime pleasures of duck liver. Once the chefs were in his camp, Ginor told distributors they had to choose between Commonwealth and Hudson Valley. In this way he steadily picked off Commonwealth's customers.
Then, suddenly, disaster. Just before Christmas 1992, the busiest time of the year, a weeping Yanay called Ginor at 5 a.m. to report that the old roof on the coop had just caved in, killing half their stock. They were potentially ruined, but Ginor doesn't give up easily.
He decided to bluff his competitor. After persuading his father to cosign a promissory note for $1.2 million, Ginor went to the people at Commonwealth and said he would drive them out of business. Oh yeah? his rival shot back, we heard you had an accident. Nothing serious, replied Ginor coolly, but, yes, he was momentarily short of product. Now would be a great time for Commonwealth to sell out—while there was still something left to sell.
The competitors met that evening, and Ginor turned up the heat. He kept talking down the value of Commonwealth's assets, even harassing his opponent about the price of a truck. "We only started on the big picture at 2 a.m.," he says. "By 6:20 a.m. we closed the deal. All they wanted at that point was a bed." Ginor got for $1.3 million the company that had once fired Yanay.
The poultry wars are now just a memory. But there were other skirmishes: In 1993 and 1994 animal rights activists waved blood-soaked shirts in front of a gourmet food convention in Manhattan, even falsely claiming that the ducks' feet had been nailed to the ground and their livers exploded. Ginor defended his methods as humane. "Birds naturally gorge prior to migration," he says. The activists, finding gourmets resistant to their propaganda, moved on
Today Ginor is a sought-after gourmet celebrity in his own right. Dozens of chefs join him each year for his food-and-wine festivals, such as a month-long event at Disney's Epcot Center. His latest project is raising capital to take over a lifestyle cable TV station.
So why did he walk into Jean Georges' fancy restaurant wearing a worn and scruffy black jacket? Ginor says that every day since his father died three years ago, he's been wearing the old man's clothes as a talisman. (He also sports his father's gold Tissot watch.) The talisman seems to be working.
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