It takes grit, perseverance and really great food to stay afloat in the restaurant biz today. An appetite for calculated risk-taking doesn't hurt, either.
"Four weeks out from the launch, bookings were not strong and I was really worried," says James Viles of the "pure business decision" to open a month-long, city pop-up of his acclaimed Bowral fine diner Biota, one of the restaurants in line for inclusion in the Financial Review Australia's Top 100 Restaurants Awards, to be announced on Monday.
Then, suddenly, the website lit up, and Viles served 1500 people over the first 16 nights of Biota Chippendale. Now there are 200 on the waitlist for the bold dining experiment, which wraps up on July 11 .
"And not one of those people saw a menu before they booked," says Viles.
Uber Eats delivers an order from Biggie Smalls to another hungry stay-at-home diner.
Kristoffer Paulsen
It used to be so easy to run a successful restaurant. All you had to do was cook (really well) and look after people (really well). OK, so maybe it wasn't so easy.
But it was simple. Straightforward. Today, restaurateurs have to juggle wafer thin margins – out of every $30 we spend on eating in a cafe or restaurant, the operator makes an average profit of 60c, according to Restaurant & Catering Australia – and get creative across all aspects of their business.
There are many, many options for those seeking to build a brand while staying across the bread and butter of running a hospitality business. They include home delivery platforms, opening a casual spin-off (burgers anyone?) running special offers – such as BYO nights, happy hours and guest chef events – adding a bar element to an existing space or opening a new bar space. Then there is data mining via social media and those home-delivery platforms, the celebrity route – writing a cookbook or getting on TV – or perhaps signing on to a frequent diner program. Some take the green option by, perhaps, introducing a zero-wastage policy and/or other sustainability measures. You can team up with others in brand partnerships – coffee and kitchen appliances are popular – or work with cruise ships. And then there are the many and varied ways of getting people to sit down, like doing two or even three sittings a night, taking bookings or not taking bookings, or introducing a ticketed meal system so you can charge diners in advance.
Online shopping
Biota's James Viles chose that last option for his Sydney pop-up. The event required up-front payment through a website, modelled on the Jetstar platform, that gives diners the option of adding extras, such as mudcrab ($125) or truffles ($45).
Owner chef Shane Delia at his Maha restaurant in Melbourne.
Eddie Jim
"Last week we sold 30 crabs," says Viles, clearly chuffed at the response so far to his big-commitment, brand-building and data-mining exercise.
"We saw it as an experiment in finding out about people's spending habits," he says.
"It's the online shopping [part] that people seem to enjoy. You can just click away, it's fun, it goes on your credit card and then you forget about it."
Viles also kept labour costs under control at the pop-up by ordering in pre-mix cocktails from cult Melbourne bar The Everleigh, thus cutting down on the number of bar staff required.
Staffing, however, is not the biggest challenge Viles faces back at home base in the Southern Highlands. That would be tourism.
"There's been a big influx of eateries around Bowral – which is great, we don't see them as competition – but local tourism bodies are not doing enough to drive visitation to the area," says Viles.
Logistical challenges
Melbourne chef Shane Delia is another who undertook a bold business experiment. Late last year, he opened a series of "dark" kitchens – that is, kitchens not attached to a restaurant with sit-down diners. Encouraged by the rise of Uber Eats and other delivery services, Delia planned to service demand in the inner and outer suburbs for his successful kebab brand Biggie Smalls.
About a month ago, he closed all seven of them.
"There were hidden issues and a lot of logistical challenges that weren't apparent at the outset," says the hard-working chef.
Echoing many in the industry, Delia says commissions charged by the platforms – ranging up to 35 per cent – are "quite aggressive".
"I'm an advocate of [food delivery] platforms but the industry needs to get a slice of the pie as well."
The chef's entrepreneurial spirit was also behind his decision to sign up his newly renovated CBD fine diner Maha to Liven, the cryptocurrency app launched in Melbourne and Sydney last month.
Billed as a frequent diner program aimed at getting people off their couches (where they're eating home-delivered food and drinking mark-up-free wine) and back into restaurants, Liven is a digital currency wallet that allows customers to receive up to 25 per cent of their bill back in the platform's native currency LivenCash.
"It's streamlining payments at Maha and it works well for the customer," says Delia. "It's easier than having staff lug around an Eftpos machine and there's also a lot of data exchange with the app so we get the information we need to tailor our offer."
