Mashama Bailey, Chef and Partner, The Grey
Marguerite Zabar Mariscal, Chief Executive Officer, Momofuku
Interviewer: Beth Kowitt, Senior Editor and Co-chair, MPW Next Gen, FORTUNE

MPW Next Gen 2020: The Restaurant Industry Survival Playbook

Mashama Bailey, Chef and Partner, The Grey: Marguerite Zabar Mariscal, CEO, Momofuku 

Uncategorized

The restaurant industry is in a fight for survival. We talk to two of its leading and most creative voices about its future.


so cold. It has really exposed the fragility of the restaurant industry, like no other industry and the last six months, 1,500,000 restaurants either close or shut down temporarily because I'm so hungry. I would start with you here. I mean, almost iconic big restaurant group has not been inside of also get impacted. You have to close the restaurant. Tell us a little bit this thing until why is that? Sure. Um so I said, I think the restaurant group, uh, we're just one example of many. Um, there are a lot of things about the way that restaurants are structures that make it really susceptible to what happened during this pandemic. So whether it's how employees are compensated wages, whether it's a very thin margins at restaurants operate on and the increased cost of food and rent over the past. Uh few years. Um put restaurants on the spot where a lot of them will Ferrell is going on. So that mom bowed with the kind of shut downs as well as, uh, the lack of buddhism and other factors just make the model, which already was tenuous, um, just not sustainable. Um, so we like, I think every restaurant group is trying to figure out what does the future look like and how do we better prepare ourselves for the next town? Something like this happens whether it's the second wave or whether it's another, you know, uh, pandemic or any sort of shut down. Um, we keep saying ourselves, we can't be as accessible as we were. We need to learn and be more resilient next time I want to dive into some of the ways that you're doing that. But first, Shauna for you, I mean you recently reopened Gray, which is this really, you know, award winning, acclaimed important restaurant in Savannah. So tell us a little bit about what that process has been like. What did you learn or sam ponder during the shutdown that you implemented? Uh huh. Well what we've learned a few things during the shutdown and one of the things that we really take um and have really implemented back into our reopening structure was really focusing on time management and waste management. It's been really interesting to see how um how just opening up for a small amount of time, um a fraction of what we were open, how we can actually save resources and help our staff really manage their time um more efficiently. And I think before we were doing that we were sort of trying to be a larger entity and and try to um really um use our our culinary perspective to bigger and bigger audience. But now we're really focusing on local, sustainable um goals and really focusing on the community which nurtures our staff and also our surrounding environment. So in addition to obviously opening a lower capacity, what looks different now, you know what what if I were to go into the restaurant today, how how does it look, how are you operating differently than you were? Um you know, three pandemics. Our menu structure is different, we've gone to tasting um a chef's tasting menu, which is eight courses and more of a longer experience to a precinct menu, which is more price um priced accordingly and affordable that way we can just manage how we're using our staff and also how we are using our products and those things were where we were most vulnerable and um really sort of pulling back on that really helps us um maximize our potential and so we're also heating outside and dining outside, which is what we've never really done before, We're on a busy street and I personally didn't think that people were going to be um, excited about it, but they seem to gravitate towards those, um, outdoor spaces that are really, uh, well ventilated. Got it. Okay. So Mercury, you mentioned this is really exposed some of the vulnerabilities of the industry. What are they? And how are you is lifting, what are you thinking about as a company? And, and how are you getting? Sure. Um, you know, I think it's been interesting to see, uh, federal and local level of government in response and something I realized very quickly is that whatever the need is, the reaction from government is always going to be delayed. It's never gonna people when we need it. So we've created a nonprofit, um, hopefully that we want to continue to use Covid and be able to, whether it's a portion of employee paychecks going towards a fund that the next time something like this happens, we're ready to host it happens. We're not waiting for a federal or local support. Um, in addition, I mean just looking at labour model restaurants, um, you know, something called the 80 20 rule where for an employee to be a tipped employee, they have to spend 80% of the time interacting with guests and when you get how resilient restaurants have been operating, whether it's takeaway to go all these different models, that premise no longer really makes sense. Um, so we really have to look at labor and uh, you know, whether it's cross training, whether it's um, you know, really looking at our positions and how we compensate our staff. Um, We similarly have been going to bottles where we're having much older, smaller menus. I think restaurants have gone to a point where you want to have something for everyone, only maybe you could afford to do so. And I think we really had to kind of uh b b more deliberate in what we're offering. And you know, we have a two Michelin star restaurant that's doing outdoor dining, and they're currently serving three pizzas, uh cold fried chicken, you know? Uh it's trying to um you know, as as I said, just trying to like appeal to cruise around, right, and and to understand and be reactive and be a amenity and the source of joy, the people that are here. Um So we've been really looking at all of our models um and dissecting what actually works right now, and also what do people need? Because restaurants, first and foremost, I think, you know, should be reactive to their environment and feed the people that are are their feet. So um not holding any sacred cows in terms of what, who does or what we offer, are really trying to uh make our spaces make lunch for today. Yeah, mama, I want to hear a little bit from you on that idea of restaurants, obviously they see that they do so much more right, they're part of our culture and I know you're such a core part of your community. How should we be thinking about a restaurant fit in civil society going forward? I mean, I think we've seen a little bit how there's some interconnected into and prescribers of the economy or broad ST Mhm. Absolutely. I think that the major part um the major concept of restaurants that people um I don't