The restaurant industry has been fraught with uncertainty. Decades before the pandemic, research found that more than half of new restaurants closed within three years of opening. Anyone who has worked in the industry knows that the hours are long, the work is hard, and the profit margins are low.
Now, the ongoing pandemic has caused many restaurants to close their doors permanently. In Portland alone, one tally shows that more than 200 restaurants have closed in the past two and a half years.
For those chefs, bar owners and restaurateurs Have To stay open, many have had to change the way they do business: high-end restaurants have reconfigured their menus to offer home-cooked meals, bars have pushed the Oregon legislature to legalize take-away cocktails, and some have even managed to switch to packaged food.
“That little bit of revenue from packaged products has helped us stay afloat during the pandemic,” said Liz Davis, founder and owner of Xico Restaurant.
Opened in 2012, this upscale Mexican restaurant is one of the few restaurants in the US that grinds its own corn in-house to make matcha sauce.
“We have a Molino, which is a volcanic stone corn grinder,” Davis said. “We grind and grind our organic, non-GMO field corn for all tortillas, chips and masa products.”
When Xico closed in-person dining in March 2020, it had two locations and 70 employees. Within a week, their staff was reduced to five and they switched to making to-go meals. Their robust mailing list provided them with direct contact with customers, and for the next year and a half, Xico created and sold home-style dishes designed to be reheated at home. They also offer packaged salsa, tortillas, and homemade chips. “It was definitely very experimental at first,” she said.
Davis’ breakthrough came when he submitted Xico’s chips to local grocery chain New Seasons Market, which carries them in all 18 of its stores.
“It’s just my sous chef, I fry hundreds of bags of chips, pack them, and figure out how to get them where they need to go.”
The decision to focus on chips for the retail market rather than other products makes strategic sense. Selling perishable products in the grocery store is a lot more complicated than what’s on the shelf, Davis said.
But going from restaurateur to packaged-food maker is no easy task. A second grocery store called Market of Choice was interested in Xico’s chips and invited Davis to participate in “Oregon Angel Foods,” a three-month educational program developed by the nonprofit Oregon Entrepreneur Network . The program is two-fold: providing education and networking in the packaged food space, and once their product is ready, they also provide a year of shelf space at the Market of Choice.
“I have learnt a lot [and] There are so many people,” Davis said, noting that their restaurant space has outgrown its size as a fries production facility.
Xico is expanding its chip production and launching a second flavor through another local company called Community Co-Pack NW.
Looking ahead, Davis sees packaged fries working in tandem with restaurants to support each other.
“I do think that the seasonality of the packaged food industry may be the opposite of the seasonality of the restaurant industry, so they can support each other in a downturn,” she said. “This will obviously help profitability and help us continue to operate.”
For Eugene Jung, co-owner of ping pong bar Pips & Bounce, the pandemic immediately brought his business to a halt, with no real options for transformation.
“It’s probably one of the worst brick-and-mortar businesses you could have in a pandemic because you’re close to people and you’re playing ping pong,” Jung said.
The bar had a string of successes in the six years it was in business before the pandemic: a New York Times article, a Shark Tank appearance, and a second location soon to open in Minneapolis.
“We were actually watching our Shark Tank look party with 50 or 60 people and we had a local news crew [there]Jung said. “During the viewing party, the cameraman got a phone call and he said, ‘I’m sorry but I have to go because [Oregon] Just received our first COVID case. They had to pack, they left, and we might be closed in 10 days. “
Jung has been running at full speed, focusing on Pips & Bounce, and said that while he was frustrated when they closed, he knew it wasn’t healthy for him to just wallow in anger. While checking his employee-shared Slack channel, he saw a mention of Amazon fulfillment centers hiring.
“I thought about it and was like, ‘You know what? It keeps me busy and not just sitting at home.
Jung was hired as a “picker,” a job he said could be exhausting. “It’s crazy work because you’re actually picking a thousand items a shift,” he said. “You can pick something as light as lipstick, or as heavy as a 50-pound bag of dog food.”
During the first few weeks of work, Jung began to notice a pattern emerging. Many orders fall into two categories: pet food or coffee.
“If that’s what people hope to order at the time of the worst human crisis of our lifetime…that’s an epiphany.”
