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June 04, 2020
Six Feet Apart with Alex Wagner
Restaurants

In This Episode

In a moment of profound unrest and unprecedented chaos, Americans are wondering what comes next. For citizens and businesses alike, this is a period of questioning, rethinking and rebuilding — sentiments that have been reflected in many conversations we’ve had over the last ten weeks. For the very last episode of Six Feet Apart, we look at what the pandemic has done to one of our social institutions, the American restaurant, to better understand what went wrong, how it might get fixed, and what happens to everyone in the meantime. First, Alex talks to Riley, a server in Nashville who is working shifts at recently re-opened local pub. Then she speaks with to Danny Meyer, the CEO of Union Square Hospitality Group, about what re-opening might look like in the country’s hardest-hit city, and the implications for the restaurant business on whole. And finally, she talks to Naomi Pomeroy, the chef and owner of the tiny, critically-acclaimed Oregon restaurant Beast, about might happen to an independent restaurant surviving on tight margins in a moment of crisis and reinvention.

 

 

Transcript

 

Alex Wagner: Welcome to Six Feet Apart. I’m Alex Wagner. Humanity is in a state of upheaval. On top of a global pandemic that shuttered economies around the globe, there are now protests for justice across the country, and widespread civil unrest. Americans especially are seeing systemic injustice and now they’re asking, how do we fix it? What comes next? If there’s one feeling that’s been common in all of the interviews for this podcast, from rabbis to basketball stars to carrot growers, it’s a profound sense of uncertainty about what the future holds. But also universally, there’s a real sense of responsibility to make sure that whatever we build next is a lot better and more equitable than what we have today. This is our last episode of Six Feet Apart. Before you shed a tear, it was never going to go on forever. And let’s be real, a lot of people ain’t standing six feet apart these days. We’re choosing to end the series focused on a part of our culture that very directly tells that story about uncertainty and resilience: restaurants. For some perspective, eating out is a four trillion dollar industry in this country, that is 4%of America’s GDP and COVID-19 has decimated restaurants. One quarter of the unemployment claims in April were for restaurant jobs. But more than that, restaurants are part of our social fabric. They’re where we relax and connect, where friendships are made and relationships are cemented, they are escapes and they are necessities, from the local burger joint to the white-linen birthday dinner, they’re part of our American way of life and it’s unclear what will happen to them, or at least a lot of them. How do restaurants survive in cities that remain shuttered? Who pays the lease? What happens to the cooks and servers and waiters? And how are restaurants and the people working in them getting by in cities that are opening back up? What does it mean to reopen and serve meals while trying to keep staff and customers safe?

 

Riley: We opened back up to the public about three weeks ago in compliance with the mayor’s phase one proposal. We essentially had remained open the entire time throughout the pandemic.

 

Alex Wagner: This is Riley, a server at a small neighborhood pub in East Nashville, Tennessee.

 

Riley: I personally didn’t feel comfortable returning to the capacity of our building. It’s just really small, the square footage is a little uneasy—virtually impossible to maintain social distancing where I work.

 

Alex Wagner: Are you guys wearing masks and our customers wearing masks?

 

Riley: Customers are not. We are. We’re—

 

Alex Wagner: Customers aren’t wearing masks?

 

Riley: No. A few. You’ll see a few.

 

Alex Wagner: Is the management offering you testing, is there any way to monitor who is well and who might be sick?

 

Riley: We were obliged to have our temperature taken at the start of each shift.

 

Alex Wagner: Right, but that’s completely useless if you’re asymptomatic.

 

Riley: Exactly. And also I, as far as I’ve been back, there haven’t been any temperature checks. And, yeah, all of our regular customers who are who are great people, but, you know, they’re back, no masks. People want to give us hugs, and we have to obviously decline. And I’ve had a few instances where people get disappointed and sort of behave that I’m being rude for not accepting a hug.

 

Alex Wagner: Wow.

 

Riley: I love hugs. I miss hugs. A year ago, I would, never would have believed that I would be saying today, resist the hugs. But I think people just really kind of lost sense of patience. You crave society sometimes, but patience is a virtue, Ill tell you.

