South Florida Sun-Sentinel (Sunday)
‘Leaner and meaner’
5 ways South Florida restaurants will adapt, survive and evolve
More fine-dining restaurants will die in 2021. Takeout food will blowup, restaurant menus will slim down, virtual eateries will multiply and outdoor patios — considered prime dining real estate— will expand. And don’t expect masks or sanitizer to disappear from dining rooms anytime soon.
How do we know this? Answer: It’s already happening. The pandemic has already caused over $1 billion in revenue loss in Broward’s hospitality industry, and the first widespread use of COVID-19 vaccines is months away. Until South Florida is inoculated, restaurants will get smaller and scrapper as they fight for survival.
We spoke to hospitality industry experts, restaurant owners, consultants and economics professors about how South Florida’s restaurant industry will evolve in 2021.
Here are five ways restaurants will rebound.
Fine dining: Adapt or die
More high-end restaurants are going to close unless they reinvent themselves.
Fine-dining spaces that depend on tourists and part-time residents— and most do here — will see fewer dine-in customers until a vaccine is widely distributed, says
Michael Cheng, dean of Florida International University’ s Chap lin School of Hospitality and Tourism Management.
“Unless they’re flush with capital those fine-dining restaurants you haven’t seen open since March probably won’t reopen again because they didn’t try to adapt early on,” Cheng says. Fort Lauderdale restaurants Jackson’s Prime, Valentino Cucina Italian a and Chuck’ s Steak house were early victims this spring.
“The pandemic was the final nail in the coffin,” adds Todd Herbst, whose West Palm Beach-based Big Time Restaurant Group runs Louie Bossi’s and Rocco’s Tacos.
The pandemic exposed weaknesses baked into the fine-dining business model, such as razor-thin profit margins, steeper rents and needing max- capacity dining rooms to barely survive. These costs are higher for fine-dining operators, says Michael Lewis, chef and co-founder of Wynwood modern-Asian restaurant KYU and a 2018 James Beard Award semifinalist.
“Food and labor costs are huge,” Lewis says. “A single change like a hurricane or a one- day power outage affects your bottom line for the whole year, much less an eight-month-long pandemic.”
To survive, more highend eateries should upgrade to-go packaging and take risks with takeout, he says. Lewis says KYU did something he would have considered unthinkable a year ago: join Uber Eats. The delivery app now accounts for 10 percent of his business.
“My dishes are truly not meant for takeout, but we begrudgingly switched,” Lewis says. “I’m secretly looking forward to the day when I can stop it. But it’s a key to survival right now.”
Still, offering takeout can backfire. Packaging costs will be passed on to consumers, which can harm a restaurant’s reputation — especially if food doesn’t travel well.
“There is a risk, but if restaurant owners can’t afford to wait 12 months, they must act now,” Cheng says.
Food mobility: Virtual kitchens, better drivethrus and takeout
Fast-food chains will tempt you with faster and more efficient takeout options and curb side pickup in2021. Miami-based Burger King is testing 60 percent smaller dining rooms and a dedicated drive-thru lane for third- party delivery drivers. Fast-casual Chipotle Mexican Grill is rapidly adding drive-thru “Chipot lanes” to new and existing storefronts.
Your local Wendy’s is no exception. Eddie Rodriguez, whose JAE Restaurant Group franchises 161 locations from Homestead to Orlando, will add curbside pickup to multiple locations by the end of December, and will test delivery-only Wendy’s buildings in 2021. The reasoning is simple: Pre-pandemic, drive-thru sales, on average, accounted for 67 percent of Wendy’s business. Today: 92percent.
“The dining rooms are open but people aren’t going inside,” says Rodriguez, of Lighthouse Point. “People have changed their behaviors and food mobility is more important now than ever.”
More Wendy’ s have joined delivery apps (UberEats, Doordash), while its own a pp now allows customers to schedule curbside pickups times. Parking lots at newer locations now include curbside pickup spaces .“The consumer pays in our case for the delivery apps,” Rodriguez says. “We’ve found that customers don’t mind paying two, three bucks extra for that convenience.”
Steve Stolberg started thinking outside the takeout box before opening his Plantation eatery Ovlo Eats
in 2019. The menu offers only dishes — like grilled Atlantic salmon — that last 45 minutes in a container without losing heat or flavor. Today 80 percent of all orders are takeout, he says, and few customers visit the dining room anymore.
Surging COVID-19 cases and the push for stronger food mobility has made restaurant owners question the need for big dining rooms, says Tom House, a Fort Lauderdale restaurant consultant.
Instead, restaurateurs are carving out spaces that only exist online. National chicken-wing chain Wingstop is experimenting with so-called “ghost kitchens,” where meals are prepped in offsite food trailers strictly for food- delivery apps, no dining rooms needed.
Hunting for ways to boost revenues at Ovlo Eats, Stolberg opened a second restaurant in October called OE Bowls, a side hustle specializing in buildyour- own protein bowls. But customers can’t visit it in person: This so-called “virtual restaurant” operates out of Ovlo Eats’ kitchen, and only customers who find it on UberEats and Door dash can access the menu.
“We don’t have topay rent on another lease, which is nice, but we can still make money,” Stolberg says. “It also helps save on labor. We just use the existing staff.”
To avoid costly storefronts, more restaurant owners will test these online- only eateries in 2021 — but it depends on the cuisine and business model, Herbst adds. “My restaurants are more about the experience, and takeout is a small part of sales. But if you’re selling wings or pizza or burgers out of a virtual kitchen— things that can travel— this can work.”
But there will be a learning curve, Stolberg adds.
“To pivot from never having done takeout and not having the technology in place to handle it will be hard,” Stolberg says. “We were lucky. Ifwe didn’t build our menu to travel or have an online ordering systemin place, we’d have been dead in the water.”
