dining-trends-restaurant

New Year, New Food Trends, No Poke

As Mothersauce wraps up its first calendar year of operations, I am looking back with pride at all that we have done, but I am mostly looking ahead to what we are going to do. Our future is very bright, and I will soon announce some incredible projects for 2018.

In the meantime, I get asked a lot about trends—what is the next one, which one is a fad, what’s my favorite. Occasionally, I get asked a better question—where do I see the food and beverage business going? While that question is mostly tailored to DC, it is always valuable to think more broadly and ask also where is the business going nationally?

This seems like the perfect topic for my end of the year blog post.

Thinking about where the food and beverage business is going is critical to deciding where to invest my company’s resources.

There are trends that I don’t think have any staying power (I love poke, but…), and there are trends that seem to be holding on and even growing (cider). Instead of exploring them all, l am looking at one that will continue to have a major impact:

Food halls.

Not food courts, of course. A food court is the place in Pentagon City where I get my hair cut and NEVER, EVER go to Panda Express. Especially not for beef with broccoli.

Dammit.

A food hall, or sometimes a food market, is a curated collection of vendors under one roof that eschews the traditional one building, one concept model. The key is a multitude of offerings, but not too much overlap (think of an all hamburger joint food hall. Overkill. And, gross). Like many things, the model is simple but not easy.

In our area, we are fortunate to be punching above our weight class (like we always do in food) by having two food halls in the nation’s top 20, Eastern Market and Union Market. Union Market, in fact, is in Bon Apetit’s top 5.

Newcomers like The Block have added more flavor and penetrated the suburbs, and there are so many more variations on the theme on the way, it is hard to count. Mike Isabella is claiming 40,000 square feet in Tyson’s (it is in a mall, but it is NOT a food court—got it?). Notable chef Jose Garces is opening a 20,000 square foot Latin-themed food hall around the corner from Union Market, and developers know that to offer the latest to their tenants, they need to get in on this—Forest City is planning to open “Quarter Market” as a part of their remodeling of the Ballston neighborhood in Arlington. Will Ballston finally be a cool place to go? Doubt it, but it’s a start.

There are many more, and there are some interesting twists. Incorporating retail not just for F&B, but clothing and home goods is an interesting way to create stickiness and offer vendors a platform other than a traditional shop. This winter, The Block borrowed from an Asian tradition, huge in LA, to open a “night market.”

What is consistent is the customer’s desire to access many different options in a setting that is cool, informal and easy. Everyone gets what they want, the experience is seamless and fun, and you want to go back.

But, how do they work for the partners involved? The landlord, the management company, and the vendors themselves? Hard to say, but what seems like an amazing thing from the customer’s perspective is rarely as clean and smooth behind the scenes. The logistics and the economics are far more complicated than with a traditional restaurant setup. Figuring that out will be the key to long term success for all the partners involved.

And if they do figure it out and pack the places, will they kill restaurants? No, not at all. But it is already having an impact on the food and drink scene, and it will continue to do so.

The real interesting question is how will they evolve. Right now, a food hall is basically a mixed-use development with tenants paying rent and sharing some amenities. Simple.

What more could it be? Is there an evolution that truly creates a win-win-win for the property owner, the customer AND the vendors? Perhaps someone out there is already working hard on that model…

Ahem.

The New Grandmothers

Last night I had the great honor to meet world-renowned Chef Massimo Bottura. Chef Bottura is much more than a perennial winner of Michelin stars, best restaurant awards and every other accolade that can be awarded in our business. He is in fact a transcendent figure with a vision that goes far beyond his restaurant in Modena. I encourage everyone to watch his episode of Chef’s Table on Netflix to see what I am talking about.

Chef was in town at American University to promote his new book, Bread is Gold, a collaboration with other chefs of great renown. It is a recipe book, but it is also a vision for the future. In Chef’s eyes, the key to providing food for those who need it lies not in increased production, but in decreased waste.

As part of a panel discussion with local thought leader Chef Spike Mendelsohn, the notion that culinary traditions—and guidance on how to appreciate and not waste food—is less and less a thing passed down from grandmothers or others in our families. Our society, particularly in America, lacks that generational connection in many ways. And so, who is there to replace them? Who can carry on the legacy of appreciating that food comes from effort, from the earth, and it must be savored when eaten, cared for with love, and least of all, wasted?

Perhaps chefs?