 

Alex Wagner: It sure is.

 

Alex Wagner, narrating: So there you have the perspective of one person waiting tables in a state that’s open for business. Next, we’re going to talk with Danny Meyer, the CEO of Union Square Hospitality Group, which is the umbrella group for some of New York’s most famous and well-regarded restaurants, including Union Square Cafe, Gramercy Tavern, Maialino and Blue Smoke. He also founded the burger juggernaut Shake Shack, which now has locations across the country and which I find myself eating at all too often. Anyway. And then we’re going to hear from Naomi Pomeroy, the chef and owner of one restaurant “Beast” in Portland. Beast is a James Beard award-winning restaurant. It’s really small, with a fixed menu and communal dining, and it’s been closed for nearly three months. But before we get to Naomi, here’s Danny Meyer.

 

Alex Wagner: So, Danny, let’s start kind of at the beginning of this thing, when the virus first got hold of the US population and the closures began, you had to make some really difficult decisions, among them laying off close to 2,000 employees. Can you tell me about that, can you tell me about that day and making that decision?

 

Danny Meyer: That day was, it was gut wrenching, it was 35 years of building a team and saying that we put our team first even before our guests, and then dismantling the team. It just, it made no sense. And, you know, obviously, I don’t know all 2,000 of the people, but I know a whole lot of them and this is their lives. And it’s like this awful decision about do you, do you make a really tough choice today so that the business can be around to rehire people tomorrow? And that’s what we had to do. Look, here’s the thing, if we cannot be the restaurant you wanted to come to and in not being that restaurant, we’re losing more money that forces us to lay off more people—I just don’t want any part of that. I’d rather just put the restaurants to sleep for a while, which, of course, raises its own challenges because guess who’s got their hand out right now? Legitimately. The landlords.

 

Alex Wagner: Landlords. Yeah, that seems to be the biggest hurdle, right? Putting the restaurants to sleep, you still have to pay for the bed that they’re sleeping in, right?

 

Danny Meyer: Exactly. And we’re now coming on the fourth consecutive month where landlords are not being paid. And if they are being paid, just think about, just think about reopening with the kind of debt that that implies. It’s just, you know, this is something that no government program I’m aware of to date has confronted.

 

Alex Wagner: Yeah. Let me just talk a little bit about that experience, right, because as we talk about reopening, and some cities obviously have begun to reopen, I mean, people go to restaurants—of course, there’s a human need to be fed—but they’re going to restaurants to enjoy themselves, to escape from, you know, doing the dishes, eating at home. It’s supposed to be a pleasurable activity. Which is why I think a lot of people have, you know, understand where you’re coming from. Nobody wants to be sitting around in masks, not interfacing with humanity when that’s like the point of going out is to see other people, is to commingle with your fellow citizens, is to be part of a community that’s bigger than just your own household. And if that’s all taken away, then the argument for restaurant dining seems to evaporate.

 

Danny Meyer: Well, I think you make a great point. I’ve always said that the reason people go out to eat is it’s kind of fourfold, you don’t want to go shopping, you don’t feel like doing the chopping, cooking dishes, but you also are craving a social interchange and experience. Those are the things that restaurants can do. And I think that’s why restaurants put so much effort into what the decor looks like and what the music sounds like, in addition to what, you know, what’s on the menu and what’s on the wine list in the bar. You’re talking to somebody here with a New York City perspective and that’s not the same perspective as the entire country, not only because we got walloped with this virus more than anywhere else, but it’s also because I don’t think there’s another city in the country whose workers rely more on public transportation. So just getting your team to work, we’re not a city where people drive their car to work, and we’re not a city where people drive their car to go dine out.

 

Alex Wagner: Do you think that just having places that have become, I mean, for a lot of New Yorkers and people outside of New York, a lot of your restaurants are destinations for celebrations. They meet, they have sort of a meaning in people’s emotional lives. If there are not a place they’ve already celebrated at, their places that are sort of destinations for happiness, and by virtue of having your doors open in whatever capacity, that might be a much needed signal to a beleaguered city that, look, you can believe that there is a light at the end of the tunnel.

