Interruption

Due to the lil' critter above, I am missing class this week. Will be back on it Monday.

BTW, that's Edie Bird, about 36 hours old, and she loves to drink milk straight from the source, raw and unhomogenized.

In the News / Student Concept Presenations

We began with in the news. After seeing a few documentaries about prohibition, it was pretty funny to see an article in the New York Times about the recent trend in new bars to be stylized after Prohibition-era speak-easies. The problem? Since the supply was illegal the quality of the booze was low and a lot of drinks had to be mixed with strong, sweet stuff to mask the flavor. I think this new trend should involve poor-quality bathtub gin, a total lack of licensing, and incorporate other illegal activities -- drugs, prostitution, and dancing without a cabaret license! Now THAT would be authentic.

Time Out New York had a pretty typical spread hyping a handful of new pizzerias in NYC, but more interesting was the recent article in Newsweek, which questioned the viability of all these new trendy pizzerias -- what about the old school slice joints that are getting squeezed out? I think the argument is specious -- the old school places have never had it so good, and the new places are riding their coattails. At some point the new places will shake out, but the places that have been around for years and years will survive.

The Times had a pretty ridiculous opinion piece about the U.K. judiciary that just ruled that Pringles are, for tax purposes, potato chips, unlike what Proctor & Gamble were calling them, "savory snacks," to get out of paying millions of pounds in VAT taxes.

Most of the day was dedicated to Jenni, Guytano, and Niko giving presentations on their concept menus. Both Jenni and Guytano's concepts were expansions to the restaurants where they are currently working. Jenni's restaurant owners are opening up a cafe and gelato shop, where they will roast their own beans and make their own ice creams, out in the North Fork of Long Island. Guytano's pizzeria is opening an attached wine bar with a small trattoria-style menu, out in Long Island. Niko gave a long and rambling talk about a Georgian wine & jazz bar, but with his thickly accented low monotone, he literally made me fall asleep.

Class concluded with a short P&L statement, working out the variance and variance percentages between years by costs and profits.

No class Monday, talk to ya Wednesday!

P and L Statements / Concept Presentation / Bar Design

Today began with a passioned discussion over why people go to bars. There are different kinds of customers. Though some people fit more than one description, they are broken down thusly:

• Diners at restaurants which have drinks
• Drop-in customers on their way elsewhere
• Meet-and-go customers
• Entertainment seekers looking for relaxation or stimulation
• Sports fans
• Regular patrons of a neighborhood establishment

"Meet-and-go customers" was perhaps the corniest euphemism for people looking to get laid; the textbook description is kinda hilarious, so here ya go:

Meet-and-go customers. These individuals are looking for a relationship connection, whether a date for the evening or a longer-term plan. They go to singles-bars or "meet bars" that are attractive to others like themselves. They stay long enough to meet someone whom they would like to spend the evening with, and the tow may or may not move on to a place where the food and/or the entertainment is more suitable for leisurely conversation and an evening together. Today most singles bars include dancing and very-late-night hours.

Yeah, another place where the food and/or entertainment is more suitable....like mah pants!!

Anyway, as with any restaurant, the needs and wants of a bar's customers determine the concept, which breaks down into three fundamentals that reinforce each other: Design & Decor, Service, and Food & Beverage. Each group of bar customers, as listed above, has its own needs that must be catered to in these three areas.

There are certain standards that all bar customers expect in the U.S. Number one is a large variety of alcohol. Unless you desire something esoteric, chances are a typically stocked bar will offer you hundreds, if not thousands, of combinations and concoctions. The other main expectation among customers is that the quality of the drink matches the quality of the establishment. For example, one who orders a gin and tonic at a local dive bar can expect well gin and tonic out of a soda gun. From a 4-star restaurant bar? An expensive brand gin and house-made tonic with a juniper berry garnish.

We looked at the space requirements of a properly designed bar. Between the back bar, the space for people inside, the front bar, the rails, the space in front and behind a stool, the total space for ONE bar customer is 28 square feet (2 feet wide by 14 feet deep). That's a hell of a lot of space to dedicate to one seat. We also looked at layouts: How one places the bar in relation to the seating, dance floor, and restaurant will influence flow and either work with or fight against the concept (and the kind of customer that's being served). An airport bar will be long and skinny with an open front so that people can get in and out quickly to make their plane. A pick-up joint will have a central bar where people can congregate in 360 degrees and check each other out from all angles.

Mid-class, Maria and I gave presentations on our concept. Maria's idea centered around a very straight-ahead tavern with an extensive American bar menu. I used a PowerPoint presentation to give some details of a neighborhood pizzeria and pasta shop, about 30 seats, maybe in Brooklyn, named after my mom's maiden name (with my mom's image as a young hipster all over it -- see enclosed).

The last part of the class was an exercise in reading and understanding a profit & loss statement. It looks like a big scary sheet of numbers flying out in all directions, but when looked at part by part, it's actually quite simple. First part is the money you take in, broken down by food and bev, then added up. The second part is what you spent just on food and bev, and the third part is what you spent on everything else. The money you made on food and bev after paying for the food and bev is the contribution margin, and that margin should cover all expenses AND give a profit to the owner. And man, the expenses just go on and on. By analyzing cost percents (cost of an item divided by total sales) across different years, one can figure out what's efficient and what's slacking. Really, there are multiple ways to read the numbers, all true but all suggest different actions to be taken. Accounting, it's a hell of a game.

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!