In the News / Costing Beverage / Architect

Class started with a short In the News. The NY Times had a stunningly boring article detailing the details of a superior hamburger, but didn't really add much to the canon.

There was a cool article, however, on the recent state of NYC food carts. Up until the downturn in the economy, there was peace upon the streets of NYC. Food cart permits were cheap and few and far between. They were handed down within families, as well as locations and street corners. The city was not much involved -- it only gave out 3000 licenses, and the licenses can be renewed by mail every two years, forever and ever. Because of lax enforcement, many carts are not inspected, or have expired licenses, or no licenses at all.

Now people who are being laid off from white-collar jobs and speak English as a first language are investing in food carts to deliver a different level of food to the streets. They get their permits, and then go wherever they are legally allowed to go...and into direct conflict with the underground economy of the long established immigrant class. When a new truck rolls up on a corner that has been claimed by a cart family without challenge for 20 years, there is going to be conflict. Used to be when two vendors got into a tiff, one would call the cops anonymously because everyone undoubtedly were doing something illegal. These food cart trucks tend to be on the up and up, and the old economic model is turning to intimidation and violence as leverage.

The sad thing is, because of the inadequate bureaucracy, the city is losing a ton of money and has little real power over the food carts. A vendor of a new fancy ice cream cart is quoted as scoffing that he pays a few hundred dollars for a permit, when his business model would allow him to pay $5000 a month during the warm season and still be profitable.

There were small pieces on the food shows -- the Fancy Food Show had a 25% rise in attendance, while the tone of the piece on the Unfancy Food Show as equal parts snobby and dorky -- why the NY Times sucks.

Next up was an exercise in costing out a mixed drink. Unlike a recipe card, each cost card is per drink, not a batch of drinks. Most booze is in liters and recipes in ounces, which is annoying, but even more annoying is perusing the price sheets for booze vendors. For a bottle of Bombay Gin, you have about 10 different prices. Half are for NYC and half for NYS (different tax and control procedures), and within each category different prices on different size bottles and discounts depending on how many cases you purchase.

The second half of the class was a field trip to an architect's office to talk about how we, as restaurateurs, would communicate and deal with an architectural firm, from initial concept up through plans detailed enough for a contractor to build from with precision. The architect went around the room and asked each of us our concept, and teased out some details that would help a design firm get on track.

Some of us had pretty clear ideas of what we were going for, and when one didn't, the architect was pretty concise in trying to get clarity. One student kind of scattershot mentioned a lot of different things she liked that she would like to see in her operation (mosiac! bar in middle of room! stage! fountain!) and the architect basically asked what is the focus? Do you want a candyshop vibe, a restaurant vibe or something else?

I had a pretty concise statement of what I wanted (Jewish Italian Grandma style filtered through an Eames lense) and didn't get any appreciable feedback. Guess I can skip hiring a design firm and just get some hacks to have the plans drawn up and approved by the city?

Richard, a few students and I went to a pizzeria nearby the archictect's office afterwards, not very good pizza but fun to be snarky about the menu, decor and oddly-pacing owner with some like-minded fellows and fellowettes.

Monitoring Various Costs / Responsible Alcohol Service

Class started with a brief odds n' ends. I described the odd experience on Saturday of being in Coney Island at 10:30 in the morning meeting friends coming off a half marathon, and finding mobs and mobs of healthy runners lined up to buy hot dogs at Nathan's. Health freaks! Dave described a restaurant where he was there with a few people for dessert, it was empty, 1 of the four deserts they ordered was out, were charged for it anyway AND all the prices on the bill were higher than on the menu. Richard described a time when the bill for a glass of wine was higher than the menu price, and when called on it, the waiter returned to say that the menu was wrong and the bill correct. To which Richard replied, well, I'm going to pay the advertised price. Which is also the legally binding price. Liz was in Las Vegas over the weekend and was surprised how empty every single restaurant was, even the big names. Overbuilt, over hyped, overextended, goodbye to the last gilded age of over consumption.

Anyway, we continued talking about the other expenses of a restaurant, outside of food and labor. There is rent. There are three ways to pay.

• Fixed: simple, the same every month, just like residential rent. Whether the business is crap or your raking it in hand over fist, it's the same.
• Variable: The landlord gets a percentage of gross income. This in effect makes the landlord a partner, where its in his interest to generate customers for you. Mall and hotel situations see this. Makes most sense in a seasonal operation, like in a summer community.
• Mixed: Fixed fee with a variable percentage on top. Most common. As with variable, has to be an element of trust between both parties.

