Tag Archives: restaurants need help

A CHEF’S LETTER TO CONGRESS

31 Thursday Dec 2020

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When approached, as it should be – your position is very challenging, at times – almost impossible.  By design you are charged with defending the Constitution, protecting the American people from harm, creating and passing laws that support the Bill of Rights, keeping other branches of government in check, lifting up the economy, being a beacon of light for other countries seeking to maintain or create a democratic government, creating an environment for private business to be innovative and cutting edge, maintaining the infrastructure of an enormous country, and doing all of this as representatives of the people.  This job of representation was designed to be a public service, something that you choose to do for the betterment of the country – offering your expertise in an altruistic manner for a period of time.  This is hopefully done in a manner that will leave the country better off as a result of your involvement.  You are elected by the people to do just this, and they trust that you will live up to the pledge that demands it.  We know that it takes time to get comfortable and understand your role more fully; we know that a few years is not enough time, but we also know that representation was never meant to be a lifetime career that bends to your need to “keep the job” and hang on to the personal benefits that it provides.

All of this is a heavy responsibility – not for the faint at heart.  This should never be a position that sets aside what you know is right and what the people expect in favor of a political party’s inclination or the pressures from donors and lobbyists.  The expectation is that you will stand up to this pressure and choose what is right and appropriate over what special interest groups desire.  This is a position that should make it difficult for you to sleep at night, to take those long vacations, to set aside the need to read and research, to avoid challenging the norm and stand on that soapbox at times in defense of what is right for the people.  Sorry, this is what goes along with the position of representation – representation that holds on it’s shoulders the lives of American people, their livelihood, their families, and their potential to live the American dream.

These are incredibly challenging times, times that none of us could have imagined just a year ago.  We all know the issues: a 100 year pandemic, a crumbling economy, a threatened system of education, loss of millions of jobs, a planet crying out for help, our decaying international stature, runaway deficit spending, fairness and equality, and the demise of private entrepreneurship – such an enormous load.  This is the worst of times, not the best and as a result this is the most inappropriate time to relinquish your responsibility for partisanship behavior.  When times are toughest teamwork must rise to the top of everyone’s priority list.  The decisions to be made must always take precedent over party desires and special interest pressure.  You need to come together to resolve the critical issues of our time or we all will pay the price.  Your people, the ones who placed their trust in you with their vote, are counting on you and they are watching.  The world depends on you just as much as do the American people and they are watching as well, watching with bated breath. 

One issue that may seem to be just another to add to the pile is the health of the restaurant industry in our country.   To some, this industry may seem to be one that is far from critical.  After all, people can cook at home.  To some, restaurants will always be a luxury and not a necessity – something that is great to have, but not essential.  I would beg to differ, and so would the millions of Americans who either work in, or dine in those establishments that have been the backbone of our economy for generations (yes, the backbone).  Allow me to elaborate for your edification – first some hard facts:

According to the National Restaurant Association:

  • There are (were) over 1 million freestanding restaurants in the United States before the coronavirus was part of our vocabulary.
  • 15.6 million Americans are (were) employed by the restaurant industry and to so many who live in this country – working in a restaurant was their introduction to the workforce
  • 90% of restaurant managers started out as entry-level restaurant employees demonstrating the upward mobility from a job to a career and although I don’t have a numeric value for it – a high percentage of professional chefs got their start as a dishwasher
  • 80% of restaurant owners started as an entry-level restaurant employee demonstrating the magic of the American Dream to become an entrepreneur
  • 70% of American restaurants are single unit private entrepreneurships

Now on the qualitative side – the following list points to the societal importance of restaurants to the heart and soul of our country:

  • Throughout the last 150 years – restaurants have been that place where people gather to challenge each other, to celebrate, to nourish, and to reward.  We rely on restaurants to provide these opportunities and the environment that fosters these interactions.
  • As our country has clawed its way through disaster after disaster: two world wars, the Korean war, Vietnam, Desert Storm, The Afghanistan War, the Great Depression, numerous recessions, the horrors of 9-11, Polio and HIV, hurricanes, fires, earthquakes, and other natural disasters – it has been the American restaurant that showed the first signs of national recovery.  When these disasters occur – it has been the American restaurant Industry that came together to help with the first, most basic need – to feed those in need. 
  • When families seek to raise their children to be active members of society and learn to care for themselves while earning those first paychecks – they turn to restaurants to teach their sons and daughters some basic skills.
  • When the demands placed on families because both parents need to work, or in single parent homes where survival is the first call to arms – the ability to lean on restaurants for family meals has always been a comfort.
  • When neighborhoods that have been plagued by decades of neglect seek to renew and rebuild – it is oftentimes expected that a restaurant will be the first business to open and show signs of life and hope for that renewal.