 

Danny Meyer: And I think that’s an important thing to take into consideration. Absolutely.

 

Alex Wagner: I mean, I think one of the things people don’t understand about the restaurant is that it’s an entire ecosystem. There’s, of course, the cooks and the servers, but there’s also the farmers and the florists and the people driving the delivery trucks. Can you tell me a little bit about the sort of echo effect of this pandemic? For example, what’s happened to the farms that you guys used to source your ingredients from?

 

Danny Meyer: Well, to the degree that they have any other means of distribution, like green markets, some of them are actually doing incredibly well. To the degree that that anybody relies on full service restaurants, they’re hurting. They’re hurting in a big way. There are many, many companies that have means of distribution through grocery stores. They’re doing OK. Farmer’s markets are doing OK. If you’re dealing with a fast casual restaurant, you’re probably doing OK. Not great. If you’re business deals specifically with full-service restaurants, you’re cooked right now. And that goes for all kinds of different businesses. And to your point, you know, one of the underlying challenges of our industry is that structurally we were in really bad shape anyway. The margins have been getting thinner and thinner in full-service restaurants for many years and the good news and the bad news is this: if the average full-service restaurant is now happy with a five to 10% margin, what that means is that 90 to 95% of every dollar being spent in those restaurants is going right back into the economy. And so to your question, if you take that out of the economy, that’s a whole lot of dollars that are just going away, poof.

 

Alex Wagner: So I guess the question, though, is if you look at those margins, you look at the rent, the cost of labor, the cost of food, especially if you’re sourcing from local sustainable farms where the production methods are a little costlier because they’re not quite at the same scale, it sounds like they’re going to be two tiers of restaurants, right? They’re going to be fast casual outlets that are either part of larger groups or if they’re, you know, smaller groups, they’ve survived because they had demand during the low period of the pandemic and the early reopening. And then the sort of upper tier of restaurants, which is fine dining establishments that are considerably more expensive than they already are, which is to say and a lot of respects inaccessible to a vast number of the residents of these big cities. That scares me.

 

Danny Meyer: It should. It should scare you. And the other thing that should scare you is, who’s going to want to be a resident of one of these cities in that scenario?

 

Alex Wagner: Exactly.

 

Danny Meyer: Because if you think about the the willingness that many of us have and the excitement to live in a big, dense city, it’s because we like what we can learn from so many people who do so many different kinds of things, who come from so many different walks of life. And we also like what it affords us in terms of culture, and culture is not only art museums and poetry and jazz concerts and Broadway theaters, it’s also the culture of people being with people. And if a lot of those things don’t come back, we have a real chicken and egg thing because it takes lots of people to have the density of cultural opportunities, but lots of people are exactly what all of these cultural opportunities cannot support right now because it’s dangerous to have all these people in one place. So, Alex, I think this is going to take a good two to three years before it sorts out. And I think that when we talk about higher prices for dining out, that likely will be the case in the near term. Now, it I hope, I believe New York will come back from this. I think New York has been hit a lot of different times. It’s been hit five times just since I’ve been a restaurateur—not like this one—but Sandy was not easy. 9/11 was not easy. Black Friday in 1987 was not easy. The Great Recession was not easy. I think there’s something magical about this place that is not going to be done in by this. And for those who are willing to kind of tough it out, restaurants will be back. And I’m going to actually bet that in three years’ time, maybe there won’t be 26,000 restaurants, but, the thing about restaurateurs, besides the fact that we are just hopeful—

 

Alex Wagner: Totally crazy people?

 

Danny Meyer: We’re crazy, hopeful, entrepreneurial people who stupidly think we all have a better idea about how to feed people and that’s irrepressible. That’s just not going to stop. And so I promise you that if we can make some really important reforms in terms of the underlying occupancy cost, and also in terms of how to pay people the right amount of money, I do believe this industry is going to come back.

 

Alex Wagner: Do you get the sense, is there any indication from landlords or people in real estate or people in the business community that you’ve been talking to, that there will be a sort of mass restructuring of the way New York City does its business?

