Current Events

Noma And The Broken Economics of Restaurants

René Redzepi stunned the food world this week when he announced plans to close his Copenhagen restaurant, Noma, in 2024, citing the financial and emotional toll of running a restaurant that apparently can’t sell enough $800-a-head tasting menus to turn a profit. It isn’t the first time Redzepi’s closed his iconic restaurant. He shuttered Noma in 2016, relocating his entire staff to Tulum for a lavish pop-up, before reimagining the restaurant in a new space in 2018.

“The style of fine dining that Noma helped create and promote around the globe — wildly innovative, labor-intensive and vastly expensive — may be undergoing a sustainability crisis,” Julia Moskin reported for The New York Times. When Redzepi, one of the most highly decorated chefs in the world, is telling you that restaurant economics are broken, they’re really fucking broken.

“What this news signifies to me is a flashing warning sign for the end of global fine dining,” former Food & Wine Editor-in-Chief Dana Cowin told Bon Appetit, “If Redzepi can’t make it sustainable, who can?” The answer to that question of course is: Who cares? The food media has been scrambling to understand if Noma’s closure is sounding the death knell for high-end restaurants. But we should be worried that Redzepi’s decision portends something much worse — an existential crisis for dining itself.

A beetle made of fruit leather is a course at Noma

It’s hard to feel sympathy for Redzepi, who’s been surfing the frothy waves of cheffy stardom for decades. Jaya Saxena wrote for Eater about the difficulty in mourning a restaurant that most of us will never visit. “I won’t be sad because the window is closing to eat reindeer brain custard,” she writes, “while worrying I’d accidentally be too loud and ruin the near-holy experience some guests considered it.” Saxena gently reminds us that Noma never really existed for the proletariat. Redzepi’s restaurant and its luxurious forbearers, like Ferran Adrià’s El Bulli (which closed in 2011 after incurring massive losses), have pushed the envelope for creative cuisine, but they’ve also pushed it for extra-terrestrial prices. “Everything luxetarian is built on somebody’s back,” Finnish chef Kim Mikkola told the Times, “Somebody has to pay.”

Noma’s looming closure illustrates that even with affluent clientele, a massive waitlist, and a menu that costs as much as a round-trip ticket to Copenhagen, a restaurant’s balance sheet can still be in the red. Reporting for the Financial Times earlier this year, Imogen West-Knights unearthed some of the nasty secrets about how Redzepi has kept Noma afloat all these years. Her report details how Redzepi and other fine dining chefs rely on a steady supply of unpaid stagiaires to do hours of grunt work like assembling intricate edible beetles made from fruit leather, tasks that contribute little to their culinary education.

West-Knights writes:

“In fine-dining restaurants, two stories are being told. The first is in the dining room, a perfectly choreographed show of luxury and excellence, a performance so fine-tuned, down to the décor, the staff uniforms, the music, the crockery, that in some ways the food itself is the least important element. And then there is the story that you, as a diner, are never supposed to hear. The story of what happens on the other side of the kitchen wall.”

Redzepi didn’t create the stagiaire system, the French did (as Jeff Gordinier points out in a sympathetic essay for Esquire). But we should expect more from the chef of a “World’s Best Restaurant,” even if a post in Noma’s kitchen still carries enough currency to entice ambitious young cooks to work for Redzepi pro bono. Now that the curtain has been raised, however, these exploitative practices are harder to hide and impossible to justify.

Among the many things the dining public doesn’t understand about how restaurants work is the misconception that all busy restaurants are profitable. Being denied an 8pm reservation at one of your favorite places does not mean that the owner of the restaurant is making a killing. In fact, having a full dining room during prime-time hours is the bare minimum of what restaurants need to do to survive. People are so often flummoxed when their favorite places close. “It was always packed!” they’ll say. Somewhere, a Noma regular with a fat wallet is thinking the same thing.