I could go on and on, but the essential point is that restaurants are important to America, they represent all that we envision and work to reach: a paycheck, an opportunity to become an entrepreneur, a place of gathering and comfort, a place to celebrate and raise a glass, an a sign of life and vitality for a community. 

Right now restaurants are in need of understanding and help from Congress.  This is not an issue that can be put aside for a while and looked at in the future.  This is not a tomorrow issue – this is critical TODAY, in this very moment.  The pandemic and necessary restrictions on public places like restaurants in order to protect the lives of so many are something that restaurant owners, chefs, servers, and managers understand.  At the same time, this is not a normal situation that resulted from an operator’s ability to manage properly, this is far beyond our control and as a result we need help to weather the storm.  Some predict that as many as 50% of the private restaurants in America will close before this pandemic comes under control – some will reopen and new ones, undoubtedly will rise up, but millions of jobs, the centerpieces of many neighborhoods, the lifeblood of far too many communities, and a significant chunk of the American Dream stand to crumble.

This is not a time for Congress to bicker over politics, to take partisan sides, to try to slide in those special interest expenditures, or to go on vacation with the job left undone.  This is the time to act for the people and the country that put you in office to be a representative, to do what is right.  The restaurant industry needs help in providing a paycheck for their employees, loan deferrals, rent support, and long-term advisement on how to reinvent themselves.  This is what one would expect from the greatest nation in the world and from a country that promotes the American Dream as essential to its character.

To fail to do this will result in the destruction of an essential industry to the character of America.  WE CAN’T WAIT – TIME HAS RUN OUT.  Do what you were elected to do and do it TODAY.  We are all watching what you do next.

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

Restaurant Consulting

www.harvestamericacues.com  BLOG

THE RESTAURANT ECO-SYSTEM NEEDS HELP

17 Thursday Dec 2020

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There are a number of reasons why restaurants fail – some are predictable and avoidable, while others can catch a business off guard.  None, however, are as devastatingly out of the operators control as this pandemic.  Even the best operators are at a loss for solutions.  There are short-term band aid solutions such as takeout, delivery, or even conversion into retail markets where wine inventories and local necessities take over space once occupied by diners, but they are not a replacement for a steady turn of tables.  Restaurants have been relegated to outside dining or limited indoor space with loads of protocol limitations (some that are even more stringent than what is expected of other businesses) – this doesn’t pay the bills or keep a staff employed.

The pandemic is an “all hands on deck” problem that can be somewhat contained through simple precautions, but until there is mass vaccination of a population – these precautions dig at the heart and soul of a business that is essential to our way of life, our psyche, and our social health and wellbeing. 

There have been well over 100,000 restaurants that have closed their doors permanently as a result of the pandemic.  Many of these restaurants have been around for decades or even generations.  They just can’t survive the pain of lost business for months on end.  Now, this alone might not keep the average consumer or politician up at night, but what they fail to understand is that restaurants are at the center of a broad eco-system of businesses that are inter-dependent.  When your favorite restaurant closes its doors it is disturbing and sad, but it is also part of a domino effect that can tumble out of control.

Here are some of the other businesses that suffer when a restaurant closes, sometimes they too cannot survive as a result:

[]         Regional Farmers:  A significant percentage of farm crops are dedicated to restaurants.  A reduction in restaurant business leads to crop waste, unplanted land, and serious cash flow problems for farmers.  Already living on the edge – smaller farms cannot withstand this loss of business volume.

[]         Fisherman:  The end consumer’s love of fish cannot sustain a fisherman’s need to catch and sell a quantity of product to offset their expenses.  Restaurants account for a large percentage of a fisherman’s direct or indirect business volume.

[]         Ranchers:  Have you noticed that the price of beef, pork, and chicken has increased significantly over the past few months?  Those processing plants need to cover their substantial operational costs now that restaurant business has all but disappeared.  If processing plants cannot find an outlet for their end product then this trickles down to the rancher who is saddled with cattle, pigs and chickens without a market.  The end result is reduced herds, increased cost of feed, land without sufficient grazing, etc., etc.

[]         Cheese Makers:  Cheese, although there are exceptions, is still a product with a shelf life.  When restaurants fail or reduce their product needs, then cheese makers must do the same.  Inventories wane, waste becomes a real concern, decreased cheese product means a reduced need for milk putting a strain on dairy farmers, and the lists goes on and on.

[]         Equipment Manufacturers:  Restaurant kitchens are home to some very expensive equipment – when sales volume evaporates then restaurants are faced with aging equipment that they cannot replace, and delays in opening new operations that require equipment purchases.   There is no other outlet for this specialized equipment.