Moderator Mitchell Davis from the James Beard Foundation threw out that notion acknowledging that concurrent with the decline in family traditions, there is a rise in the celebrity status of chefs. No longer in the back of the house, they are now front and center on panels, at the White House, on TV and in every conceivable venue for influence that exists.

They wield great power in influencing our culture, especially the younger generations, on how to treat food. They can act as thought leaders and shape generations and perhaps solve this great problem in our world as we race towards a more crowded—and hungry—planet.

Quite a responsibility indeed. Especially when many of these men and women have responsibilities to their businesses and families. However, what an extraordinary opportunity. And it can be done in a granular level by showing people how to prepare food for themselves, in their homes, with love and care for the ingredients. Just like your grandmother might have shown you.

Chef Bottura’s career has been defined by bold—and perhaps reckless—visions that he makes into reality through a singular combination of passion, drive and savvy. And of course, with a tremendous team to support him. This latest vision represents just the latest move for a man who seems hellbent on leading the way and creating change. From Parmesan 5 Ways to making Cacio e Pepe a rallying cry for earthquake victims to driving our world to think differently about how it eats—and wastes—food.

Just another crazy idea. One that may be gold.

Grazie, Chef.

Help Wanted

What makes DC a great food city is not just the food, but the media that cover it. We are lucky to have a collection of passionate and hardworking journalists in DC who do more than just review the new poke place. Or the new poke place. Or the new…For real, what the Hell with poke?

To understand this business, you must look past the fabricated drama of openings and closings and what pop-up theme bar has the longest line. This is a business with many determiners of success existing behind the scenes. Recently, one of DC’s best food writers, Jessica Sidman at the Washingtonian, drew attention to what might be the single most critical factor in the success or failure of restaurants over the next couple of years.

Staff.

This piece draws attention to what is being considered a crisis. I have written that talk of a bubble is hyperbole, but this issue is very real, and while I don’t think it will deflate the industry, I do think that many restaurants that might otherwise have the pieces in place to be successful, will not be.

As the article points out, every operator in town is acutely aware of this issue, and it is not a new one. However, what makes this piece helpful is that it singles out the Wharf as particularly exacerbating the problem.

No doubt, the Wharf will be a good thing for the city. Growing up here, the SW waterfront was good for buying seafood, and that was it. It is certainly underutilized, and I look forward to seeing it succeed. I also look forward to someone inviting me to see the Foo Fighters opening night at The Anthem. Hello? Anyone? Sigh.

As the excitement builds towards the opening of the Wharf, residents are excited, and no thought at all is given to how many customers it will take to support these businesses. That should be a concern. There are simply too many places for everyone to do well. And with the prices these places have paid, they will need every customer they can get.

Reports are already out that several places will not meet the required opening deadline. That is expected but nonetheless troubling.

But again, that is not the real worry. Sidman’s article states that the Wharf will need nearly 900 employees just for the restaurants. And she rightly theorizes that those employees will certainly come from other restaurants. That of course is nothing new—staff routinely hop to the newer spots.

But there is still a gap.

There simply aren’t enough competent and well-trained employees to staff all these new places and all the other places that are continuously opening around the city.

The solution to that problem is complicated, but workforce development is key. There are solid jobs at every skill level to be had in restaurants, and there is substantial opportunity for growth. Whether it is local non-profits focusing on culinary specific job training (plug for my non-profit, La Cocina VA), or broader initiatives by local and national government, more needs to be done.

There is always talk about America needing better jobs, but that is not true here in DC. The jobs are here–we need the people to work them.

And to be clear, I do believe that our industry needs to do more. The antiquated ways in which we treat staff need to continue to evolve. The idea that long hours, low pay and tough conditions are part of the job is ridiculous.

If we want to attract the best and the brightest—and occasionally just get a warm body in there to fill a shift—then we need to do more ourselves to attract that talent.

I have had a lot of conversations of late with smart people in the business who are trying to figure this out. We are way past realizing there is a problem, but we also don’t have all the solutions in hand. Articles like this help to make the broader community aware of the crisis, and perhaps allow for outside solutions we haven’t thought of. I think that would be welcome.

Why Invest in Restaurants? Why Not!

You have all heard some variance of the adage, “Nine out of ten restaurants fail within the first year.” I can’t argue that makes it hard to sell restaurants as an investment. Except for one thing—it isn’t true.

Not even close.

In fact, only 17% of restaurants fail within the first year, the lowest number of any service providing business including real estate agents and brokerages. This myth has been debunked over and over, but the data I am using comes from a comprehensive study by two economists. The summary was published in Forbes.

