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What can hospitality leaders learn in New York City?

Updated: Oct 13, 2018

When looking for innovation and inspiration in the UK food and drink hospitality sector, it is to the USA we look first.

The market is more developed with many more larger, well established multi-site operators and a higher frequency of eating out of the home. The team at Propel and UK Hospitality have teamed up for the past six years to take a group of senior executives stateside for a study tour to learn from what our counterparts are doing there. For the past four years, I’ve been very privileged to have been involved in organising this. Last year we headed to Las Vegas to learn from some of the world’s largest hospitality operators in the city that never sleeps and after almost a year of planning, I was thrilled to take this years group to the Big Apple.

It seems now a days that New York consistently tussles with London as to the crowning title of world’s best city for restaurants – we’ve come along way in the past decade! The dining scene is nuts, there is just so much going on and the growth doesn’t seem to slowing down either. In the past three years the number of restaurants in the city have grown 7% from 25,123 to 26,697. Walking the streets it strikes you that this growth has clearly been driven by fast casual, in some parts of Manhattan every other shopfront dons the branding of one outlet or another – it’s almost certainly the place to go to learn about this sub-sector of the market. At the other end of the market, top end restaurants tussle for celebrities in a frenzy that we have yet to see in London, with one top restaurateur suggesting that the best restaurants will give away over a week’s revenue each year to comp celebrities in a bid to attract their attention.

Not dissimilar a story to that of the UK, our colleagues on the other side of the Atlantic are facing their own ‘headwinds of cost’ – foremost through the changing labour laws. In New York state the hourly minimum wage is climbing from $11 to $15 over the next three years, for businesses with more 10 employees. There has never been a legal obligation to sick pay before, but this is coming too. At the centre of the resulting conversations is tipping. With service staff receiving northwards of 20% average on the majority of tips, it’s a lucrative business. We were regularly told that experienced waitstaff could earn in excess of $100,000 per year. Many restaurants have moved to a hospitality included, or tip free environment in the past year, many have since changed back after a mass exodus of its best wait staff. A real challenge for the industry there.

As you might expect, New York is one of the key nightlife destinations in the city, boasting over 10,000 bar and nightlife venues, accounting for 12% of the total number of these venues in the USA. One key difference in the ownership model of these outlets is the laws blocking breweries, liquor manufacturers or alcohol distributors from having ownership in venues. In a similar move to London and many other major cities around the world, last year the New York Mayors office appointed an ‘Office of Nightlife,’ appointing a ‘nightlife mayor’ to promote the important night-time economy, the impact of which economic studies value at over $10 billion – and highlighted as being amongst the most important cultural activities in the city, with three times as many admissions to late night venues than sporting events.

On these trips we aim to inspire the group, give them learning opportunities from the great people and businesses we interact with and provide a superb platform of time with other British business leaders to network. Having a group of such influential and passionate hospitality leaders gives me a brilliant opportunity to gain access to some of the best businesses and leaders, that’s where the added value comes from. Let me introduce you to some of those people and businesses me met and share some of our key takeaways.

Claus Meyer

The Great Northern Food Hall

Claus is renowned as the founder of the Nordic food revolution, he very much spearheaded the movement that had secured Copenhagen and the other key Scandinavian cities a place on the world map as food destinations. Amongst his biggest accomplishments was co-founding Noma, that held the top spot on many global restaurant rankings for almost a decade. We met Claus at the Great Northern Food Hall, a collaboration between him and two billionaires, creating a modern food hall at the heart of Grand Central Station, inspired by the Nordic pantry. He spoke at length to us of the challenges entering the market in New York, saying it’s almost impossible for entrepreneurs to launch there – of course accepting some of the unique challenges opening in one of Manhattan’s most iconic buildings. Much of this was due to the fluidity and inconsistency of legislation, telling of a story where it took three different attorneys until he found one that gave him the answer he was looking for to achieve what they wanted – luckily persistency paid off, as the last attorney was right. On a broader basis, Claus talked of the need for a bold vision and thinking big and taking the opportunities presented with you. A real visionary.

Richard Corraine & executive team

Union Square Hospitality Group

This a company that needs little introduction, founded by legendary restaurateur Danny Meyer in 1985 the group has stayed at the top of its game since. Richard Corraine joined over twenty five years ago and has been Danny’s right hand man every since, serving as Chief Operating Officer and then Chief of Staff. We were blown away by the level of effort the team went to hosting us, they brought five of their top executives to speak as part of a panel, who were open and more than any business I’ve ever seen, completely aligned. Much of what they talked about was very much aligned to ‘Setting the Table,’ Danny’s renowned best selling book about hospitality – it’s well worth a read. Some of the addition gems that came up were worth a trip to New York for all on their own. The first was the reference of the ‘home office’ not the ‘head office,’ this small nuance in language make a big difference, it very much instils a sense that the business is centred around the restaurants.