 

Danny Meyer: I’m probably 40% hopeful, and that’s not great.

 

Alex Wagner: That’s more than zero.

 

Danny Meyer: That’s more than zero. I think that landlords are people, too, they have mortgages to pay, they’re not wholly responsible, their greed is not wholly responsible for where we are right now. And let’s face it, restaurateurs, it takes two to do a lease. And we all signed these leases with really, really high occupancy costs. On the other hand, it was against the backdrop of a really dense population with lots of tourism and a sense that we could make it work. And the rug has been pulled out from under all of us right now and so this dialog is going to sound something like this, it’s going to sound like:: you owe me four months of rent. And then the restaurant’s going to go: but I can’t pay, and if I if I have to, here are the keys, I’m out of here. And then the landlord is going to go: but who will I be able to rent this space to now? And the restaurateur is going to go: nobody, so let’s sit down at the table and talk. And they’ll either renegotiate or they’ll have a lot of empty spaces. And then you have a third player, which is either the city or the state government that has the opportunity via regulations and taxing power to either create a model where landlords can get some type of tax relief if they are willing to come to the table and provide rent relief. But that’s why I’m only 40% optimistic. I do know that we’re either going to face a massive number of vacancies, which is going to further accelerate either flight from the city or someone’s going to say, time out, we’re smarter than this, we can figure this out and we must figure this out for the sake of of the social fabric of our city.

 

Alex Wagner: Let me just ask you a personal question as we close this out, I would imagine that as a restauranteur with as many restaurants as you have, your days pre-COVID were spent, you know, you’re probably going around the city a lot. You were probably in a lot of kitchens or meetings. You’re probably eating better than anybody else that lives in New York City. What do you miss from those days?

 

Danny Meyer: I miss looking people in the eye. The whole person, not the person I see on Zoom. I miss, I miss the opportunity to give a hug to somebody and get a hug back. I miss the opportunity to smell the smells.

 

Alex Wagner: Yeah.

 

Danny Meyer: I really do. I miss, I miss the opportunity to learn from people by chance, meetings. Everything today is scheduled. There’s nothing that happens by happenstance today. And I miss the opportunity to travel because I learn a lot when I travel. So those things will come back. And today, the thing I like the most has been for the first time in my entire life, 11 consecutive weeks of family dinner with everybody around the table, and pitching in, cooking and doing the dishes and having meaningful conversations on most nights, not all.

 

Alex Wagner: Well, one day, Danny Meyer, we know those family dinners will be happening at one of your restaurants. Year TBD, but I’m sure they’ll be as delicious as ever. Thank you, my friend, for taking some time to talk with us about what’s going on.

 

Danny Meyer: Thank you, Alex.

 

Alex Wagner: Before we get to Naomi, we’re going to take a short break for a word from our sponsors.

 

[ad break]

 

Alex Wagner, narrating: And now here’s Naomi Pomeroy, the chef and owner of Beast in Portland, Oregon.

 

Alex Wagner: So let’s start at the beginning, Naomi. Do you remember the thought process leading up to the day you closed your restaurant?

 

