Has your favorite fine dining restaurant completely shut down? Are they offering takeout or remaining closed? The restaurant industry makes up 4-5 percent of the U.S. GDP and it is struggling to survive due to the COVID-19 crisis.
There is no simple solution for recovery, but there may be a bit of hope yet. With some creativity and community support, the question still remains if restaurant carryout is going to be enough to save the fine dining industry?
One thing is for sure, people are absolutely loving the high-end carryout and delivery services from some of the finest restaurants and chefs in the country! Patrons are finding comfort in their favorite foods to help ease social distancing.
Eating your feelings may never have been a better value. Michelin Star restaurants across the country are offering delivery and carryout during the COVID-19 crisis. Fancy dine-in menus that used to cost $200-$385 per person are now offering comfort food menu items that are priced below $50 per person!
If you ever wondered about a fancy restaurant in your city, now may be a great time to try them out before they go back to their dine-in only menus and high ticket price. More families across the country are now able to enjoy celebrity chef meals as a ToGo order.
Supporting local businesses is more important now than ever. If you have an upcoming special celebration or just want a nice meal, check your hometown to see if any fine restaurants are doing carryout or delivery. It’s a wonderful way to celebrate with your family and help the community too.
The Carryout Platform
The inspiration came from Canlis Restaurant, a top restaurant in Seattle. It coincidentally happens to be our favorite restaurant in Washington. They needed a platform to reserve carryout orders and communicated their needs to Nick Kokonas.
In Chicago, Nick Kokonas is not only co-founder and co-owner of Alinea Group but he’s also the founder and owner of Tock, a reservation system for fine restaurants around the world. The Alinea Group owns several Michelin Star rated restaurants in Chicago. He saw the trends of cancelled dine -in reservations across the U.S. and worldwide. He responded to restaurant owners like Canlis that needed a carryout solution on the Tock platform.
Kokonas was able to get his techies to build the carryout reservation option within 6 days rather than it taking months to code. When he tested it for Alinea’s carryout service, they sold out within 5 hours. It turns out, people do want high-end takeout!
The Tock solution has enabled multi-course sit down dinners to pivot towards curbside pick up meals amidst the COVID-19 crisis. Prior to the virus, most of these fine restaurants were not set up for takeout. They were built for a memorable dining experience.
The Ongoing Challenge
With increased pressures to avoid any dine-in experience, restaurant owners face either to adapt, remain temporarily closed, or completely shut down. The food industry is already notorious for operating under razor thin margins, particularly the mom and pop places.
According to the National Restaurant Association, out of 2,700 restaurant owners surveyed across the country, only half can financially afford the transition to a takeout and/or delivery solution.
Restaurant owners have to see that both customers and working employees are protected with protocols if they decide to continue operating. This is not an easy undertaking.
While many restaurants have found ways to keep going while adhering to strict safety measures, social distancing in the kitchen is an issue that some restaurants have not been able to solve.Larry Lynch- National Restaurant Association
Unfortunately, there are some restaurants that have attempted to do carryout services but still had to close their doors until further notice. Lucia Restaurant in Dallas, TX sold out of their ToGo orders night after night, but struggled with finding a way to operate while also keeping their staff safe.
It’s a very surreal thing to go from being a very popular restaurant … to having to tell your staff ‘I’m laying you off because we are too popular and too small to be open safely’. It’s a ridiculous thing to have to say. And yet, what else is there to say?Jennifer Uygur, owner of Lucia Restaurant
Is it sustainable?
It would seem that the restaurants with the strongest financials have a higher probability to self-sustain. But having the dollars doesn’t mean demand. Restaurants need both at this time to be viable. No different than any other recession or economic crisis, there will always be some businesses that unfortunately can’t sustain.
The carryout menus at these fine restaurants are above average takeout you may be used to, but they don’t have the magical experience patrons pay for when dining in. The intricate art on a plate and complex creations are now translated into comfort food to embrace the country’s current mood.
As such, there is a vast price difference they can charge for a ToGo Menu versus a Tasting Menu. Couple the price cut with costs the restaurants incur for the transitional operation and one can’t help but to wonder “is it sustainable?”