Create an experience
Technology may be the medium, but the message is that in order to survive in such a bruising industry, restaurants today need to create an experience, not just somewhere for people to eat and drink.
"Hospitality is such a knife-edge business now," says Martin O'Connor of the Adelaide-based MOCO Restaurant Consultants.
"On the one hand you have to make people happy – and customers have such high expectations – but if you don't have good business sense as well then you just won't survive.
"For example, you need to make your margins on booze [rather than food], but you can't gouge people on mark-ups; then they just won't come back. It's a knife-edge."
O'Connor says his clients' single biggest issue is staff, and the government's recent crackdown on 457 visas – further restricting the flow of skilled talent into the country – has only made the situation worse.
"Basically, it's made hiring staff from overseas more complicated, more expensive and more drawn out," says O'Connor.
If there's a silver lining, he says, it's that the crisis has inadvertently shone a light on the need for more training and development.
"Places like ICHM (the Adelaide-based International College of Hotel Management) are great, but we need more of them."
The solution could very well lie close to home. Terry Durack, co-director of the Financial Review Top 100 Restaurants Awards, says big restaurant groups such as Merivale and The Star in Sydney are responding to the staffing shortfall with huge investments into their own internal hospitality training systems. "That's because they can see it's going to be easier to train their own skilled staff than to pay ever-higher wages for the existing pool of talent," he says.
Go very big or very small
The rise of the big restaurant group has itself been a response to economic conditions. As co-director of ATR Jill Dupleix points out, the best chance for survival today is either to go very big – or very small.
"It's probably the ones in the middle that are being squeezed the most," she says.
"Small" is adopting some novel forms. It can mean opening a wine bar or cafe rather than a full-service restaurant; it can mean specialising in one thing and doing it well, such as the solely seafood eateries Saint Peter in Sydney and Iki Jime in Melbourne; it can also mean going very niche, like the new Bistecca in Sydney, where the only thing on the menu is one cut of meat (bistecca alla Fiorentina).
Then there's the return of the ma-and-pa restaurant model. Says Durack: "Small, modest places opened by highly committed couples such as Josh Lewis and Astrid McCormack at Fleet in Brunswick Heads, and Rodney Dunn and Severine Demanet of The Agrarian Kitchen Eatery in Tasmania."
"I think their successes are inspiring and motivating more chefs and front-of-house teams to consider going out on their own," he says.
One couple who went out on their own more than 15 years ago is Giovanni Pilu and Marilyn Annechini of Pilu at Freshwater on Sydney's northern beaches.
Gap in the market
This weekend Pilu is opening AcquaFresca, a casual spin-off of his feted fine diner, at the redeveloped Harbord Diggers Club.
"I've often been asked to open other venues," says Pilu. "But we're a family business, I need to be in it 99 per cent of the time."
The new venue ticked two boxes: it was five minutes' drive from Pilu's home and there was a gap in the market for a smart, casual, neighbourhood eatery.
"It's pizza, pasta, it's quick and you can bring the kids," says the Sardinian-born chef, who says fine dining has become harder in the past couple of years.
"The hardest thing is finding staff. And the cost of produce," Pilu says
"But I love fine dining, and we enjoy the challenge."
Scaling your brand isn't an option open to everyone, though. How, then, do you get yourself trending on Instagram?
This imperative may explain the surge in special offers and events now flooding the in-boxes of anyone even loosely connected to the hospo biz.
Like Magnum Mondays at Melbourne's Lee Ho Fook (BYO magnum for no corkage and prizes!), Dumplings for Dating nights at Oriental Tea House (like Tinder with green tea), the new bento lunchbox at Kisume, and Farm to Fred's, the eco-chic Saturday breakfast offer at Fred's in Sydney, where you can nibble on housemade pastries and buy a box of just-picked fresh ingredients from Sift Produce at the same time.
Away from the modern necessity to produce a beautiful set of online numbers, it's nice to know that in restaurants, as elsewhere, some things stay the same.
Shane Delia, whose restaurant Maha recently celebrated its 10th anniversary, sums it up.
"Just because it's Instaworthy doesn't mean it's going to succeed," he says. "There's no loyalty in social media.
"I would say to anyone starting out in restaurants today that it's really important not to forget the fundamentals of hospitality.
"The worst thing you can say to a customer is 'no'."
Source: Financial Review