Safety first: The new sales pitch
Brace yourselves: More mask and hand sanitizer stations are coming. QR- coded menus will be permanent fixtures. Customers will gravitate to eateries that promote safe dining — and restaurants will entice them by hyping their upgrades on social media.
“Restaurants will show why their place is the safe place,” says House, a parttime manager at Thai Spice restaurant in Fort Lauderdale. His company, A Better House, consults local eateries about staff training and food safety. “We just brought in a guy in a hazmat suit to spray down[ Thai Spice] and posted the video on social media. This isn’t just for show. It’s marketing. It’s like having a 32-ounce Tomahawk steak but not telling anyone about it.”
For Stolberg, touting Ovlo Eats’ social distancing on Facebook has already boosted sales. Takeout is now 80 percent of his business and employees still enforce mask-wearing.
“If this is what it’s going to take, I’ll be the mask police for the next nine months to a year,” says Stolberg, whose trendy eatery dishes herb-grilled steak and other upscale cuisine in a sunlit dining room adorned in whitewashed wood-paneled walls.
Permanent al fresco seating is already built into the blueprint of Herbst’s Big Time restaurants. His newest, a sister location to Elisabetta’s designed pre-pandemic, will include a 150-seat multi-tiered patio whenit debuts in January in West Palm Beach. Custom-
ersnowpack to near-capacity the Astroturf- covered patios at Louie Bossi’s sister eateries in Fort Lauderdale and Boca Raton. Herbst says customers “felt good knowing there was big outdoor spaces for them.”
But there will be always be pandemic-weary customers forw hom safety precautions matter little, Herbst adds.
“That’s always going to exist. People will think they’re bulletproof, and they’ll go out with friends,” Herbst says. “But we’re ready. As dumb luck would have it, our patios have prepared us for this time.”
Menus and staff: Smaller is better
Does it suddenly seem like your favorite restaurant went on a menu diet? You aren’t imagining it: With fewer dine-in customers, restaurants are shedding food inventory to save overhead costs, says Eric Beckman, economics professor at Florida International University.
The number of restaurant workers has shrunk — and may stay that way for awhile, Beckman says. In Broward, restaurant and hotel unem-
ployment hit 9.2 percent in August compared to 3.2 percent a year earlier, Beckman wrote in an October FIU study about CO VID-19’ s economic impact on South Florida’s hospitality industry.
“For the foreseeable future, there will be fewer restaurant workers employed until we get back to normal, until enough folks are vaccinated,” Beckman says.
“Owners are super-concerned with payroll, which is hurting restaurants right now,” says House, the restaurant consultant. “It’s harder to justify servers, bussers, front-of-house staff, and it will get leaner and meaner next year.”
Papa’s Raw Bar co-owner Troy Ganter has reduced staff from 110 to 70workers since March and closed Papa Hughie’s Seafood World, his father’s namesake landmark restaurant. “We had two restaurants that used to
do$7 million a year,” Ganter says. “Nowwe have one and we’re on track to hit $4.5 million next month. This isn’t going away.”
Fast-food restaurants will be the exception in 2021, says Rodriguez, owner of
218 Wendy’s franchises in Florida, Texas and Tennessee. He says current workers will be shifted around as Wendy’s pivots to up grading its drive-thrus.
“Instead of laying them off, you make them an outside order taker, or have them handle curbside pickups,” Rodriguez says. “You can’t cut back labor. It’s the opposite: We have to invest in wowing the customer with better service because consistency matters .”
Dining in: It’s about dining out
Restaurant owners who pumped up their outdoor dining this summer aren’t about to give up their temporary parking-lot patio sand sidewalk seating anytime soon.
Already South Florida’s cooler, breezier patio weather is packing more crowds under the 50-seat parking-lot tent outside Troy Ganter’s convivial seafood hub, Papa’s Raw Bar. Dining capacity has rebounded to
100 percent on weekends and sales are nearly flat now compared to February pre-pandemic, he says.
“Thank God we got the tent so everyone has that safe haven,” Ganter says. “It’s more important than I thought because so many customers hadn’ t seen it, and husbands and wives were in secure about coming back. Now they’re coming back.”
Ganter will keep the tent “as long as it’s allowed” in
2021, he says. He’ll be glad for the extra capacity next summer even if dine-out customers are less willing to bake in the outdoors welter.
“We’re still in it,” Ganter says. “Becausewe have this, I’ m more confident that we’ ll be OK.”
The Centers for Disease Control says dining rooms without six-foot distancing poses the highest risk of COVID 19 spread. FIU’s Michael Cheng agrees, adding that more customers in 2021 will consider outdoor seating a priority before deciding where to dine out.
“Consumers enjoyed the social aspect of eating out, but now it’s, ‘What is the restaurant doing to communicate that it’s safe?’ “Cheng says. “When I’m hungry I make my decision based on the availability of outdoor seating. If they don’t, then no, I’ll do takeout regardless of whether they’re wearing masks.”
Chef- owner Michael Lewis got lucky with his parking-challenged eatery, KYU. Wynwood’s Business Improvement District gave him permission to replace street parking on 25 th Street with 30 outdoor seats in August, allowing him to hit full capacity.
“I mean, the patio seating isn’t ideal. The tables overlook Wyn wood ware houses, not the ocean, butwe added market lights and wired speakers and mister fans and itworks,” he says.
Restaurant patios will be critical for survival in 2021, and Lewis recommends owners apply for special outdoor seating permits or “collaborate with neighbors who have patios and share,” Lewis says.
“We have to become germophobes to live a safer, happier life ,” says restaurant consultant Tom House. “When a restaurant doesn’t emphasize that, they get crushed.”