The economy: Tired of it yet?

Standing over the range toasting pine nuts for what would eventually become part of a gallon of pesto, (my task inspired by a neglected basil plant that turned into shrub and a hard frost warning) my thoughts turned to the economy. Yeah, we’re all sick of hearing about it. Quite frankly, on a personal level, I’m not sure what to make of it.

Not that I don’t understand the math. Politics aside, the simple math is we have an economy built on debt, on the verge of going bust, and a government borrowing more to keep it afloat. Everybody around me is bracing for the worst.

That warning was repeated at FSN’s conference from a number of industry experts, and it’s an accurate one. For our anniversary stories in this issue, I contacted J.P. Samuelson, chef and owner of jP American Bistro, for the five-year slot. I called him on a Thursday, set up an interview for the following Monday. By then, he was out of business. Sure, there was more than the broad “economy” at work against Samuelson, namely the city of Minneapolis’ Public Works Department. But the closing of a prominent restaurant set an ominous tone, and that tone further darkened recently by the stock market plunges and political hand wringing.

The fact it’s an election year has only amped up the hysteria. Which isn’t to say we’re not in serious trouble, but it is still a mixed message out there on the restaurant scene. “We’re all sitting on pins and needles, waiting for the stock market (to crash) the bailout, etcetera,” said Lindell Mendoza, chef and owner of Picosa in Minneapolis, who joined a discussion panel at the FSN conference. “We’re adapting—we see the same number of people through the door, but it’s one cocktail instead of three, and an appetizer instead of an entrée.”

A recent Afton House Inn wine tasting cruise I attended was a full house (or boat, rather), but like any smart business owners, the Jarvis family isn’t taking one evening’s good fortune to indicate all will be well next month—or next week, for that matter. They have the wine dinners planned through the winter months, and rack their brains to find ways to interest people to drive to Afton.

Adding further complexity to the economy issue was my recent trip to Chicago. News reports there mirror the Twin Cities, but my day in the city showed activity similar to three years ago, when the country was still riding the home-equity loan high. The quick, late lunch we ate was within a crowded north side Chipotle, and our later dinner at a gastropub called the Hopleaf Bar followed an hour and a half wait for the table—the place was jammed, and it was not the size of a phone booth. My friend said it’s been this way since its recent expansion and addition of a kitchen. The food was anything but standard bar fare, more like what you might find at a European pub: a bacon-wrapped rabbit leg, venison tenderloin and a pork stew—ingredients sourced locally as much as possible. The customers’ ages ran the gamut, but largely dominated by the 30 to 40 crowd, and few looked like they had any more money in their jeans than I did.

Adaptation. The word came up frequently during the FSN conference. Dennis Lombardi, vice president of foodservice strategies for WD Partners, and the event’s keynote speaker, placed it more bluntly. “It’s Darwinism,” he said. “Adaptability is key; those that can adapt, will survive.”

The Hopleaf Bar had a loyal following as a bar with a massive imported and local beer list. The result of their expansion, done with quality in mind, was a success. Its success undoubtedly took business from somewhere else, an effect stinging those restaurants teetering on the quality margins more now with people watching their cash flow.

Franchise Times Corp., which owns Foodservice News, had a company meeting the other day and the president, John Hamburger, said to all of us that it’s easy to be successful when times are good—one can just ride the wave while providing only reasonable quality. But when the times get tough, it’s the smart, well-run business that survives, and often thrives when the others fall away.

Applying this to the restaurant industry, my unscientific opinion is many people are still looking to go out and spend a bit of money—maybe just not as much, and at fewer places than before. Lombardi mentioned that restaurateurs should evaluate how convenient their restaurant is for a meal experience. Consumers have five restaurants in their mental phone book, he said. “If you’re not (in it), you’re not convenient.”

I’d take that a step further and say that a restaurateur should analyze what value they offer the consumer. I agree with the mental phone book analogy, although I’d qualify it somewhat. Consumers, in my observations, are becoming more rigid with their choices, less likely to take a risk on an unfamiliar restaurant. The challenge for survival in the coming year for many restaurants is this: how to keep your regulars, and how to attract people to replace those that duck out or cut back because of a financial pinch. How can you adapt?

And, adaptability doesn’t mean wholesale changes. It might just mean getting the word out about the restaurant (Jonathan Locke discusses that in his column on page 14).

An evening at the Barbary Fig with chef and owner Brahim Hadj Moussa and a few of his friends reinforced again what a restaurateur must remember in good times and bad: “Every penny counts—every penny,” Hadj said. He’s been in business almost 20 years; it’s obviously worked. It’s a message that applies well to personal finances, which, intentionally or not, Hadj drilled into his college-age children’s minds. “They grew up in the restaurant—they understand,” he said with a smile.

In the big picture, is this economic spanking a bad thing? I can’t believe it is. If the economy can be rebuilt on responsible financial management (which can include responsible debt), it’s far better for business owners and consumers than always wondering when reality will visit and bring about the crash.

And my pesto I was making? Oh, it turned out fine. I piled it into some ice-cube trays to freeze and store for use during the winter. It ain’t rocket science. Which led me to another thought: Grocery sales are on the increase, which translates into more people cooking and eating at home. Yet another challenge for the industry…