Taking this one step further, they also actively require all key home office staff to have come from the business, or as they say, graduate to the home office – even key people who have joined the business from other senior positions have taken the time to go back to the floor for long periods before starting in their position.

The next stand-out moment was talking about transparency with the broader team. They go above and beyond to engage the team in decisions from the beginning, sometimes even before they’ve fully discussed as a whole board. One such example was when they knew their time was up at the original site of Union Square Café, they let the team know straight away before it hit the press and made a commitment to finding another venue and opening straight away. The astounding success of this communication was highlighted with the fact that it wasn’t leaked before the company had formally announced it, after telling hundreds of people.

One of the fundamentals of the book is about enlightened hospitality, Danny talks about collecting the dots and connecting them to help make people’s experience the best it can be. The team talked at length about how they really see digital as a way of supporting this and learning how to do that with reservation systems and social media – connecting online engagement with the actual experience through guest history and notes. Sounds simple, but I’m not sure many are doing it.

The undoubted stand out takeaway from this session was the two questions for any interview, that helps to highlight the cultural fit of the potential team member. The first: What’s the last gift you gave someone for any reason? – designed to understand how much people care about others, what’s important to them and the effort they put in. The second: Who do you admire for any reason? – recognising the ability of someone to see the best in others, speak with passion and show aspiration.

James Beard Foundation

The James Beard Foundation was set up with the mission to celebrate, nurture and honour chefs and other leaders making America’s food culture more delicious, diverse and sustainable for everyone. It takes the name of the late James Beard, who was a champion for American cuisine, a cookbook author and teach with an encyclopaedic knowledge on food. He helped to educate and mentor generations of professional chefs and food enthusiasts. The house in which he lived is used as a space to champion the work of the foundation and in term raise funds. Several times a week they host the best chefs from across America and other parts of the world enabling them to showcase their culinary talent on a stage with an audience that is willing to be tested. This releases chefs from the commercial shackles for a night and allows their creativity to takeover. With good lead time we were able to secure seats for our whole group for one of these evenings. The chef was Lorena Garcia, a Venezuelan celebrity chef who runs a restaurant in Las Vegas. Even for someone at the top of their game, it was clear that this night was something special for her, the pinnacle of her career she tells us, with tears of happiness running down her cheeks. What most struck me this evening was the important part the foundation plays in the food scene, it is instilling a pride in chefing that is accessible, celebrating success not only at the top end of the dining scene but also amongst the executive chefs of group and chain restaurants, building culinary acceptance in mass market dining. Ultimately giving a home to the industry. Something that it is fair to say we miss in the UK.

John Rigos

Aurify Brands A group that builds, owns and operates fast casual restaurants in the city of New York. John Rigos co-founded the group in 2003 with partner Andy Stern when they invested in their first Subway sandwich shop. From here they acquired more multi-unit national franchises, growing to more than 20 sites. From here they moved to developing their own concepts, with the learnings of fast casual at the top level. They work like an incubator, helping to support entrepreneurial people in their organisation to foster their own ideas and grow rapidly in a sustainable way, promoting constant innovation. We met the team at The Little Beet, which concentrates on simple real food served deliciously, with 100% gluten free menu. It was a quirky concept that clearly has legs. During this session we learned at how far ahead we are in terms of our food quality, with many of the elements John and his team highlighting already business as usual here in the UK. It’s not surprising to see why Pret has really stormed the market in New York, a real success story. One thing that is almost certainly coming is the idea of lunch subscriptions. Long shelves cluttered the walls of all the fast casual outlets in New York, designed to provide a convenient way to pick up pre-ordered dishes without queuing for a till – adding much higher through-put at peak for the outlet and absolute convenience for the customer.

Wet Led Learnings.

The evening bar tours were diverse as always, highlighting a real breadth of outlets from sports bars to rooftop outlets, basement speakeasies, dive bars and upmarket cocktail lounges. For the most part there isn’t considerable differentiation from London, actually for the most part it’s clear that we do it better in terms of standards. Fit out’s were far from our lofty heights of design for the most part, particularly in the sports led bars, with a few exceptions of course. One stand-out trend is seeing how Brooklyn Brewery has absolutely taken the market in their home state, the brand is everywhere and by far the most popular beer in the city from the statistics we found. Set priced timed drink packages were a big part of the group proposition in both restaurants and bars, much more so than we see here in the UK. It seems that drinks ranging is far narrower for the most part, with rum and tequilla far more present and promoted that here in the UK – two categories we are told by spirit suppliers are going to be the next gin, so maybe a glimpse into the future.

Next Year

We are heading to Los Angeles next year where we have already had an amazing response to our trip by some amazing operators and leaders. Many of the biggest and most successful groups are based there and will be included on the tour. If you are interested in joining the group, get in touch with Jo Charity at Propel.

First published in Properl Quarterly.


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