Hmm. How then, given that the facts override the myth does it linger? Well there is one theory, but this isn’t a column about what are facts, do they matter, and can I make up my own facts if I want to? I’ll save that for another time (teaser: you in fact can’t make up your own facts).

Accepting for now that facts are facts, I think this quote from the researchers sums it up:

“Perhaps due to the visibility and volume of restaurant startups, the public perception is that restaurants often fail. However, as shown in this paper, restaurant turnover rates are not very different from startups of many other different industries.”

The fact is, what we do is for all to see. If the price of gas on a big sign is an indicator of the entire energy sector, or the economy for that matter, then the restaurant on the corner of your block, or the turnover in the entire neighborhood, is a sure sign of the risk of the industry, right?

Hardly.

Humans are notoriously terrible at estimating risk (if we were good at it, we would never drive a car), and the fact that our business successes and failures play out literally in the streets for all to see doesn’t help defeat false narratives.

The reality, however, is that many restaurants and bars and other food and drink businesses make it. In fact, many of these businesses scale far beyond their first store, and there are many opportunities for follow on investments and exits.

Don’t believe me? Fair enough. But would you believe Steve Case? The billionaire co-founder of AOL and founder of venture capital fund, Revolution LLC is very bullish on food. To the tune of tens of millions of dollars over several rounds poured into local startup, Sweetgreen (personal favorite: Rad Thai) and other food ventures. From its inception as a tiny salad spot in Georgetown, Sweetgreen has grown exponentially and is now valued at over $500 million. That’s a lot of green.

That’s one example, and a high profile one at that, but I assure you the list goes on. Whether it is Cava Grill raising $60 million (mostly from Revolution), or Spider Kelly’s entering our seventh year with rosy sales forecasts, examples of successful companies in this business abound.

But sure, there is risk. There are no guarantees, and it is a tricky business—customers are fickle and competition is fierce.

So, what is the secret? How do you improve your odds of picking the right opportunity and mitigating the risk? Ahem. Allow me to introduce myself…

By carefully selecting the founders I work with, patiently curating the concepts so they are ready for primetime and balancing out our portfolio to diversify, I am working hard to put our investors in the best possible position. And of course, I am jumping in with them, side by side.

Will that guarantee success? Absolutely not. But I sure as Hell can beat a 90% fail rate. And you shouldn’t need Steve Case to know that.

Reach out if you want to learn more.

Real Change. Right Here.

For many years, I was a Big Brother. Of course, I have been a big brother for all but those first two blissful years of my life (sorry, Ben), but the capitalized version is different. Big Brothers Big Sisters is a one-to-one mentoring organization that provides youth with adult role models—someone to provide guidance and positive examples. It is a great organization, and the reason I did it was that I wanted to be a part of change I could see right in front of me, right here where I live. There is no anonymity in mentoring, and the change you see is immediate and personal.

I have been looking for some time for an organization that can have the same effect, but on the broader community I live in and the industry I work in. I found it in La Cocina VA. After hearing a piece on NPR about the organization, I called the same day. I joined the Board of Directors weeks later.

La Cocina VA is primarily a culinary training center that provides people—primarily recent immigrants—with the skills and certification they need to work in the hospitality industry. “Job creators” are useless if there is no one with training to fill the jobs. La Cocina provides our industry with qualified and eager workers—something that we desperately need.

More than that, however, La Cocina VA offers hope to our most vulnerable community in the DC area. Language training, conflict resolution, counseling and food assistance are all a part of the program. La Cocina VA wants our members to become impactful members of the community beyond their job, and they understand that the ripple effect of that can be far and wide.

I am thrilled to have been asked to serve, and I hope that I can offer help in taking the organization to the next level. We are currently planning an ambitious new center in South Arlington. There will be a café and catering company to serve the Arlington residential and business community as well as an expanded training center and a culinary incubator to help members learn about the possibilities of entrepreneurship—yeah, I am all over that last part…

From the tiny basement of a church two blocks from where I grew up in Arlington, in the next couple years La Cocina VA will grow into a powerful force for change right here where we live. Skeptical? Look no further than the Founder and CEO, Paty Funegra. She quit her job to start La Cocina VA, and in its short existence, they’ve been visited by Senators and Congressmen, and she has been invited to the White House to talk about the mission.

I hope you’ll keep an eye on our progress and come visit us when we open the center—coffee is on me. Wait, foget that. Pay up—it’s for a good cause.

City Paper Feature Article