[]         Breweries:  Sure, maybe consumers are directing their beer purchases to their local package store, but breweries know that this direct to consumer cycle is not sufficient to support their growing expenses.  It is the restaurant segment of their business that creates a steady flow of cash to support their endeavors. 

[]         Distilleries and wineries:  The same holds true for those who market distilled beverages, and of course the wine industry.  Restaurants are the mainstay of business for vintners both domestic and imported.

[]         Table Top Manufacturers:  Restaurants are constantly buying and replacing china, glassware, and flatware for their restaurants.  It is a business that is predictable and dependable – until purchases stop.  Every restaurant that tries to survive during these difficult times will commit to tightening their belts and deferring any purchases that are deemed non-essential.  Those companies focused on tabletop have found that their business has disintegrated.

[]         Local Musicians:  Musicians need to play.  That wonderful local talent that graced the stage in bars and restaurants, and at banquets and festivals no longer has an outlet.  There is literally no opportunity for them to play and earn a living.  The need to survive will have a long-term impact on the availability of live music for quite some time.  Musicians depend on the restaurant business.

[]         Florists:  Sure – florist shops do very well on Mother’s Day, Easter, and Valentine’s Day – but the rest of the year involves a full-time focus on weddings, banquets, reunions, anniversary parties, and daily restaurant floral displays.  When this business goes away (there are no conferences, large wedding receptions, business gatherings, or restaurant floral displays during the pandemic) then the florist is left with unsustainable cash flow.

[]         Linen Companies:  The vast majority of restaurants do not have laundries where tablecloths and napkins, and restaurant uniforms and side towels can be laundered, starched and ironed.  These restaurants rely on linen companies for this service as they rent all of the above.  When business dries up in restaurants – so does business disappear for linen companies.

[]         Wholesalers:  Those companies that collect, deliver, stock, and bill for essential ingredients in restaurants depend, almost exclusively, on restaurants for their business.  Unless they can change their business model and supply ingredients directly to consumers – then wholesalers are left with a greatly diminished amount of business volume.

[]         Clothing Stores and Uniform Companies:  Those local clothing stores take a direct and indirect hit from a faltering restaurant industry.  Directly – those clothing stores that have relied on providing restaurant uniforms have found that their business model is void of customers.  Indirectly, as fewer people take the risk of dining out and shelter at home during the pandemic, they also cut back on clothing purchases that they can display when enjoying a night at their local restaurant or bar.

[]         Coffee Growers and Roasters:  The direct to consumer market for coffee roasters is certainly important, and at some level the take out business and home brew option is still strong, but still a large section of their wholesale business has dried up as restaurants fail at an alarming rate while others have seen business volume decrease by 50% or more.

[]         Landlords:  Building owners have been a target during the pandemic as restaurants have found it impossible to meet the requirements of a lease.  In the end, the landlord also has to pay bills and when a restaurant defaults – they find themselves in a very difficult situation.  “Should we cancel a lease for non-payment and evict the tenant, or should we try to compromise?”

[]         Bakeries:  Most small to medium sized restaurants cannot afford the space or talent needed to produce their own breads and other baked goods.  So, they rely on local or regional bakeries for those goods.  Many bakeries have built their business model on this type of wholesale as their mainstay.  When restaurants fail – they take your local bakeries with them.

[]         Culinary and Restaurant Management Colleges:  With a decrease in the number of restaurants and significantly lower volume of business – there is far less need for those young, eager graduates.  Schools are experiencing dramatic declines in enrollment and challenges in job placement.  Every day brings another college program closing.

The list could go on and each of these listed businesses has their own eco-system of impacted operations.  The point is that that failing local restaurant is only part of the dilemma.  If we allow restaurants to fail, then we allow the entire ecosystem to fail as well.  If restaurants are financially healthy then the system works well.  Right now the restaurant industry needs help from the Federal government.  Without extended PPP benefits, bank loan deferrals, help for landlords, and business recovery training for small restaurants – this system will crumble.  Restaurants cannot wait until 70 or 80% of the population receives a vaccine.  Restaurants cannot survive until the fall of 2021, restaurants cannot continue to wonder from week to week whether they will be able to accept indoor customers or not and they cannot wait for politicians to find a way to talk respectfully to one another.  They need help now!  If this is not provided then an important part of our culture, a major employer of people, and the heart of the food ecosystem will not survive.   Write to your representative, speak your mind through the media, stand in support of your local businesses and do your part.  We have lost too much over the past 9-months; don’t add your local restaurants to the list.

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

Restaurant Consulting

www.harvestamericacues.com  BLOG

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