Naomi Pomeroy: Yeah, I remember the thought process really, really clearly. I, and it’s weird because I don’t even have a good memory but it was just like, it’s sort of like when you get that phone call and, you know, someone that you love passes away or something like that, it just, it just kind of like it does weird things in your brain and everything sort of slows down. So I started texting with a couple of my restaurant friends and we were just saying, you know, to each other, like, well, what are you going to do? I don’t know, what are you going to do? And we said, you know, maybe we should get together. This is kind of funny because, of course, in hindsight, we thought we were going to be getting together with a group of like, you know, maybe eight people max and we were going to be in this big room so we could all be far apart from each other. And then we each told a couple of people who total a couple of people and then we ended up on Friday, March 13th, in a packed room, honestly, with probably about 50 to 60 local Portland restaurant owners. And fortunately, it was a big room. And like, listen, we washed our hands like crazy and I didn’t hear about anybody that ended up getting exposed that day. So that’s good. In hindsight, we had no idea that it was going to be like that or what the desperation level was going to be. Because, of course, at that time, you know, we really didn’t know how long this was going to last or anything, really, you know. I mean, I guess we still don’t in some ways, But, you know, that moment was a really eye-opening moment because the 13th of March, it was a very somber gathering and everybody was looking across the room at each other and I don’t think that anyone was crying, but I would say that it was like everyone was just sort of in shock. It was that silent wash of oh, my God, what are we going to do? And the worries and concerns were all the same. Like, how do we keep our staff safe? Like, how do we keep our customers safe? Like, what is our social responsibility as people who are in the hospitality industry? We’re here to serve people and we think of ourselves and our staffs like family, because we spend, you know, years together and we skip holidays to be together. I mean, my staff doesn’t, but a lot of staffs do. And we spend, you know, 14 hours a day regularly together. We all felt like we needed to shut our dining rooms down.

 

Alex Wagner: Yeah. And did you I mean, restaurants notoriously operate on razor thin margins. Did you have a sense that you were putting yourself in financial peril?

 

Naomi Pomeroy: Oh, not just a sense. I’ll be honest. I was already in financial peril, the slowest months of our year are always January, February and March. I feel as I’ve gone through the last couple of months of interviews and things like that, I feel much more comfortable being honest and saying that our margins are thin enough that, you know, even though I’ve been open for 12 and a half years, I mean, I run a profitable business and every year it ends up like, you know, our profit margins are like, oh, it’s like 10% this year, it’s 9 or it’s 12 or whatever. And as successful restaurant is just one that’s open. Let me just say that. And then, you know, beyond that, it’s I’ve learned that it’s OK to say and admit that for three months of the year, we lose money, for three months of the year, three to four months of the year, you know, we’re more in a break even zone. And for the other three to four months of the year where we’re really profitable. And we just have a very seasonal business.

 

Alex Wagner: Let’s talk a little bit more about how you’ve navigated this period, because, I mean, there’s just a host of people whose businesses depend on people coming in and eating. What’s happened to the people you used to source your food from?

 

Naomi Pomeroy: Wow. Well, it’s different for pretty much everybody you ask. You know, I got a call from one of my big vendors that I actually don’t buy food from because they’re a big corporation that I wouldn’t buy food from, honestly, but they I buy a lot of, like, plastic goods and things like that from them and they said that they had like open invoices in their department of like billions with a B. You know?

 

Alex Wagner: Wow.

 

Naomi Pomeroy: When everything closed down. So this is about ,like the the ripple effect is, not like I do want to talk about the small farmers and things like that, but it also is going out to affecting like big brands and businesses that have, you know, other producers and, you know, even factory workers and things like that that will be affected. We’re grateful for the fact that the unemployment was enriched by the federal government and, you know, everyone’s getting it, I think, I think most everyone has gotten their extra stimulus checks, which is like an extra $600 a week, which pushes people, you know, into the range of what they were making before so that no one is really taking a hit. And I think people are taking this time to live their lives, you know, but the real, I got to admit that the real scary thing is, is this, you know, I think it’s July 30th that those benefits run out. And I’m, that’s why I’m scrambling and trying to figure out how I can get the restaurant open again by August 1st, if possible, because we’ve got to figure out how to get all these people, you know, they would not be taken care of without that.

 

Alex Wagner: How do you get a restaurant back open? I mean, I guess that’s like the million billion trillion dollar question.

 

Naomi Pomeroy: Well, I mean, first of all, dude, right? It’s the billion dollar question. But my answer is you make it not a restaurant. I don’t necessarily know that just because it’s open, anyone’s going to come like. So the big part of all of this is, you know, we’ve been working really hard with our state and local governments to try to figure out a path forward that is safe for our staff, safe for our customers, and encourages people to come back out and visit. And the only way that we’re going to do that is by making sure that we create a set of plans that makes people feel very safe about coming back.

