How Restaurants Became One of America's Most Selfless Institutions
(Bloomberg Opinion) -- When Caroline Galzin’s popular Nashville restaurant began to buckle under the pressures of the pandemic last spring, she started handing out what she needed most herself: community support.
In the past nine months, Galzin’s staff at Nicky’s Coal Fired has dwindled to six employees from 32 and her revenues have collapsed by more than half. Yet during that time she also managed to co-found an effort, joined by more than 70 of her peers, that's distributed hundreds of thousands of dollars in grants to support unemployed restaurant workers, as well as thousands of fresh-food boxes and grocery-store vouchers to local families in need. And while Galzin’s own business has been gut-punched by the pandemic, it's surviving — in no small part because the local residents she’s worked to support have given that support right back.
Galzin is among a growing number of leaders in her industry who have taken on roles this year as neighborhood organizers. They've demonstrated that to survive in volatile times, restaurants are going to need to do one thing above all others: invest creatively in their communities.
Some chefs and restaurant owners are investing in the figurative sense — in the broader wellbeing of their neighbors by offering food relief for vulnerable residents. Others are investing more literally in real estate, in new, locally-focused product lines and in sourcing ingredients from nearby farms.
Nationwide, the sector is in an unprecedented crisis: 110,000 restaurants have been shuttered since March. Even with the promise of vaccines, things are likely to get worse for the industry before they get better. Meanwhile, food banks have never seen higher demand, with 50 million Americans facing hunger.
José Andrés is perhaps the most visible example of a chef-turned-community activist, having converted his Washington restaurants, along with the Nationals' baseball stadium, into staging grounds for food donations this year. He's distributed 175,000 meals to low-income families, school kids and essential workers in and around Baltimore. Similarly inspired, young New York-based chef Matthew Jozwiak founded Rethink Food, which has invested $10 million in struggling independent restaurants and donated over two million meals in cities across the U.S. since April.
At its heart, though, this movement is local. Two other Nashville industry leaders, Philip Fitch and Philip Krajeck , who own the popular restaurants Folk and Rolf and Daughters, have introduced a $28 Family Meal donation program. In the first week, their customers bought 175 meals for neighbors via an announcement on social media. Krajeck said the program has given his beleaguered employees “energy and purpose,” and he plans to keep it going post-pandemic, noting that Nashville has experienced other recent traumas, from the tornado that pummeled the city last February to the recent downtown bombing. Inevitably, there will be more disruptions ahead. “Even after the pandemic, there will be hunger,” he told me.
Such outreach can be both a branding opportunity for chefs as well as a moral imperative. Chef Ben Hall, who was recently forced to close his popular Detroit restaurant, Russel St. Deli, told me, "In the post-pandemic restaurant business, it will be really hard for chefs and owners to claim innocence and naivety on things like fair wages, community food security, food waste and unsustainable sourcing of products. Too many things have gone wrong; too many things have been laid bare to go back to old models."
Hall is now focused on buying, rather than renting, the property that will house his next restaurant. “It will be hard to survive the inevitable ups and downs of the industry if we don’t own our own real estate — it’s essential security in a business this volatile,” he said. I’ve talked with many chefs like Hall who’ve said they couldn't have survived the pandemic if they hadn’t owned the property that housed their restaurants. If our country wants to insulate the industry from risk going forward, state and federal lawmakers should consider offering incentives to restaurant owners who are willing to invest in their own real estate and reward banks who provide loans for such investments.
Restaurant owners will also continue to benefit from more diverse product lines inspired in part by pandemic pressures. Hall has developed a new revenue stream for his dormant business with Little Pot Soup, a startup that prepares and delivers soups by the quart to local customers. Galzin of Nicky’s Coal Fired has created a homespun market that's helped her Nashville restaurant survive. It sells, alongside her takeout offerings, what she calls “pantry-stocking items” such as dried pastas, bagels and frozen sauces. “It’s been another way for our customers to support us, rather than supermarkets,” she told me. These efforts to diversify the core value of the restaurant industry — whether through real estate investments or alternative revenue streams — should persist beyond the pandemic.
The challenges of 2020 have also revealed how archaic and vulnerable to disruption the food supply chain is, and the importance of sourcing ingredients from local and regional farms. Increasingly, chefs and restaurant owners are coming to see that these smaller operations are essential to a resilient and sustainable food supply going forward. Tandy Wilson of the Nashville-based restaurant City House has gone from “seasonal” to “hyperseasonal” during the pandemic: “The flavors are better when you source locally, but you also have better communication and more knowledge about what ingredients you’re getting and when you’re getting them,” he told me. His use of digital menus has allowed him to be more dynamic about the food he offers, so he can adapt to the ingredients he has on the fly.
Investment in community also needs to include working toward a more equitable distribution of wages among restaurant’s employees. Nicky’s Coal Fired is one of many restaurants that has moved away from a model based on front-of-the-house gratuities and toward a service fee that can be more fairly distributed among servers and kitchen workers. Such a fee in all restaurants would make it easier to provide secure wages for restaurant staff, which were struggling with unsustainable incomes well before the pandemic. Galzin hopes to maintain a service charge going forward, but doing so will require a shift in sensibility among restaurant patrons, who must be willing accept the additional fee in lieu of tips.
The past year has accelerated changes in restaurant business models that go far beyond better takeout options and outdoor seating to embrace the concept of mutual loyalty within our communities. The paradox of vulnerability and generosity in the industry — brought out in high relief by the trials of Covid-19 — will redefine restaurants' future for the better.
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