Why Your Favorite Restaurant is Struggling, the Truth About Michelin, and the 1% Transparency Rule w/ Anton Kinloch (Part 2) - Ep. 29

SPEAKER_01 0:00

I mean, for me, I've always been an advocate for transparency, and I think that that's something that has been unfortunately ingrained into us as hospitality professionals. That like we are we're here to set the room, we're here to give our guests a good experience and a positive experience, and we want to be able to transport them away from their cares and their worries. But we've done it for so long at such a level that we've now prevented ourselves from being able to be transparent with our guests and say, you know what, we have this great relationship with you. We want to also share with you some of the challenges that we're facing. It's almost kind of frowned upon to actively discuss what the realities of running an FB business actually are, because it takes away from the magic of think of the Wizard of Oz. Like you pull back the curtain, you see a tiny little man running this giant apparatus. Well, this is exactly how F B runs. It's literally a couple of people pulling all the strings, making this whole thing possible, and guests only get a brief glimpse into that world for about an hour and a half to two and a half hours, depending on the party size. So their view, their opinion is very narrow of what the bigger picture really is. And I think that being fully transparent with what costs are, what the realities are with our guests is not going to necessarily alienate them. It's rather going to bring them into the fold because now they feel like we can trust them enough implicitly to share our weaknesses, our vulnerabilities. And as I said, unfortunately, the hospitality industry has been conditioned over the years that we cannot lose face. And I think it's important to look at great examples of that. Look at um have you been following the trend with Renee Rzeppi from Noma and how he was No.

SPEAKER_00 1:57

I'm not familiar with that.

SPEAKER_01 1:59

So NOMA was was for a while one of the regarded one of the best restaurants in the world, but getting to that point also required great sacrifice. And Renee has been accused of, and it's been proven later on, that he was physically abusing his staff. There were firsthand accounts of physical abuse before, during, and after service for what seemed to be kind of the most trivial of things, like a smudge on a glass or uh a pair of tweezers imprinting on a petal of of a flour on a dessert. Like there were real-life harsh consequences for those for those people. And on top of that, those one, two, three Mich One Star restaurants, some of them run almost exclusively on unpaid labor. Stages, people who are coming from several cities over, several states, several countries over to work at this one venue unpaid for weeks, sometimes months.

SPEAKER_00 3:01

Really?

SPEAKER_01 3:02

Yeah. And all they do is they contribute to the bottom line of that venue. But at the end of the day, they are unpaid, and their experience, their payoff, their paycheck, quote unquote, is in experience. And you sure you can put that on your resume and say, hey, I worked at NOMA in Copenhagen for three months or five months or six months. What people don't realize and don't acknowledge is that yes, you might have worked there for that time, but during that time, you were being physically and verbally abused, you were unpaid, you were working 14, 16, 18 hour shifts a day, five days a week. And this was all normalized. This was all glorified, even. Like if you worked in this industry, you had to sacrifice a portion of yourself in order to level up. And I think that we are finally coming round as a industry in general, saying, you know what, this is not sustainable. Not just like financially, but also this business is not sustainable for our staff emotionally and physically because we cannot continue to abuse our staff to this level.

SPEAKER_00 4:09

Well, I had no idea that that was so what uh I mean what happened to that uh that that guy is so so so so Renee Rodzeppi uh resigned from NOMA.

SPEAKER_01 4:22

Um he's still still actively involved as a member as part of the um as as one of the chairs or or somebody who's still financially involved. So at the end of the day, he's his reputation is gonna suffer, but financially he's not gonna lose nearly as much as he possibly could or should. But I've had literal friends who have worked there, and they've told me firsthand accounts of what they've experienced, and it's just shocking. But at the same time, I think being in this industry for 25 years, I'm almost unfazed by these things because it's just kind of like, yeah, this is this is normal. But it's like if you go into the fintech industry or you go into construction industry, you don't really anticipate that people are going to get physically and verbally abused or sexually assaulted because that's their protections in place. There are things in there that help support them, but in the food and beverage scene, we've always been underrepresented, we've always been under supported, and unfortunately, that's just kind of the reality of things, and it's now taken until 2026 to finally boil to the surface where we're all just kind of a little pissed off and saying, you know what, enough is enough. We gotta pull back the curtain, we gotta show the world like just how bad it really is in our in our line of work.