 

Alex Wagner: But is it kind of the economic reality, too, though? I mean, I guess you already operating such thin margins, if you’re only serving a quarter of the number of customers, how can you possibly survive? I don’t mean to be a doomsayer. I just don’t, my brain cannot wrap itself around the mathematics here.

 

Naomi Pomeroy: Well, nor should it, because the math is true and remember earlier when I said that restaurants that are, when they’re doing well, they’re like 10% profitable. If you do the math on that, like if you start, even if you reduce your staffing, if you start reducing capacity, it’s not going to be enough. To be honest, I’m not trying to fully pivot my restaurant into this new restaurant concept. I’ll tell you what. Like I’m pivoting to like, I’m saying, like, look, Beast is the way—old Beast is done. New Beast is probably going to be like a more of a market concept with, you know, a lot of provisions and, you know, probably some instructional videos that people can subscribe to and some, you know, mise en place kind of, you know, kits and things like that. I just, I’m trying to make a brand new thing that fits inside of a COVID world and it’s not a sit down restaurant. How do we stabilize our industry and make corrections to the things that weren’t working, you know, including diversity and accessibility, and like there’s a long conversation to be had. And I’m just glad to be, you know, a part of that.

 

Alex Wagner: I feel like there’s kind of two schools of thought about this moment. There are some people that look at everything that’s happened and happening and they’re like, we’re hopelessly broken. This is what the end of days looks like, what a dark and terrible decrescendo for America. And then there are other people who say this is the reckoning. And from the ashes we have to build something else. And the sort of uncertainty of that has not stopped the people who think that way from being, in a certain, in like a weird and intoxicating way, being very optimistic and hopeful about what’s possible. And it sounds like you’re more in that camp, the latter camp, than the former camp.

 

Naomi Pomeroy: Yeah, big time, I mean, look, you know, on a personal level, you know, in the same year in 2005, I closed three restaurants. I was, you know, I was only 30 and closed three restaurants, had to let go of 95 employees, became a single mother like, you know, declared bankruptcy. Like, this shit story. And then I somehow, like I made Beast like right after that. I was just like, God damn it, like I’m going to do this. And I think that I feel a little bit more comfortable navigating this unknown time because I’ve navigated an unknown time before and something great happened out of it. So I don’t want to over silver lining this because I don’t believe in that either. Right? Like, we have to be real. There’s some real fucking terrible things going on and we just need to make sure that we’re keeping our eyes open to like, how can we be better? Because I think that’s the answer. Right? Like, I think it’s the answer across everything is where did where did we go wrong, what got us here, and how do we make a new thing that’s a better thing. So, yeah, I am all about that. Like, this is our moment. This is our moment of reckoning and we have the ability to answer powerfully and to listen and to wait for, you know, the what’s next to allow new voices to contribute. Like, I look, I’m, frankly, I have to admit it. I’m excited. I have to just say that. I am actually excited to redo my thing and to have new conversations and to educate myself. You know, like, I just, I’m a, I feel like a newborn baby.

 

Alex Wagner: That’s fucking awesome. You know, this is our last podcast in the series and a lot of them have been pretty sad endings. But I’m going to, I’m going to drop the mic or let you drop it on the feeling of being a newborn baby, because that is a powerfully optimistic sentiment to leave our listening audience with. Naomi, good luck on everything. We will be searching out provisions from Beast this summer, I know it. May you make money hand over fist.

 

Naomi Pomeroy: Thank you. Thank you so much. Thanks for having me. This was super fun.

 

Alex Wagner: That’s all for this podcast. If this is the first one you’ve ever listened to, please go back and listen to the other ones because they are all awesome. And if you’ve been with us for all 10 episodes, thank you for listening. We hope the series has given you insight into the hidden worlds of this pandemic, but also the ways in which we are still, against all odds, inextricably connected, even from six feet apart.

 

Alex Wagner: The show has been produced by Alysa Gutierrez and Lyra Smith, who is also our story editor. Our executive producer is Sarah Geismer. Special thanks to Alison Falzetta, Stephen Hoffman and Sidney Rapp. Thanks for listening and as always, stay safe.

 

Six Feet Apart with Alex Wagner