Alinea Restaurant is consistently one of the top 50 restaurants in the world since its award of the 3 Star Michelin in 2010. It has yet to lose a star. The flagship restaurant was only offering a tasting menu at $300-$385 per person. Its now ToGo menu is $35-$40 per person with an optional $40 bottle of wine. Huge difference!
Alinea’s First ToGo Menu was $35 per person and sold out in 5 hours
The dinner comes packaged with reheating instructions.
- Short Rib Beef Wellington
- Mashed Potatoes
- Squash Curry Soup
- Mango Cantaloupe Salad with Vinaigrette
- Wild Sautéed Mushrooms
- Brussel Sprouts with Shallots & Bacon
- Dinner Roll
- Creme Brûlée for dessert
Image courtesy of Eater Chicago
Image courtesy of Eater Chicago
Image courtesy of Eater Chicago
NOTE: The current Alinea Takeout Menu is $39.95 per person and includes Coq Au Vin, salad with dressing, side supplements, and dark chocolate pot de creme.Visit Tock to make carryout reservations here
Clearly, demand for Alinea’s meals are not an issue. Since Alinea’s carryout was a success, hundreds of other fine restaurants across the country are joining in the new platform. This helps to employ a portion of the staff from being furloughed.
What the restaurants lack in price per person is now about volume, which many places are selling out their ToGo orders. What’s nice about a carryout menu is you can sell at a much higher volume than dining in.
Alinea Restaurant has 70 seats and serves approximately 128 guests an evening. At an average price of $300-385 per person, it generates approximately $38,400- 49,280 daily before any alcohol is even sold. With carryout, Alinea Restaurant alone is currently generating close to 1,000 meals a day at $35-40 per person. This creates a revenue potential of $35,000-40,000 daily without alcohol sales.
The meals are not as meticulous or time consuming as the dine-in experience, but just as much effort is needed to support the greater demand at a much lower price point.
The bottom line is…
As long as there is a demand for high-end carryout, efficient strategy, and a solid budgeting plan for these restaurants, it looks like this model can be sustainable. It can be expected that not all places will make it as no one can see the end of this travesty in sight.
As a retired Financial Planner, I have been impressed with Nick Kokonas perception of proper planning and budgeting in preparation for these down times. He highlighted the importance of being financially prepared for at least 5-6 months to be sustainable in a crisis. I agree with the statement whole heartedly whether it pertains to business or personal finance.
With the quick success of the carryout services, Alinea and other restaurants have expanded into delivery services using third parties such as Postmates. This will help increase employment in the food service industry and drive demand for the restaurants. See if Postmates is available in your area here.
A Brand’s Character…
I will continue to say that you never know a brand or business until a crisis hits the fan. This is where you know who is the most prepared and what they really value.
Some will make it everyone else’s problem and other’s will try to solve it. It has been incredible watching the innovation that has inspired critical solutions that help so many livelihoods.
It was not the intent that Alinea would ever do takeout, but in the midst of catastrophe- instead of giving up- the Alinea Group chose to reinvent themselves and their business model to accommodate the times.
In doing so, they were able to save 30% of their staff from furlough as well as create a platform to increase restaurant sales and make diners stuck at home very happy.
I am so excited that more fine restaurants are choosing to do carryout. As foodies, we were devastated when restaurants countrywide were closing down due to mandates from COVID-19.
We miss the dine-in experience and tasting new things in different places. After hearing what my favorite chef, Grant Achatz and his business partner, Nick Kokonas were doing to help themselves and the industry, I can really see the people behind the kitchen.
In a time where so many businesses can ask for charity and financial assistance, the Alinea Group gets their hands dirty working around the clock to save jobs, create opportunities in a shrinking market, and spread joy to the community with incredible food. This takes an unbelievable amount of guts and the locals are happily responding.
If you’ve ever dined at Alinea, you know it’s more than a restaurant. It’s a remarkable experience you don’t soon forget. If you’ve never dined at a Michelin Star restaurant before, check out this post:
It’s absolutely great to see people posting pictures of their meals around their tables with their families. It recharges me every single night.Nick Kokonas- Co-founder, Co-owner of Alinea Group and Founder, CEO of Tock