SPEAKER_00 5:45

Forgive my ignorance on this question, but does the food and beverage industry have something like uh to the likes of like a union?

SPEAKER_01 5:58

Not necessarily. Unfortunately, like that's that's kind of the thing is like a lot of these unions or a lot of these grassroots movements are quite literally that. They're just very, very small outfits, and they've only popped up within the last like five years. So prior to there was really not a ton of support in terms of unionizing or even letting staff know what their rights are. So a lot of it was just entrepreneurs, especially very smart ones, who said that they could capitalize on their labor by suppressing wages, by wage theft, uh, either stripping tips away or uh sharing tips collectively with the group of people, um turning people's hours down or reducing their hourly wage for whatever reason. Like, there's a lot of things that unfortunately do go on that are just not publicly known to the average consumer. And I'm not surprised, but that's just kind of the reality of this industry. And I think this is where an interview like this is so important because this is going to help shed some light to the average person who's listening in, saying, like, oh wow, I was not aware of that. It's like, of course you weren't aware because you don't know what you don't know, because we as an industry have always been very secretive. We've always been about showcasing the positive, bubbly, kind of fun side of the industry. How do we make things memorable? But at the end of the day, we also do it by capitalizing on the labor of the people that we work with.

SPEAKER_00 7:30

Yeah, no, I I mean, yeah, I I had no idea that this it you know that went on to the extent it is it you uh you know, you're saying it does, and um it's you know, like it's I I feel like for things like this awareness is like the biggest hurdle to making you know making some kind of change. And it's you know, it sounds like because it almost to me feels like it's such a s like isolated bubble, kind of the industry you guys are in, that the for some reason it makes me think of just this uh kind of I get the image in my head of like if like someone you know, if someone's trying to speak out and it's it can only be heard inside inside the bubble that you guys are in, and inside that environment, and no one outside is really hearing it. And then especially you know, I feel like with um like I know a lot of there, you know, there's a lot of these uh food and beverage uh businesses that are you know owned by prolific, high profile people and and the you know the status of you know, like in the example you gave where people are working for unpaid just for to be able to put that name on their resume, it uh it feels like a lot of the support, I guess do you feel like a lot of the support to actually get any change in your industry in uh in this regard? Like really has to come from people like you who are the ones building these and operating them and defining and building the cultures within them?

SPEAKER_01 9:32

Is oh yeah, 100%. I think it all has to come from it not only has to come from inside, it has to come from people who are actively involved in this industry and are very vocal, but are also very recognizable. I think that as a society in general, we look at figures that we can trust or we believe we can trust, and we kind of start to align our values to those people. And the F and B business is is pretty much no different in that respect. Like there are, I can count probably on both hands, the amount of people who I know are amazing advocates for this industry who genuinely represent this industry in our interests, and then there are plenty of people in our own industry who are opportunistic, who have the means to kind of use and abuse the system, and then there's also people who are blissfully unaware, people who are unfortunately on the lower end of the totem pole, so to speak, who don't have the exposure to that information, who don't know necessarily that these things are going on, and they just go about their day because what they see, and this is where social media can sometimes be kind of a deterrent uh issue, is that it paints this kind of like altered image. And unfortunately, as a result in in hospitality, a lot of people do live in a world with rose-colored glasses where everything looks beautiful, but the reality is that it's it's really not. And the moment we start to peel that back, we start to look at the the physical, the the financial, the mental, the pardon my French, the sexual abuse that goes into this industry that makes it turn, uh, it starts to make you kind of question everything about what you thought you knew about this business as you get older. In fact, I was just reading an article recently, there was an interview with somebody who was a judge for the world's 50 best bars, and he actually pulled back the curtain saying, Hey, it's not that hard to get onto the list of 50 best bars anymore because all you have to do is get to know the judges, invite them over to your place for a guest shift, have a PR company who's gonna throw a bunch of money at them to basically get you onto that list. So it's basically a pay-to-play type of outfit. And then recently, last week, I was reading an article about how you probably might have heard about this as well, how uh Cisco, the food distributor, they acquired uh Restaurant Depot, Jetro, which is a cash and carry operation, which is significant because a lot of FB outfits, especially smaller ones like myself, we don't have the luxury of spending our money with Cisco because of the high of the high uh costs, the issues we have with deliveries, as well as other logistics problems. But Restaurant Depot has always been very good to us because it is a low-cost alternative to working with a direct distributor that delivers. You can just go in there, buy your stuff, put it onto a cart, check out, package it up, kind of like Walmart or Costco or BJ's, but just on the restaurant level. Well, Cisco has since not only acquired them, but they have also partnered up with the Michelin guide. And the Michelin Guide has always been kind of a status symbol. Well, you work your butt off for years to get recognized by the Michelin Guide to get either a one or a two or three-star rating. And Cisco has always been historically associated with fast casual food chains. So the fact that the two are now partnering up just breeds a lot of like contempt in our industry for the Michelin guide because now it feels like the values of that prestigious organization have basically been uh poisoned.

