Whatever people might think of Steve Hanson’s restaurants, no one has ever credibly accused the man of being stupid. Evil, perhaps. Unlikable, probably. But even his detractors won’t deny his intelligence. If Hanson was choosing this moment, and this time—before the holiday season, no less—to drop the hammer on his show pony, arguably the best of his restaurants, the one all the opinion-makers actually liked, this meant something. This was a warning sign. To seasoned restaurant insiders, this was a blood-chilling indicator that things were not just bad—but that they were going to get a whole helluva lot worse.
In a business that lives and breathes dreams, delusions, superstition, and signs, where everybody, from the busboy to the owner, is always trying to figure out what it all might mean—Why are we busy today? Why not yesterday? When will we be busy again?—everybody scrambled to battle stations, trying to figure out what it all could mean, and what they could do to stop it, hopefully before “it” (whatever “it” was) happened.
The year 2008 was the annus horribilis, as they like to call such times, the year of the Disaster—The Fear. The stock market plunged, retirement funds became worthless, the rich became poor, the gainfully employed jobless, the eminently respectable suddenly targets for indictment. In a flash, thousands of loud, over-testosteroned men flush with cash and eager to play “whose dick is bigger?”—the secret-sharers, the hidden backbone of the fine-dining business—vaporized into an oily cloud, possibly/probably never to return. What “it” meant in real terms was that, nearly overnight, sales were dropping in the neighborhood of 30 percent. Or worse. Most chefs you talked to admitted to 15 to 18 percent. A few more honest ones would grudgingly admit to upwards of 30—while trying to keep the concern out of their voices. This was fixable. No reason to panic, they insisted. To admit how bad things were—and how absolutely petrified with fear many of them were—was bad luck. The accumulated wisdom of the restaurant business dictates that admitting such things, publicly accepting reality, is bad ju-ju. It only makes things worse, spreads the fear, worries creditors—and, worst of all, frightens away potential customers.
But it was worse than that.
It wasn’t just that sales were down at the medium-range and up-market restaurants in town—it was which sales were down. It’s one thing to take in $20,000 in receipts on a given night. It’s another thing if most of that money represents food sales. What a lot of people won’t tell you is that, for many full-service fine-dining restaurants (the kind with elaborate service, freshly changed floral arrangements, “chef ’s tables,” and a private dining room), the prevailing business model before the crash was the reliance on the “whale customer,” the regular patronage of the kind of customers who’d spend a few hundred dollars on a meal—and ten thousand (or more) on wine. The percentages on wine are generally excellent—and it requires relatively little in the way of labor or equipment. The margin on food, however, is razor-thin in the best of times—even when the prices on the menu appear to be outrageously expensive. The best ingredients cost a LOT of money. The quality and sheer number of personnel needed to handle those ingredients also require a lot of money. And by the time those ingredients are trimmed down, cooked off, sauced, garnished, and accompanied by the kind of bread, butter, and service one would expect them to keep company with—there’s not a lot of profit left over.
The many in the finer of the fine-dining rooms of New York were, in some sense, being subsidized by the few who spent big dollars on wine. A few years back at Veritas, a bar customer was pointed out to me. He’d blown through as much as $65,000 in one month, giving out tastes to fellow oenophiles and strangers alike at the bar. That kind of customer can help a chef be a little more generous with the truffles.
Another worrisome feature of what was happening on Wall Street was the little-appreciated fact that, tucked away out of view of regular customers, was an entire revenue stream of corporate customers, organized groups of high rollers, dropping big, expensable Monopoly money on a dependable basis. It had been a perfect arrangement: thousands and thousands of dollars in business from people who didn’t want to be seen spending it—conducted mostly out of view of a public for whom the sight of bankers and brokers enjoying themselves had never been attractive. Better yet, these masters of the universe usually had set or limited menus that could be cranked out relatively quickly and easily by kitchen staff. Half the work at minimal effort and premium prices. This was a blue-chip relationship for high-end restaurants, which could, around the holidays, amount to millions of dollars in revenue. Much of it conveniently spent on wine and liquor. That’s as close to free money as it gets. Though you could never tell from the dining room, many more restaurants than are ever willing to admit it were designed and built from the get-go to do this kind of two-tracked business. They simply could not survive, operating the way they had before, without it.