We spent some time on a few examples, showing how the Cost % ratio can be applied to anything in a restaurant. Cost % = Cost /Sales, so Linen Cost % = Linen Cost / Sales or Linen Cost per guest = Linen Cost / # of Customers. By comparing these number from day to day, month to month, an idea of how efficiently they're being used can emerge.

Class finished with a discussion of alcohol. Until prohibition, the law's attitude was from the medieval period. If you were an able-bodied adult, you were responsible for your own actions. If you went to a bar and got drunk, then went out and killed someone with your car, you and you alone were responsible for the harm your caused. Since prohibition, there are what are called "dram shop laws", which assign different percentages of responsibility to 3rd parties who provided alcohol to the 1st party who harmed the 2nd party.

The big no-no with 100% liability is selling alcohol to a minor, which in the U.S. is anyone under the age of 21. It's odd to regard someone who is 20 years old, who can vote, be drafted and die in the military, drive, have sex with whoever, run for elected office, work for a living, sign legally binding contracts, BUT can't drink alcohol.

Another big no-no is causing a person to become intoxicated by providing alcohol. In the U.S., the legal definition of intoxicated is .08% blood alcohol, which is 1 drink per hour for a small person and 2 drinks per hour for a medium sized person. Most bars and booze-serving establishments pretty much break this law regularly. Related to this, it is illegal to provide alcohol to someone who is already intoxicated.

We saw part two of the video about prohibition, and what a cluster-f@ck all that was. Like marijuana today, drinking alcohol became so commonplace under the ban that it eroded respect for the rule of law. Three groups were helped: criminals got a market to themselves, corrupt police and politicians buddied up to the criminals for a huge payday, and...women were now drinking in social establishments alongside men, drinking, smoking, dancing and generally getting jiggy with it like never before. Basically, everything the Prudes wanted to happen, the opposite happened. Within 4 years of the laws going into effect, city and state-level authorities gave up and handed over the responsibility and HUGE cost of enforcing prohibition to the Feds. The Feds, understaffed, underpaid and overwhelmed, became even more corrupt than the smaller bureaucracies, with Herbert Hoover's (who was a drinker himself) cabinet notorious for being totally on the take. As the criminals got sharper and more organized, it's leadership amassed so much wealth they were able to spread around their cash enough to enter the legit world. Bronfman brought Seagram's from a bootlegging operation to a multinational conglomeration, and a man named Joseph Kennedy was known as a Prohibition-era alcohol middle man who never quite got tagged for it, though his clan certainly benefited from the dirty money.

In the News / Labor Cost / Misc. Expenses / Benefits o' Booze

During today's In the News segment, I defended pizza: in the $25 and under section of the NY Times dining section, they reviewed Roberta's of Bushwick. They said it was good pizza, but despite that they offered some good interesting dishes. Hrumph!

A good portion of the class was dedicated to labor cost. Based on how busy a dinner shift was, we scheduled servers, bussers, hosts and bartenders, taking into account how much they were paid, expected number of covers and average check. I don't like exercises like this because the feedback you get from it can be guesstimated from just vibing the business of a room. In the resto biz, when things are slow, it's acceptable to send extra staff home, and it's also normal to call up people who are on informal call. Filling us students with formulas and numbers...I don't know, there needs to be a balance, an expectation that we will learn when things really need to be calculated, written and statistically analyzed, and when things can just be winged.

Up to this point, we studied cost control in terms of food and in terms of labor. Today we looked at "other expenses". While a restaurant only has one primary source of income, there are plenty of sources of expenses aside from labor and food.

• Operating expenses (linen, uniforms, china & glass, kitchen utensils, cleaning, decoration)
• Music and entertainment (live or mechanical, ASCAP, booking agents, meals to musicians)
• Marketing (mail, phone, internet, comped food, ads, signs, copies, public relations, agents)
• Administrative (data processing, office supplies, postage, cash over or under, bank fees)
• Facility maintenance (fixtures, equipment, air conditioning, refrigeration, electrical, floors and carpets)
• Occupancy (rent or mortgage, equipment lease, real estate tax, insurance, depreciation, licenses)

This is a very annotated list. If I was working up my business plan, I'd be tearing my short hairs right now...

To control costs like this, there are two key ways to categorize them. The first way is by fixed, variable or mixed. Ask this question: If no one comes to the restaurant one night, will the expense cost less? If people come, will the expense cost more?