SPEAKER_00 13:42

That's that's super interesting. And it's for me and anyone else out there, like I I feel like everyone knows, you know, what a Mich you know, a restaurant having a Michelin star is, and like that being you know, I think, I believe, the highest, you know, or one of the highest honors you can get as a restaurant. Um what is what exactly like I and I guess not talking about now or how that may have changed right now, but in the past, like what what did it take to get a Michelin star?

SPEAKER_01 14:22

I mean in the past their their expectations, their qualifications really were about uh sustainability, about quality, about working with your local farm partner and really showcasing seasonality and above all consistency. So if an inspector came in in July, that same dish that was on the menu was going to be just as consistent in October. And the staff, the steps of service of the staff coming up to your table, checking with you your water preference, pausing in the silverware, clearing the table, uh, resetting the table, all of those steps, all those things that kind of seem to be very unimportant, those are the things that the guide was looking at very strictly. Now it's it almost feels kind of like just like with the 50 best guide, where it almost feels like you can pretty much just buy your way in. If if you're if you're offering a consistent product, which Cisco offers, but it's it's commoditized, it's commercialized, it's it's very streamlined, there's no kind of fluctuation or variation in the product. Whereas, like historically, with the Michelin guide, if you're working with a farm partner, that duck that you get in July might be different from the duck you get in October, or those berries that you get in in September are going to be completely different from ones you get in November. And that's kind of important to kind of take into consideration where now we can get produce year-round. We can get those same products year-round. We can get avocados on any coast, we can get pineapples on any coast. And a lot of smaller outfits that are still trying to push that higher end narrative are saying, no, we're not gonna get available products that are available year-round. We want to work exclusively with our local farm partners and only source what is available at that time, at the peak of its freshness, and that's what we're gonna put on the table. And unfortunately, that can sometimes be a disqualifier for the Michelin guide because they'll look at it and say, Well, I wanted this, and this is what you have instead, and this is not not what I'm expecting. And they can dock you for points, unfortunately.

SPEAKER_00 16:43

Well, that's uh it seems kind of unfair. Uh it is. Especially when I mean you're talking about, you know, the difference between um you know, ingredients sourced for locally uh and seasonally versus you know um these big chains, big supply chains that are just pumping them out. Like I feel like it's it kind of sounds like you could almost it would be easier if all things remain the same to get a Michelin star with Tyson chickens that are raised in a cage because they're all raised in a cage and they're all you know have there's all the same additives and uh you know, all the you know, the bad shit uh that make it make those not the same quality of chicken than if you went to a local farm and they were raised on the farm. Uh is like is that is that true? Like is is because that that seems crazy to say out loud that's totally it's totally crazy to say out loud, but that's really the where it's going.

SPEAKER_01 18:02

I mean, uh up until recently, the Michelin guide even had a green star that they awarded to uh F and B outfits specifically for those who had a sustainable program in place. And that meant that it was a closed-loop system where your waste was literally being reutilized in some capacity. Like let's just say I have a case of pineapples. Well, we use a portion of them for the drinks, we use the tops of them, the leaves for the garnish, we use the actual juice of the pineapple for a cocktail, and we might dehydrate the pineapple itself, like whatever is on its way out, into an actual dehydrated garnish. Or we could turn it into a powder or foam or some other kind of creative solution. Well, all of that now is going away. So as of recently, the Michelin guide announced that they're uh redacting and they're actually taking away the Green Star Award previously awarded to FB restaurants that were all focused on sustainability because it just doesn't make sense. And the common denominator, unfortunately, is Cisco, because Cisco is not a green program, they're not a sustainable program. They are like what you just said, they are all about commodity, they're about volume, they're about how can we pump out as many chickens, as many strawberries, as many raspberries as possible from all these different regions throughout the country, and then basically centralize them into a distributor and then ship them out to different warehouses?