As Saxena points out, though, dining at Noma has always been out of reach for most people. But its closure is still a cautionary tale, if not the canary in the coal mine that died of smoke inhalation. It’s easy to argue that there’s never been a more challenging time to own a restaurant business than in the past three years since the pandemic began. But Americans are adept at sweeping trauma under the rug when it helps clear the path for unimpeded commerce. We see what we want to see. When the price of eggs goes up a dollar, we don’t care to understand why. It’s our God-given, American right to complain about it.

All this makes it easy to forget that at the onset of the pandemic, over 100,000 restaurants in the United States closed overnight. Millions of hospitality workers lost their jobs, and many of the restaurants that employed them never reopened. Of course, we’ve come a long way since then in the rebuilding process, but the wounds haven’t even come close to healing. Most restaurants, without the cache of a world renown chef and a dedicated fermentation lab, have scars that run much deeper than Noma’s. But it’s always been in the industry’s DNA to conceal the chaos behind the curtain. We’re trained to absorb trauma ourselves, and we go to great lengths to shield our guests from the less glamorous aspects of operating a restaurant, including going broke.

According to the POS company Toast in its Q2 Restaurant Trends Report issued last summer, restaurant sales have returned to pre-pandemic levels. However, a closer look at the trajectory of sales figures over the past few quarters shows revenues flatlining, which is a cause for concern for many small restaurant businesses. A more recent report from analytics firm YipitData shows that year-over-year restaurant sales growth decelerated throughout November, breaking its 3-month accelerating trend (see chart below). Independent restaurants are feeling the pressure. According to Nation’s Restaurant News, more than half of the country’s independent restaurant owners couldn’t pay their rent in December.

Analytics firm YipitData showed slowing year-over-year growth in November

In the wake of the pandemic, Americans are ordering food delivery at a much faster clip which makes traditional brick and mortar businesses with dedicated space for in-house dining too expensive to operate. As a result, restaurant footprints are shrinking, and ghost kitchens are creating even more distance between us and the people cooking our food. The public treats restaurant delivery the same as it does cheap goods on Amazon — instant gratification, one click away. Aggregators like DoorDash and UberEats are designed to remove as much friction from the ordering process as possible. But these technology companies make terrible romantic partners. They’re parasitic by nature, lowering customer acquisition costs for small restaurants in exchange for exorbitant transaction fees.

The truth is that restaurant economics have been damaged for a long time, but the pandemic broke the spokes off the wheels. Demand for restaurant food has been durable, but input costs are skyrocketing, and price sensitivity is high. In most major cities, the startup costs to open a new restaurant create a barrier to entry that’s nearly insurmountable without deep-pocketed investors. This contributes to a non-virtuous cycle of privilege. Despite the widespread effects of social movements like MeToo and Black Lives Matter, the underlying economic forces still favor white male chefs and milquetoast corporate concepts.

But we shouldn’t be looking at restaurants like Noma or chefs like Redzepi for sustainable templates for longevity. No one can deny Redzepi’s influence in the culinary world. But he’s still dedicated most of his career to lathering up the rich with absurdly expensive, tweezered food. There’s never been anything sustainable about doing that for two decades, yet Redzepi is treated like a messianic figure by the food media.

René Redzepi Noma
Redzepi proudly displays his giant mushroom

One important thing Redzepi is telling us, however, that we should listen to is how physically and emotionally draining it is to run a restaurant. It’s a common feeling among restaurant owners across the world right now, but we’re too busy sulking about Noma to notice all the other bodies piling up. Andrew Zarro decided to close his coffee shop, Little Woodfords, in Portland, Maine, after coffee prices doubled. In his eyes, the hospitality industry never recovered from the pandemic and customers are in denial about the challenges that businesses like his are facing. “If something doesn’t happen to intervene,” Zarro told the Portland Phoenix, “we’re only going to have large-scale chains or franchises. Portland might end up looking like any other city in America.” While coffee shops like Little Woodfords are closing all over the country, the local Starbucks, likely, is not.

