Wednesday, December 11, 2013

Eater's Digest | Breaking the Golden Rules of the Food Industry

Breaking the Golden Rules of the Food Industry
By Tomoko
 
If you ever worked in the restaurant business, you would know that the cost of food is usually kept below 20% of the menu price. In order words, if a sandwich is sold for $10, the actual cost of the ingredients (i.e. - bread, ham, cheese,lettuce, tomato, mayonnaise and whatever else you put in it) is kept below $2.  The rest would be used to pay rent, utilities, salaries, and, if lucky, maybe some profit.The restaurants try to have at least 3 turn arounds a day – twice for lunch and once for dinner - to break even or make it somewhat profitable. This“golden rule” of the restaurant business is the same here and the same in Japan.
BUT there is a Japanese entrepreneur who has broken this golden rule and his company has built about 20 or so chain restaurants in the Tokyo area. Theyare all called “Ore no Italian”, “Ore no French” or “Ore no whatever the type of food”. “Ore no” means “My” in Japanese, and all of them are amazingly successful and profitable. All the reservations are made a month in advance and people also line up outside the restaurants every day.

Here is the secret of their success model.

  • They keep the cost of the food in the 60 - 70% range, and keep the total dinner price to be around $30 per person.  The quality of the ingredients is as high as what you would normally eatat a high-end, 5-star restaurant. What a 5-star would serve you for $200, you pay $20.

  • The company hires chefs who have worked at 5-star Michelin restaurants. (Michelin is the French version of Zagat, but are ratings are determined by professional food critiques rather than the general public). There are many talented chefs, but not everyone can achieve a “celebrity chef” status where they can have the freedom to be creative at work. The company decided to providea playground for such chefs.  For example, all 3 Italian restaurants have 3 different executive chefswith 3 different menus, all created independently by each chef.

  • And most importantly, the restaurants have no chairs. Yes, they are standing restaurants. So if you are looking for a place where you sit for 2 hours for a long relaxing dinner, this is not a place for you. This is a place where you go to eat superb quality food prepared by top notch chefs for a ridiculously low price. You eat well and you leave. So all the restaurants have about 5 turn arounds a day, instead of 2 or 3 like many other restaurants, and that makes the business VERY profitable.
 
Then you come to realize that there is really no “secret”. If the food is delicious people come back. If the price is inexpensive people come back. People don’t go to a restaurant because of the chair. We go there and we go back there because of the taste and the price. Very simple.
This Japanese company is going to open the first US chain restaurant in midtown Manhattan (New York City) next year. I am very curious how this model is going to work here. I promise that I will keep all the readers updated.
 
"About the author- Tomoko requires Rhina to have soy sauce in her fridge, a necessary ingredient for our on-going friendship." I will reveal who I am - through food - bit by bit.