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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Current Events

At The James Beard Awards, Diverse Winners Stood Proudly

In 2004, I’m a little embarrassed to say, I went to the AVN Awards in Las Vegas. To those unfamiliar, it’s the Academy Awards of the porn industry. Yes, I said porn. Don’t judge. Though I’m certainly no novelist, I had an idea for a novel at the time that involved a road trip and a porn star, so I took a week off my restaurant job to find some inspiration on the road. I hopped on a dingy Greyhound bus with a notebook and traveled across the country, culminating with my walking the red carpet at the Porn Oscars. (Spoiler Alert: I still haven’t published a novel.)

The experience inside the auditorium at the AVNs was not at all what I expected. Though the categories were almost laughably raunchy and uncomfortably specific, no matter who won, the acceptance speeches almost always centered around the commitment to producing excellent work. The seriousness with which the winners spoke about the craft of working in adult entertainment left me feeling differently about pornographic films and the people who make them.

I thought of my trip to the AVNs this week when I attended the James Beard Awards at the Lyric Opera in Chicago. Restaurants have also become a form of entertainment that requires an enormous amount of self-abasement from the people who perform in them—not all so different from porn, to be candid. (Full disclosure: I served on this year’s Awards committee for Restaurant and Chefs for the first time.) As a restaurant worker for two decades, I always feel at home in a room full of restaurant people but, on this particular night, it felt more like the room where it happened.

As an attendee, I’d like to share a few observations—independent of my work on the Awards Committee—because the feeling in the theater on Monday is something we should be working tirelessly to recreate going forward.

The talk on stage of improving our industry may not necessarily have been new, but the voices on stage certainly were. The years of the James Beard Awards marginalizing chefs of color gave many of these statements a nervy quality that felt like a pressured champagne bottle being uncorked with a quick rip. Notable chefs, like Cristina Martinez of South Philly Barbacao in Philadelphia who won for Best Chef Mid-Atlantic, delivered a portion or all of their acceptance speeches in languages other than English.

Martinez, who is openly undocumented and a champion for the rights of undocumented immigrants, spoke slowly and carefully about the immigrant labor that fuels restaurants across America. You didn’t need to understand a word of Spanish to follow her speech. Others, like Mashama Bailey, who won the national award for Oustanding Chef, highlighted the importance of diversity while being among the few women and chefs of color who had ever won a national Beard. “Today a little Black girl or a little Black boy can see themselves as a future Outstanding Chef,” Bailey told the audience.

James Beard Awards Winner Mashama Bailey
Mashama Bailey of The Grey in Savannah accepts the award for Outstanding Chef

By the middle of the presentation, the elephant in the room was stampeding down the aisles, letting out piercing wails with its tusks rearing skyward. Alerts on our phones announced a tornado warning outside, borne from a fleeting but violent storm that seemed to come out of nowhere. Emergency notifications buzzed like angry locusts throughout the theater as the lights came down. The two events didn’t feel coincidental at all. A storm was brewing inside, too.

Despite the innumerable challenges of the past few years that have decimated the restaurant industry, winner after winner stood tall and spoke proudly of their perseverance. They stressed the importance of improving the work environment for their employees, addressing endemic abuse in the kitchen, acknowledging immigrant labor, and ameliorating longstanding racial and gender imbalances. 

What I saw, however imperfect (as all awards programs inherently are), points to the potential future of what culinary recognition can look like. In the past, I’ve been a vocal critic of the JBF Awards and have argued that the gratuitous pageantry undermines the important work of chefs by turning a supportive community into a competitive one.

But with a more mindful charter and the stewardship of a more diverse community of people committed to deliberating mindfully, medals should end up around more deserving necks. Chefs like Erick Williams of Virtue in Chicago, who spoke eloquently after winning the award for Best Chef: Great Lakes of the many great Black chefs before him that the James Beard Awards have ignored. “I didn’t get here of myself or by myself, “ Williams said, “I got here by way of my community, by way of my culture, by way of my family, by the way of many trailblazers that were looked over, that were discarded and that were discounted. That allowed me to have a path … and the confidence to produce food day in and day out that feeds the mind, heart, spirit, and soul.”

There were other moments that felt like unchartered waters. Robynne Maii, the chef of Fête in Oahu—who seemed to glide onto the stage wearing a woven crown like the goddess Athena—won for Outstanding Chef Northwest. It was Hawaii’s first win in the regional category in nineteen years.

Sean Sherman of Owamni in Minneapolis accepts the award for Best New Restaurant

Owamni, the community-minded Minneapolis restaurant that celebrates indigenous cuisine, took home the Award for Best New Restaurant against much bigger names from much bigger cities. The night wasn’t without white winners, of course, but—at least this year—their wins felt somewhat deflating. We were happy for them, but maybe not quite as happy. If there were any gatekeepers present, they were having trouble finding their gates.

Perhaps the exception was Chris Bianco of Pizzeria Bianco in Phoenix, who was awarded Outstanding Restaurateur. Bianco was emotional, as we all were. He stammered a bit, struggling to find the right words to describe how it felt to be a part of an industry he so deeply loves. “I started a pizzeria in 1988,” Bianco said, “I didn’t know what the fuck I was doing then, and I don’t know what I’m doing now. But what I do know is that I’m grateful.”

He welled up as he introduced a Black colleague who joined him onstage and explained how this gentleman had started working with him twenty-five years ago, eventually becoming a partner in the business. As Bianco left the stage, the two embraced, and you could feel the brotherhood, earned over two decades of blood, sweat, and tears. It didn’t really matter what color any of us in the audience were. We all wanted more of these stories, and it felt good to celebrate so many different flavors that we knew were all delicious.

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