Suddenly, overnight, that whole economy was in doubt. What was once a gusher turned into a dribble. When your customers are getting called out in the newspapers for eating at restaurants like yours, that is not an environment conducive to your interests. If a company wasn’t currently making a profit for its shareholders, it was now a liability to be seen holding expensive corporate retreats—much less throwing a truffle dinner at Daniel. CEOs who were being vilified for flying private jets and grilled in front of congressional committees for their profligate spending and the obscene scale of their bonuses—they sure didn’t want to get busted eating at Masa.
There was panic.
In the blink of an eye, hidebound attitudes and behaviors, which had only yesterday been so deeply ingrained as to be instinctive, completely reversed overnight.
Suddenly, everywhere you went, people were uncharacteristically…polite.
Velvet ropes disappeared.
Hostesses who only last week would look right through you with blank, model stares now became as welcoming as your beloved granny: almost painfully accommodating and eager to please. Phones that used to ring forever were picked up on the first toll. A civility bordering on desperation replaced studiously affected contempt. Tables became available where once there had been no possibility of there ever being a table.
Even walk-ins were treated with courtesy in the hope that any accrued goodwill might pay off later.
“I’m so sorry we can’t accommodate you today but…how about next Thursday?” replaced the curt rebuff.
Chefs who hadn’t been near their dining rooms, much less their kitchens, in some time suddenly returned—and even made a point of cooking.
Tom Colicchio was among the fastest to grab hold of the situation. Rightly seeing his television celebrity as an asset, he quickly put it to work in the service of his restaurant and announced “Tom Tuesdays” at Craft—where he, himself, stood there for all to see and cooked a special menu.
Half-price specials, half portions, à la carte options appeared where they’d once been unthinkable. Soon, you could order off the menu—individual dishes—in the cocktail waiting area at Per Se, where, previously, the only option had been the full ride through a tasting menu—and only in the dining room. Prices dropped, specials changed to less pricey, less intimidating creations. The words “two for one,” “free bottle of wine,” “half-price,” and even “early bird dinner” began appearing on menus, signs, and Web sites. Comfort-food classics like fried chicken started appearing at weekly special-event dinners held late at night—at places where such quotidian fare would not, under ordinary circumstances, be expected.
But these were not ordinary times—and everyone knew it.
Many customers, particularly of fine-dining restaurants—the kind of people who invested in stocks and bonds—had lost as much as half their net worth in a matter of days. They could hardly be counted on to have the same priorities—to behave as before. Sure, it was not unreasonable to hope that there was still room for restaurants and menus and a level of dining directed at the luxury market—people willing to pay top dollar for the very best. They?
??d always be there. But there would also be, restaurateurs quickly surmised, plenty they would no longer be willing to pay for.
“I may have money to pay for this white truffle fettuccine,” one imagined them to say, “but fuck me if I’m paying for the restaurant to buy that flower arrangement over there!”
That gap would need to be filled. By ordinary customers. We’d better start being nice to them, went the feeling. Pronto.
If there’s a new and lasting credo from the Big Shakeout, it’s this: People will continue to pay for quality. They will be less and less inclined, however, to pay for bullshit. The new financial imperatives—accompanied, perhaps, by some small sense that ostentatiously throwing a lot of money around unnecessarily might not be cool right now—dovetailed perfectly with the rising hipness of the more casual Momofuku and L’Atelier fine-dining models (which had been around for some time), as well as other, more mysterious forces, long simmering under the surface and just now bubbling to the top to be acknowledged and identified. Wiser heads saw this shift as presenting opportunities.
