Many large restaurant groups can attribute their success to one of their greatest strengths: their supply chain. We all know that any strength can become a weakness, though.
Marginal Ingredients Won’t Excite Your Staff
David Lebovitz describes this well in My Paris Kitchen, when he laments that “many of the great Parisian bistros have been taken over by corporations that kept the beautiful interiors (and in many cases, saved them from destruction) but stopped paying attention to the food, except to see where they could cut costs by switching to frozen or prepackaged items.”
Kristofor Lofgren, the founder and CEO of Sustainable Restaurant Group, arrived at a similar conclusion about food quality several years ago during an early foray into the restaurant business. At the time, he was an investor in a sushi restaurant that wasn’t doing well. Lofgren worked closely with his employees and quickly realized that they were very unhappy. His business partners instructed the staff to chop up marginal product and “make it look pretty so we can sell it.” Meanwhile, the staff confided to Lofgren that they wouldn’t serve the fish to their kids and therefore asked why they should serve it to customers.
Lofgren challenged his partners to get their employees excited about the product. He reminded them that marginal thinking doesn’t get great results. His partners didn’t listen, so he exited that business and launched Sustainable Restaurant Group.
The vision for Sustainable Restaurant Group starts with fresh, environmentally sustainable ingredients. The people who prepare and serve the food get excited about the ingredients and this gives them a sense of purpose. Lofgren also learned a valuable lesson about managing people from his first venture. Sustainable Restaurant Group takes really good care of their staff and makes sure they’re supported in their jobs. It’s a winning formula, and the company grew to $11 million in sales without taking a dime of outside capital.
When Sustainable Restaurant Group launched, it had everything going against it. First, it opened in 2008, during the worst economic crash in recent history. Credit was non-existent. There also wasn’t a commodity market for seafood, which is the largest traded commodity on the planet by weight. So, Lofgren started his own.
Seafood is trickier to source than other protein. According to a study by ocean conservation group Oceana, 74% of seafood sold in sushi venues is either mislabeled (wild v farmed, or labeled as a different species), or manufactured (e.g., crab sticks). Lofgren quickly discovered that he needed to know his fishermen as well as a steakhouse should know its ranchers.
When Sustainable Restaurant Group launched, it started by tracking down the best fishermen in the world. The company paid fishermen for their catches up front, which cemented relationships with the fishermen while also stabilizing food costs.
Sustainable Restaurant Group doesn’t compromise on its sourcing. They are the world’s first certified sustainable sushi restaurant. It works with independent, third-party certification organizations to audit their supply chain.
Sustainable Restaurant Group isn’t trying to be marginally better than their competition. They want to be great. That means that they want the best people in the world to work for them. They look for people who are willing to donate their time to their community, and who want to work for a company with a purpose and not just punch a timeclock.
Every person on their team embodies their culture. They also look for people who are excited about their mission and purpose. For example, the group hired a dishwasher who was previously a sous chef at a fine dining establishment. He liked the Sustainable Restaurant Group concept so much that he took a dishwasher role because it was the only available opening. Eventually, he worked his way up to his current role as executive chef.
Giving Voice to Shared Values
Sustainable Restaurant Group believes that shared values elevate the lives of their employees, customers and vendors.
Lofgren believes that as an industry, it’s our time to step up. Business is being called to lead and make change happen. If the top 10 restaurants in the country decided to source sustainably and truly engage its employees, it would revolutionize America. We are the largest industry in the country and produce $700 billion in annual revenue. Yet, we don’t hear our president or other officials talking about the restaurant industry the way they discuss healthcare, transportation, petrochemicals and immigration.
If our industry changes the way we do business, it would fundamentally drag the country forward. For example, solar is now the largest employer in the energy sector. Coal, oil, and natural gas combined employ fewer Americans than solar. Yet, some of these industries have bigger and louder voices. We heard a lot about coal mining during the last election, yet it only employs about 93,000 workers. Even solar, wind and geothermal only add up to about 2 million workers, and that’s less than Darden, Starbucks, McDonalds and Yum.
Lofgren believes that our industry should be the most powerful voice in the country shaping political reform. He’s walking the talk by expanding from four stores in Portland, Oregon to Denver, Colorado. He’s also designing and constructing his restaurants to be as environmentally conscious as possible. The décor is designed with reclaimed timber, low flow water systems and Energy Star Appliances. All of their energy needs are supplied by wind, solar or geothermal so they are as sustainable as possible.
Imagine the Possibilities
Perhaps you’re still serving industrial-caliber, processed food at your restaurant. You might be wondering why your employees and customers aren’t excited, and why you’re receiving mediocre reviews. Chains with excellent supply chains can still capture the efficiency and cost savings – just with fresher, more sustainable ingredients. This change would also force us to train the next generation of chefs and create jobs since we’d rely less on processed food.
What if it was possible to offset the cost of training additional staff, paying them well and offering them expanded benefits due to savings captured through energy efficiency?
If we collectively leverage our industry’s voice and apply Lofgren’s winning formula of sustainability the possibilities are endless.