really see what happens behind the scenes, what happens before the hours that the staff um opens up the doors and people are sitting and dining within the space. And one of the things they don't understand is that you know you are asking someone to go to um get into a boat and harvest voices for you and you are asking for someone to plant a seed and nurture it until it's grown and it can be picked washed and delivered to you. So are you are you know dealing with um sort of um purveyors who have multiple um housing multiple places where they kind of shut out different um different products to you. So the ecosystem within restaurants really is best and wide and it really affect a lot of different people. And one of the things that I think helps also um taking that into account paying attention to your local resources and supporting those even outside of the restaurant because a lot of our farmers have gone to um C. S. A. They they have also gone into retail off their from their farms directly which helps support them and I think you know supporting them if you're not willing to go into a restaurant supporting their farms directly um and your local um your local industries directly really helps sustain those relationships. So when restaurants are back up and running we can really kind of full bring those people back on a bigger capacity. Got it. Okay so for you marjorie, you know when you're thinking about the future here, I know that it extends beyond just the four walls of the restaurant right? Like that is part of the future of the industry. What how are you doing that? I mean how do you take the brand beyond the part of the four the four walls? Uh And that that is a priority for a company even before all this going into 2020. Um You know, I think it's you seen extreme ingenuity from so many restaurants kind of finding a path forward and not just restaurants but vendors and uh and farmers and you know, so part of it has been working with them. So whether it's selling farm boxes from tau one of our favorite uh purveyors um at a restaurant major domo in L. A. Or whether it's us partnering with balder, a company that actually delivers us produced to send our Botox and rotisserie duck over the keyboard in their truck. So finding ways to partner with other impacted businesses and other models that we can help you cuddles. Um And then a big piece of that um in consumer packaged goods, there is something that we've been working on um and taking some of the ingredients of using our restaurants and packaging them for consumers. And I think, you know, a silver lining of the shutdown is just understanding and seeing how many of our customers are in the new york and whether that some of them how new york, whether the individuals who just, you know, I've always lived in uh Seattle or um Tulsa but are, you know, big things and our ability to reach them where they are is something that we really started to explore whether that's cooking classes, whether that uh chilling, crunch and seasoned salt, how can we give people and almost experience where they are as opposed to being every once in a while when they come to visit las Vegas or or visit Toronto. So that's when it's something that we always thought was there, and it's been really great kind of see this community outside of the cities that we operate and be able to provide something to them. So what is the ideal split in your view between the restaurant and received outside? You know, these products that you can sell to customers and fans? So Dave and I said this lofty goal a bit ago with almost 50% of our business will not be restaurants and we just came up with that number, you know, something that we thought was maybe impossible. But I especially now, and you know, whether it's catering, whether it's an event restaurants have always had other means to make money to complement what they do on the same tonight data. Um and we see PPG products as being one more arm of that or these cooking classes, people in your arm of that. How do we diversify what we do? Um So that in an instance like right now we're better prepared to compensate the teams that are on the ground uh and the employees that don't have another opportunity to work remotely or do other types of business. So for our steel to provide for them, we need to diversify the only way that we can continue to provide income to these individuals. So um it's been it's been uh interesting uh but it's been working I think pretty well um uh you know better than we even hope. Great. Okay, so question for you here, what is the restaurant of the future looks like in your mind? It's a net surgery playing out like a line with how you're thinking about this. I think a lot of what I really agree with, a lot of what Margaret saying about diversifying and also maintaining other streams of revenue to keep your business going. I think that's the best way to offer security. But I do think that we're working with other things as well um when it comes to making sure that the team feel supported, I think there's a currency that has been introduced um to our um to our to our restaurant industry now which is really like a trust currency right? Like so now that your your um your job is really sort of been taken away, How are they going to trust that they can come back into this field and feel um secure and nurtured and taken care of? And I think finding other streams of revenue will help um will help with that issue of making sure that people who work in this field can still view it as an industry and not just as a hobby are sort of meeting a way to get to another goal. Great, okay. Um I think we have my colleague Candy Extra joining us done. Hi everyone. Um We have a great question from Katherine ral. Who asked what new covid practices that have recently been adopted? Do you think we'll last even when the pandemic is over? Um marjorie you want to start and then china will hop over video. I mean I hope uh things like non paper menus. I think there's a lot of ways that happens in restaurants um just by the nature of the day to day. I think something like that. Um Being able to digitally access information in a way um Being able to order um You know CIA technology or your bills, your phone. I think that the restaurants have for a long time in a little bit of back to some of these uh new pieces of technology. And I think that the past six months have been pushed for mobile phones so I can see for ourselves they really for some new ways of handling things that have been handled the same way for for years and years without a ton of innovation. Trying to have a, you know, I think smaller menus, I think more more focused than um, more focused. Many use less weight. I think more outdoor dining um, will sort of really help. Uh, we'll move past, we'll move past covid. Yeah, great. Thank you both so much for laying out this uh, future vision for us. And we're going to look forward to eating with a few students. Thanks so much for making the time.