Whether people come in or not, rent and salaries will remain the same -- fixed. If no one comes in, I can send lower level salaried people home and the food can be served tomorrow -- variable. If no one comes in, I still have to pay for air conditioning and side towels, but if people come in, I'll have to crank up the air and use more side towels -- mixed.

The other way to categorize costs is by controllable or uncontrollable. Hourly wages are controllable -- if the biz starts to go south, I can cut people's pay or lay people off to adjust in the short term. Rent for a restaurant is usually determined by a multi-year lease -- if the biz is tanking, it could be years to a lease renegotiation, therefore it is uncontrollable.

The last part of the class was more talk of our friend alcohol, which is leading to Monday's discussion on liability issues. Alcohol has beneficial qualities. The wine industry had to sue the FDA to go public with scientifically proven evidence that alcohol can be a positive influence, but still the government insists that bars post signs warning pregnant women away from booze, despite the fact that all the studies from the 80s that claimed alcohol hurts fetuses have all been disproven. It's been shown that moderate alcohol consumption through out pregnancy does NOT hurt babies, and it's been shown that alcohol abuse in the 2nd and 3rd trimesters also does not hurt unborn children. Only alcohol abuse in the 1st trimester, a time when many women don't know they are pregnant, has been shown to cause all sorts of developmental issues.

There's the whole French paradox thing, where despite eating much more animal fats than the U.S., the consumption of red wine keeps down cholesterol. In fact, in recent years the French have had an anti-alcohol (oh, excuse me, anti drunk driving) move that has directly lead to a spike in heart disease. Alcohol thins blood, letting less stuff clump up -- the same rason docs recommend an aspirin a day, only this is so much more tasty and pleasurable. Moderate (2 glasses or less for the averaged size person) on a daily basis has health benefits, but 14 glasses one day a week would lead to all the alcohol problems reviewed yesterday.

Labor / Trends / Alcohol Physiology

Class started with an odds n' ends. Jennilee was at a Mexican restaurant where an old-school piercing fire alarm went off for a solid half hour. She was one f the few people in the establishment, and no one ever came over to explain what was happening, the staff just sat around dumbly, neither moving or calming. What basically had a negative outcome could have been spun positive by just a little human touch, or perhaps a free drink. I told the tale of the miserable meal I had with B at Kelly & Ping in Soho (who the hell fills a shumai with tuna fish and doesn't warn the customer?) Liz and her boyfriend ordered food from Dominos, and had a good time following along on the site as they informed her that her pizza was being prepped, in the oven, packaging for delivery, on the way, etc. Richard suspects it's all a bit of bullshittery, but ya never know.

We crunched numbers on labor costs. Spinning for the # of guests served, labor hours used, average wage and average guest check amount, all sorts of statistics were spun out: labor dollar per guest served, guest served per labor hour, labor cost percentage, etc. A restaurant can be broken down into parts, whether it's simply back of house and front of house or by station, and a sales per labor hour can be calculated for each person. If one part is over or understaffed for whatever reason, these stats will tease it out.

We had a guest speaker from an ad agency who specialized in restaurants and food retail, and was pretty underwhelming. A one-dimensional PowerPoint listed trends this year, some a little interesting, some self-evident, some totally inane. Maybe part of it was the speaker, a lower level rep who was stepping in for someone who got badly bitten by a pit bull. But part of it was their list of current trends: Food as pop culture (with a pic of Rachel Ray in a bikini top licking a fudgy wooden spoon while gazing at the camera with wide dumb cow eyes) is a gimme, as is the local-seasonal-green-community angle. But "blind dining", the trendlette to eat a meal while in the dark or blindfolded? Do I need to pay an ad agency to tell me that comfort food, cheap food and international street food are trendy?

Even more egregious were the tips for guerrilla marketing. First, if I'm going to pay an ad agency, aren't I committing right there to mainstream traditional marketing? Isn't the point of guerrilla marketing so I DON'T have to pay an ad agency? The list of tactics kind of reached this conclusion for me: website, social networking, reach out to food blogs, etc -- all stuff that can be done free or on the cheap.

The only trends that caught my ear was tea -- as an ingredient. People tend to think of tea as 'healthy', and the flavor profiles of different teas could be kinda cool, Another was 'micro-size'. Portions have always been either too huge, or back in the 80s ridiculously small. Reducing portion size to reflect a healthier way of eating AND reduce prices (while maintaining a good food cost percent) kind of turns me on. But for these two cool trends, the agency person spouted silliness like "underground dining", informal food clubs and hosted dinners where instead of being with friends, you pay strangers to enter their homes and eat their food. I think people are doing that to totally escape the reach of douche bag trend marketers....