Jung started his research without knowing if or when Pips & Bounce would reopen. He said it almost quickly became apparent that he didn’t want to make pet food, but roasting coffee has a fairly low barrier to entry for new businesses. Especially for someone with a 4,500 square foot building and an unused commercial kitchen.
“So I thought, ‘Okay, I can temporarily repurpose Pips & Bounce and learn how to roast coffee.'”
He has another benefit – lots, lots of time to study. He says roasting coffee is an art, not a scientific equation, so much of the process is trial and error. Initially, he had no confidence in his roast, but as the pandemic continued, he knew he had to go all out.
“Like many small businesses or entrepreneurs, you’re just a little bit of a leap of faith,” he said.
The first customers for Skaut Coffee Roasters were friends and family, but Jung knew the next step was to get into grocery stores. Grocery stores still have regular customers as many cafes, bars and restaurants remain closed or restrict delivery.
“When I went into my first grocery store, it was a revelation, and I was like, ‘Okay, I’m all for it,'” he said.
Through other small business owners, Jung has also connected with the Oregon Entrepreneur Network, access to education and retail space through their programs. He is one of two new business owners to receive this year’s Emerge Initiative Award, a $5,000 grant from the BFM Fund to support entrepreneurs of color in the early stages of business development.
While Pips & Bounce has now reopened, Jung says Skaut Coffee isn’t going anywhere.
“Coffee roasting is a growing business for me,” he said, “so I’m actually in both industries, and I keep myself very busy.”
“Restaurant business is tough,” says Sandra Arnerich, Renata’s chef and owner. “And I don’t want to whitewash it because I think it’s a disservice to the people in it.”
Her wood-fired Italian restaurant, owned by her husband Nick, became a sensation almost immediately after it opened, earning the “Restaurant of the Year” title in 2015 just six weeks after it opened. A year later, the couple opened sister cafe Figlia, with a third opening just weeks before the pandemic began.
Oregon governor the same week. Kate Brown instituted a statewide stay-at-home order and Renata was ready to receive a whole cow from a local farm.
“My first thought was, ‘We don’t have a restaurant, we can’t have this cow!'” Arnerich said. But since the farmer was already on the way and the animals had been slaughtered, she decided to take the meat and “figure it out”.
It was Monday, and by Thursday, Renata had a takeaway food pantry in place. They had so much inventory from the restaurant that they decided to put everything together into a program designed to provide food that could feed a family.
“We are parents too,” Arnerich said. “Our struggle is the same one that everyone is going through. No one wants to go to the grocery store, everyone is homeschooling, everyone is working from home, and people are going to need food.”
This initial idea changed in the weeks and months that followed because things were changing so quickly. People are getting more comfortable going to the store again, but indoor dining is still not an option. Sandra’s husband Nick proposed remodeling and freezing the pizza Renata used to make at the restaurant for home consumers.
“We put them in our pantry plan, but we can’t keep them [in stock]. She said. “People will buy six at a time. “
By then, supply chain issues had begun to alter supermarket inventories. Arnerich said she noticed New Seasons Market was struggling to fill their shelves because many of the products coming in were pandemic staples, like toilet paper. So they found the grocery store to see if they would be interested in delivering pizza for Renata’s.
“They said ‘Can you deliver 3,000 pizzas in three weeks?’ I want you to understand that when we had restaurants, we thought our ovens could only bake two pizzas at a time,” she said.
Not only did they make 3,000 pizzas, they also made the branding, packaging and labels for them. For the first two years, Renata’s pizzas were available in stores, and they were firsts. 1 and no. 2 Best-selling frozen products in grocery stores.
What started as the answer to how to keep restaurants alive during the pandemic has transformed into its own successful product line.
“It has really reshaped the way we move forward as a business,” she said. “Leaving this is not an option for us.”
With the return of the indoor restaurant, Renata double duty as a pizza maker and restaurant, but things remain a challenge. In addition to taking a hit during the pandemic, everything from hiring employees to the desirability of their locations has changed.
“Resuming day-to-day operations at restaurants is three times as difficult as it was before the pandemic,” Arnerich said. “And it’s been tough already. [before that]. “
Last month, Renata quietly closed the restaurant, posting on social media that they had decided to devote all their energy to the frozen pizza line.
They will still host private events in the old restaurant space. But Aneric said: “The pizza business is a really good way to continue doing what we love to do, [but] in different environments. “