The dining public needs to start accepting the true cost of high-quality restaurant food and taking a more active role in helping foster a healthy restaurant landscape. This means patronizing restaurants that pay staff fairly and support the community. Consumers who buy cheap goods on Amazon every day can’t expect local businesses to flourish when they can’t compete with Amazon on price. It’s the same for buying $10 Chipotle burritos. We don’t get to have the mom-and-pop Mexican place that sells delicious burritos down the street, if we aren’t willing to pay $15 for one. Every Chipotle purchase is another nail in the independent restaurant’s coffin.

In some ways, we’re all responsible for the house of cards the restaurant industry has become. We shrug our shoulders when we walk by the shuttered store fronts of long-standing pillars of our community and get excited when they become Paneras and Chik-Fil-As. At the end of the day, the restaurants that surround us reflect our values and our communities. We’ve been selling our soul to the wrong kinds of restaurants for a long time, which makes life very difficult for the right ones. Meanwhile, our insatiable desire for on-demand food is poisoning the commercial landscape and reshaping the contours of Main Street U.S.A. The longer we ignore that, the more ghost kitchens will turn our city centers into ghost towns.

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The Service Bar

When Is a Dive Bar Truly a Dive?

In July of this year, Rolling Stone published an article about pop star Olivia Rodrigo’s impromptu performance at a “U.K. dive bar” called Bunny Jackson’s. The meticulously branded Manchester club is slathered in tropes of Americana: bourbon, cheap wings, and an unhealthy obsession with corrugated siding. “I’m dead sober,” Rodrigo told the audience, seemingly self-aware of the strangeness of this moment set against the dive bar backdrop. Must a person be drunk to be in a dive? Of course not. But the comment seemed to underscore the awkward tension between Bunny Jackson’s shabby-chic marketing scheme and the hard-won authenticity of an earnest dive.

The question of self-defined dive bars came up for me again in September when Food & Wine published an article titled “NYC’s First Sober Dive Bar is a Very Good Time.” A video on the magazine’s Instagram page shows off a quaint and kitschy Manhattan spot with bar mats branded by Aperol Spritz and Deep Eddy Vodka, despite having a back bar stocked exclusively with non-alcoholic spirits. These alcohol-free products have become a legitimate part of the conversation for most serious bar programs in America, but there was something about the “sober dive bar” moniker that I found grating. Again, it wasn’t the focus on sobriety that bothered me as much as its using the allure of a dive as a marketing ploy. Whether a sober space lends itself to being a dive bar is probably a much larger conversation.

To be called a “dive bar” is a dubious honorific. The title appears to have originated from the eponymous Dug’s Dive, founded sometime in the early nineteenth century in Buffalo’s Canal District by William Douglas, or “Uncle Dug.” It was a filthy and often dangerous place by today’s standards, but it was also a place of refuge. Dug, a former slave, was known for providing food and shelter to Black men in need. After the passing of the Fugitive Slave Act in 1850, that need could be very real, and “dives” like Dug’s were places where the well-heeled were unlikely to travel and police would pay no mind. This act of charity and community along the fringes of polite society unknowingly set the foundation of what would define dive bars in the modern era.

dive bar street view

Dive bars are deeply loved institutions, regularly full of passionate patrons who have a sense of individual ownership of the place. Like most tribal environments dive bars can be moderately unsafe to outsiders, with their own customs that normal bars might not abide. And while assaults, theft, and occasionally worse can happen at dive bars, they rarely happen to members of the community who occupy them. As a bartender, I once admonished a young man that I’d cut off who was on the verge of doing something about it: “If you try to jump over this bar, either I’m going to get you,” then I nodded to the room full of regulars who had all grown quiet, “or they will.”