Class concluded with a look at the physiological effects of alcohol....or more precisely, alcohol abuse. A drink of booze is not such a bad thing. Drinking too much will destroy you. As is the modus operandi of most fear-mongering absolutists (hello, MADD!), what is defined as 'abuse' is never really made clear, but the results of abuse abundantly so.

From a drink, a small amount of alcohol can be absorbed in the mouth. So even if you taste and spit, you can theoretically get drunk, Down the throat, alcohol is toxic to the lining of the esophagus, and abuse will increase the chances of cancer here. In the heart, abuse will raise blood pressure and increase heart size due to increased fat. Most alcohol is metabolized in the liver, where abuse will turn it into foie gras -- fatty and enlarged, a.k.a. cirrhosis. Twenty percent of alcohol enters the bloodstream through the stomach, where too much will tear up stomach walls and have all sorts of pleasant symptoms. Most alcohol enters the blood through the small intestine, which is why a vodka enema is so dangerous. Inflammation, pain, bleeding, I need not write more.

And the kicker to this is what the U.S.A. now defines as abuse: the legal definition of alcohol intoxication. A blood alcohol level of .08% makes it illegal to drive. That's one drink for a petite woman, 2 drinks for the majority of the population within one hour. If that is 'abuse', then we are a world of abusers. Who says prohibition can't happen again?

Introduction to Beverage Management

The day kicked off with a long missing in the news segment. According to daily freebie AMNY, food stylists actually take pictures of inedible things that look edible! Shocker! Down where the old Fulton fish market used to live on the old southern tip of Manhattan, a new foodie market is emerging. After seeing the new fish market up in Hunts Point, which is literally the middle of nowhere, it's nice to see a real market pop up where the people are.

Richard covered the history of the beverage -- from the dawn of man to its presence on today's college campuses -- in a few hours with enough time to spare to show a documentary about the U.S.'s 13 years of Prohibition. In the beginning, there was water, and it was good. Juice from fruit and extracts, too. About six to eight thousand years ago, alcohol was not so much discovered so much as stumbled upon. When a sugar or starch is introduced to yeast in a properly moist environment, fermentation occurs. Yeast eats the food and produces CO2, heat, and alcohol. The first naturally occurring alcohols to be consumed by man were most likely fruit-based, as the grain-based fermentation take a bit of processing of the grain.

In early history, alcoholic beverages became the go-to daily drinks for health and hydration because it was safer. No one knew why relieving one's self in the same river from which you drink was a bad idea, and they didn't know why that water made you sick (while the beer and mead made from the water did not). It was a short step to steeping healing herbs and berries in alcohol to create tonics and elixirs that also happened to get you messed up. Gin, that's simply distilled alcohol steeped with juniper berries.

Distillation was introduced by the Moors, most likely for the purpose of making perfume, not drinkin'. Distillation is simply cooking the fermented beverage, collecting the evaporated alcohol, and re-condensing it. This process lead to stronger, condensed alcoholic beverages that could travel longer than an unpasteurized beer. Ahoy, pirates and brandy! Colonists ditched the boats at Plymouth Rock because they were out of beer. There was nothing else safe to drink unless they went inland.

All major religions at one point or another embraced alcohol in ceremonies, as alcohol was revered for its safety and pleasure-giving qualities before the establishment of religion as we know it. That said, due to alcohol's ability to be transcendental and give relief, it was also in conflict with certain aspects of religious practice, and has been suppressed by all sorts ever since.

The young United States found that towns tended to have two social centers: the church and the saloon. In the Church, you sat there and got spoken to. In the saloon, you socialized, you pleasured yourself, and the business of the day got done. Politics were at the bar. The problem with this formula was that saloons were all male (unless you were a certain kind of lady); it was this imbalance of power that lead to the original women's movement being focused on temperance.

We watched a documentary on Prohibition, during which the United States basically destroyed all the foodways that anchored society to a healthy perspective on alcohol. The ban served to do exactly the opposite of what the banners hoped: alcohol consumption rose, a large criminal underground swelled, people drank more for the pleasure of being naughty, respect for law and government was eroded, and in the end one group emerged as drinkers where they never drank before: women.