A lot of restaurants closed. And, as always, a lot of restaurants opened to take their places. Industry boosters will point to those aggregate numbers as a means of minimizing the severity of what happened. But who among them will survive? Who will still be standing a year from now? Two?
In the middle of the worst period of crisis, when everyone was predicting the End of Opulence, Chris Cannon and Michael White bravely opened up the very opulent Marea on Central Park South. True, the room is ultra-swank. The prices for the food—which unapologetically courts (and deserves) four stars—are expensive. But what’s interesting is the wine list. It’s cheap. Or, shall we say, unusually focused on moderately priced, lesser known boutique wines and cult wines of Italy. You pay a lot of money for dinner at Marea—but, significantly, you do not get gouged on wine. In fact, if anything, you are gently steered toward more sensible choices.
As the prices of raw ingredient continued to rise—and pressure on customers tightened—chefs were caught in the middle. Even traditional “must-have” dishes like salmon and sirloin steak were becoming so expensive to serve that many couldn’t make money on them. And customers still wanted organic and sustainable—yet affordable at the same time.
David Chang suggested a way forward in an article in Esquire, predicting an inevitable move toward an entirely new expectation of the ratio between protein and vegetables or starch on plates of the future—more along the lines of the Asian model. A concentration on not only “lesser” cuts of meat, like neck, shoulder, and shank—but a lot less meat altogether. A future scenario where meat and bone would be used more as flavoring agents than as the main event, Chang proposed, would not necessarily be a bad thing. That would be more affordable, and would force chefs to be more creative and less reliant on overkill, on bulk, to make their point—and it would be better for a population increasingly at risk of growing morbidly obese.
Hard times, he seemed to be saying, might actually help push us in a direction we were already coming to think we wanted to go—or that we should be going but hadn’t yet actually gotten around to.
Belt-tightening implies a bad thing. But it also means you’re getting thinner.
Serendipitously enough, many chefs have been wanting to go in that direction for decades. They’d never loved selling salmon or halibut or snapper anyway—because they were boring. They’d always liked smaller, bonier, oilier fishes, for instance, not because they were cheaper but because they believed them to be good. Now, perhaps, was the time to strike. For every chef struggling to convince their restaurant’s owner to put mackerel or (God forbid) bluefish on the menu, now they had a very compelling, even unassailable argument: we just can’t afford to sell salmon. So, indeed, there was light, maybe, in the darkness.
If ever a time called for braised beef shoulder or round or flank steak—this was it.
Something else was happening, too. As young investment bankers moved from the banquette to the unemployment line, they were being replaced by a whole new breed of diner. Jonathan Gold, who’s right about everything (except the virtues of Oki Dog), said in an LA Times roundup of 2009 that there were “more high profile LA area restaurant openings in the last year or so than we saw in the previous five,” but “something truly new was going on that may fundamentally change the way we look at restaurants” (italics mine).
“While nobody was paying attention, food quietly assumed the place in youth culture that used to be occupied by rock ’n’ roll—individual, fierce and intensely political.” He points to the Kogi truck, which broadcasts its location on Twitter, and similar mobile operations, the advent of “pop-up” restaurants, and the general “hipness” now associated with street food, ethnic, “authentic,” or “extreme.” For a young man with indie aspirations and a modest disposable income, there is now a certain cachet involved in hunting down a shoebox-size Uiger noodle shop in the cellar of a Chinese mall in Flushing.
It ain’t a counterculture, however, unless you’re “against” something. And the first thing to go, I hope, will be bullshit. Of that, there is so much to spare. Money may be less abundant but bullshit we’ve still got plenty of.
It’s not that there will, or should, be a tearing down of everything old—as with many revolutions. If this is the advent of a “movement,” it will, unlike all previous movements, move in many different—even opposing—directions. It’s the Great Fragmentation, a reflection of what’s been happening with television audiences, the music business, and print media for some time. Hopefully, the restaurant business, unlike media conglomerates, will be better suited and faster on its feet to deal with these new historical imperatives. They will have to be.