What marketers, trendsetters, and even many bar owners fail to grasp is that a “dive bar” is more than an aesthetic. It’s not something that can be papered on the walls or adopted by fiat. No amount of corrugated siding, expired license plates, carved initials, or sliced-up posters and stickers will turn a regular bar into a dive bar. A popular magazine can’t simply anoint a trendy new concept a subspecies of dive. In fact, the moment a place is written up as a “great dive bar,” its dive bar credentials suffer until, after a couple of months when tourists invariably grow tired, the regulars return.

There are no great dives, no new dives, no sober dives, no all-ages dives, and certainly no fucking cocktail dives; there are simply dives. Does the beer taste a little warm? It’s probably because the keg cooler has been begging for a new compressor for years, but the owner just needs to get through the next payroll. Your glass has a chip? Drink around it. If you insist on telling the bartender, wait until you order a new round, so they don’t just refill the same pint. But be warned that the next glass might be coming hot out of the dishwasher. You get what you get in a dive bar.

Like the people who inhabit them, dive bars don’t care what you think and only nominally care about what you want. Depending on the day they may be too tired, too old, or simply too hung over for your shit today. This is probably why so many bartenders occupy dive bars during their off hours. For people who clench their teeth every day at work serving clueless twenty somethings, indecisive bachelorette parties, creepy old men expecting a smile, and bros demanding shots then fumbling with their wallets when they hear the price, we sometimes need a break. We find respite existing in places that don’t suffer fools, where decorum is defined by minding your own business. Dive bars are places, perhaps the only places, where we know we can be pensively silent or absolute goblins entirely without judgement. If bartenders have safe spaces, they are dive bars.

Please bear this in mind when your excitable friends say they’re taking you to a great dive to get you out of your shell after a breakup. Because they are not. They’re taking you to a regular bar. With all due respect to your friends, dives aren’t for breaking out of shells, they’re for getting cozy within them.

dive bar bathroom wall

Earlier this year, Miller High Life collaborated with an alcoholic ice cream brand called Tipsy Scoop to release a small run of “High Life Ice Cream Dive Bars.” The 5% ABV ice cream is flavored with actual High Life beer, chocolate, caramel, and a peanut swirl, to evoke that “distinct sticky dive bar floor feeling.” A sprinkle of carbonated candy emulates the spritz of a freshly drawn pint of shitty beer. I normally try to avert my eyes when niche companies and ad execs for beverage monoliths pander for press, but this one got under my skin. “Who wants to lick the carpet where Jerry pissed himself?” I wondered aloud.

It’s unfair to pigeonhole dive bars as purveyors of inferiority. In truth, some dives offer delicious meals at prices so low it’s hard to comprehend. They’re irreplaceable domains of local culture where income, social status, fame, and everything else don’t matter for at least the time you spend within their four walls. They’re great equalizers. The staff of a dive loves the bar like it’s been in their family for generations, and there’s a good chance it has been. The regulars of a dive have been coming to them since they could drink. If they moved away, they never fail to return on a visit.

Popular non-dive bars have a different culture. They’re where you go to be seen, to experience a new trend, or to impress a client or a date. Sometimes they’re just where you go to have a great time and watch the game. Not being a dive bar does not make a place lesser. But dive bars have history and community. They’re where a person can turn when they have nothing and need a place to be. They’re bars where your mother can point to the corner stool where your grandfather always sat. They’re the keepers of the “remember when.”

About ten years ago a journalist for a local publication asked me where I liked to go to drink, and I answered honestly. I told him about the dive that I spent a couple of nights a week at, where I knew I would never see a regular from my bar and rarely even another bartender except for those like me who were chasing the sunrise. I regretted it. It was uncomfortable to see this place, with the felt on its pool tables shredded and its stage for shows little more than a stack of combo amps, spin through a culture rag. Because it already had a culture, and it didn’t need a new one. When its building was finally sold, demolished, and rebuilt into a glass-walled coffee shop, I promised myself that I wouldn’t do that again.

Because dives deserve to exist, to flourish, and sometimes to be torn down to their foundations based on their own merits and existing as much as they can by their own rules. We lessen them, and to some degree ourselves, by asking them to be something different.

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