To this day, the United States is under the yoke of the aftershocks of Prohibition. When Prohibition was lifted, a lot of the controls on booze that were introduced remain n effect today. Why? Because the government can closely track -- and tax -- all alcohol being produced. Food consumption is easy to fudge; not so with booze, from a restaurant's liquor license down to a distributor's tight controls on inventory. It's just too profitable for the government to let go of. Now imagine if the government did to marijuana and prostitution what it does to booze and ciggies! We'd fuck and bong our way out of the recession...

There is a mini-Prohibition going on in college campuses today. It's a weird situation in which part of the social community is under 21, another over, and they both hang out. Underage drinking is the standard, and lately college presidents have called for a review of the drinking laws....after which they were mercilessly attacked by Mothers Against Drunk Driving (among other naysayers) who don't appreciate that history repeats itself: ban booze, and people flout the law, drink more, and do more damage than if it was not banned. -sigh-

It's nice not to fall asleep in class!

Beverage Management

In Odds n' Ends, New Jersey Dave went to "Famous Dave's" with a date and forgot his wallet. Chicago Liz's general manager at the Mexican restaurant where she works paid cash in advance for a beer and liquor delivery that never materialized, and the place only had a case of beer....for the entire weekend. Guytano told about a conversation he had with a local town board member, who didn't want to discuss why a new pizza competitor got a parking lot immediately, even though it took years for his restaurant to get one. The board member basically told him to mind his own business, implying that something very shady was going on.

I told two stories, one about the new egg cake cart-storefront that just opened near the dirty old egg cake cart run by an old Chinese guy, who always has a line. While the new cart-storefront is very nice looking, it's $2 for 8 pieces and $5 for 24 -- while the old cart is $1 for 20 pieces. Really, as you can see in the pic, he has a line and the new place got zilch.

I told the story of the Saturday we just went through at the store...an excerpt from my personal blog....

I got in at 4am, after working 14.5 hours in the restaurant then riding about 30 miles round trip to Coney Island for hot dogs and some listening to the waves. The day at the restaurant started on a high note, then slowly slipped away inch by inch until coming to a complete crashing by the end. Friday was long, and nobody got enough sleep to start on Saturday. We open at 12 instead of 11:30 on Saturday, but its still not enough time to prep. L and his family were late by an hour, and by the time they arrived, I had everyone in and prepping, moving along well, got L in a good-ish mood. Then service started, we weren't finished with prep by a long shot, and we got slammed with too many customers, a system where only 1 pizza is made at a time, kept on running out of stuff, prepping to order, L started getting yelly at everyone, and on top of it, for some odd reason the air conditioning decided to not function and the temp in both the dining room and kitchen rose close to 90. We broke for lunch and closed the restaurant for an hour and a half. I had the guys do some prepping, but the dishes were backed up and as it turned out, even with a dishwasher, there wasn't enough dishes -- we had to serve on paper plates at one point in the night! We cancelled delivery, but L took an order for 17 pizzas anyway -- at 8:30pm, at the height of the rush! Things spiralled downwards, with the refrigeration in the back failing because of the excessive heat. Between moving food between units, suffering a lazy dishwasher and a delivery person who was sent back there to help but didn't do shit, L withdrawing and losing his energy and focus, the heat rising, my guys prepping and never catching up, and just wanting to hide in the cold walk-in refrigerated room and drink lemonade until it all just stopped.

And that was that!

The next half of the class was beverage management (during which I got a call from L and spoke for a while, missing a good hunk of the accounting side of this topic). In a nutshell, McDonald's would rather sell coca cola than hamburgers. The soda is a shelf-stable product that is only made when ordered, takes very little special equipment, little training, is made by someone else but is more profitable than the stuff they make. Beverages in a restaurant simply are a huge profit center, often more than food. Liquor licenses maybe hard to get, but they can be worth the hassle.

Beverages are basically broken down into four classifications:

• Beer - fermented grain
• Wine - fermented fruit
• Spirits - fermented and distilled
• Soft - non-alcoholic

And soft drinks are further broken down into:

• Coffee & tea
• Soda
• Juice
• Dairy
• Waters

As with food, one needs standardized recipes to help predict ordering and revenue. A one-ounce pour of wine is a heck of a lot different than a 1.75 ounce pour. Richard discussed a system in which a pourer is connected to a wine bottle, and a magnetic ring is attached. After a pour, the magnetic rind locks the pourer until the drink is rung up on the register. Now THAT is beverage control!

Purchasing can be tricky, especially for a full bar -- people tend to expect their favorite brands, which can add up to a lot of inventory. A place with a specific concept can get away with a shorter inventory.