In the months following the crash, as restaurants were closing and belts tightening, there were a few ominous signs: sales of candy skyrocketed—as did sales at many fast-food chains. Fear and uncertainty, it appeared, led many to rush for the familiar—an infantile urge to grab some of what one knew: cheap, familiar tastes—in the same old wrapper. At least Twizzlers hadn’t changed. Old Ronald and the Colonel were still there. I wonder, though, how long that will last.
Maybe people will have to start cooking again. To save money, and because the cold reality is that people without jobs have more time for that sort of thing.
If any good comes out of all the pain and insecurity, I can only hope that the Asian-style food court/hawker center is one of them. This institution is way overdue for an appearance (on a large scale) in America. Scores of inexpensive one-chef/one-specialty businesses (basically, food stalls) clustered around a “court” of shared tables. When will some shrewd and civic-minded investors (perhaps in tandem with their city governments) put aside some parking lot–size spaces (near commercial districts) where operators from many lands can sell their wares? Sharing tables, as in classic fast-food food courts? Why, with our enormous Asian and Latino populations, can’t we have dai pai dong—literally, “big sign street,” the Chinese version of the indigenous food court, like they do in Hong Kong—or hawker centers, like in Singapore or Kuala Lumpur? Or “food streets,” like in Hanoi and Saigon? The open-to-the-air “wet” taco vendors and quesadilla-makers of Mexico City?
Food preparation areas could be enclosed, as they are in Singapore, so food handling and sanitation issues can hardly be an unsolvable impediment: Singapore is the most rigorously nanny of nanny states—with the most vibrant hawker culture.
The hawker center could be an answered prayer for every hard-pressed office worker in a hurry, every blue-collar worker on a budget, every cop on a lunch hour, as well as obsessive foodies at every income level. “Authenticity” artisanship; freshness; incredible, unheard-of variety—and for cheap? All under one roof? This, let us hope, is at least part of our future—whatever happens.
As for what else lies in store? Who knows. Gold is clearly on to something. What this means, and how bad it’s going to get for fine dining at the very top, is a matter of debate.
As Eric Ripert says, there will always be room for Hermès. The very best, something people who can afford such things know took time and the expert work of many hands to achieve. But what about the other guys? The still very expensive but not quite as good? Will anybody give a fuck about the Versaces of the restaurant business ten years from now?
Gordon Ramsay’s example might be instructive. In the last few years, buoyed by his successful television programs—and his reputation as a Michelin-starred chef—he opened twelve new restaurants around the world. All of them have lost money. He narrowly avoided bankruptcy.
Chefs looking to Las Vegas for a brighter future, a final payday, or a “Next Step” have, it appears, misplaced their hopes. That party has moved on.
And Dubai, which briefly presented itself as the new Valhalla for chefs, has revealed itself as the mostly empty, half-built construction site it always was. It is remarkable that the geniuses of high finance are still unable to see what any small-business owner would immediately have recognized: they’ve been building a lot of structures out there—and selling a lot of land. But nobody has actually moved in yet. And, by the way, it’s a fucking desert. So, it’s doubtful that Dubai can be counted on to be handing free money over to chefs anymore…Chefs and restaurateurs will have to go back to their original business model: sell people food they like and make money doing it.
If you’re looking for bellwethers, a big fat canary in a coal mine, you might look hard at what happens in Miami—with the multimillion-dollar renovation of the Fontainebleau Hotel and its associated businesses (including the very fine Scarpetta restaurant). Bar and “lounge” business—which has also been a stolid underwriter of restaurant bottom lines—will probably be seeing some major changes. This is a town that has traditionally thrived on bottle service: the selling of a twenty-dollar bottle of vodka for five hundred dollars (with accompanying rights to a chair). How long that sort of douche-oriented economy survives is questionable. While there will always be douchebags, how long there will be enough rich douchebags willing to spend that kind of money for, basically, nothing is something I’d be worried about down there—and at any restaurants that double as “lounges.”