SPEAKER_00 19:36

The Michelin guide, is this does anyone own this or like what is like what is the I guess like the the actual organizational structure of like of this board organization? Like it is how it like who gets to make the decisions and more importantly, who benefits from this?

SPEAKER_01 20:04

Like I as far as I understand about the Michelin guide, there is definitely a uh board of trustees. There's a there's a board of chairs as well that is involved in the daily uh operations. There is a whole subcommittee of inspectors that are vetted. But at the end of the day, a lot of these positions, uh, especially with the trustees, these are high-ranking, high-profile, high dollar value individuals. So the only people who really benefit are the ones who are partnering up with Cisco, either in the form of, my assumption, uh, kickbacks from the company directly to help kind of promote a specific venue, or the venue itself might happen to know somebody on the on the chair and might throw money at them. But unfortunately, the system is no longer as anonymous as it once was, and it's disappointing because like this was a very prestigious award that restaurants fought tooth and nail for, and at a certain point you just start to hit a plateau and say, you know what, it's not sustainable anymore to make this happen. I mean, look at Marco Pierre White, the one chef that I know who actually made Gordon Ramsey cry. He is absolutely incredible. He's a such a wonderful, such a humble human being. I I met him once, and he said that he turned in, he declined all of his stars in the Michelin guide, not because of principle, but because it was not sustainable. Because they were looking, even back then in the early 90s at consistency, and he was not able to produce it because he was dealing with farm partners. He was dealing with products that have variability. And he said, Look, I can put out a dock dish three times, five times, ten times a night, but you're gonna get a slightly different variation. Because the fat content, the temperature, all these other outside factors are just not something we have total control over, and we have to be cognizant of that. And when the Michelin guy turned him down, he said, Well, if that's the case, I'm gonna turn I'm gonna decline my my stars. I'm just gonna continue cooking because I love to do it. I don't want it to be now a matter of accolades and awards and and being held to a higher standard. I just want to do what I love.

SPEAKER_00 22:28

Which the It's a shame. And it feels like that's part of it feels like that's part of the art or the beauty of the food and beverage industry is that the lack of you know, the lack of consistency and the diff how you know the different experience you could you can get because of you know good reasons or good factors with uh you know, like you what you mentioned with the duck and the fat content and the seasonality and uh all these variables that make you know I th I feel like that's that should be something that is celebrated, not not something that you're uh kind of punished for.

SPEAKER_01 23:16

Um, unfortunately, that's where that's where we're at in this day and age. I think that if you look at hospitality chains, especially those like Applebee's or Texas Roadhouse or TGI Fridays, like they are lauded because of the consistency. Guests flock there because of the consistency, because they know that between Anaheim, California, and Brooklyn, New York, you could show up to one of these chain restaurants and you know that it's gonna be the same exact experience wherever you go. And that unfortunately is just kind of uh that is a shift in the consumer mindset post-pandemic, which we are we are fighting against.

SPEAKER_00 24:00

And when you were talking about you know, all the way back to uh transparency, um how do you guys your establishment, how do you practice like what does that actually look like? Uh you know, being transparent about your industry, because I mean like right like right now you and I talking, like this is you're being extremely transparent and opening my eyes to a completely different side of you know that world that I had no idea existed. Um and you know, like as far as impactfulness goes, like I will never see this industry again now as a result of. So like in one conversation, you've been able to change my entire perspective on an entire industry that I you know that I am a consumer of, you know, all the time, you know. Um but how how does that how do you do that within your business? And because it um I mean I've never I've never been to an establishment that has mirrored any type of transparency about any of the things that you've talked about. Uh the closest being just a restaurant that uh has a sign saying that all of our ingredients are locally locally sourced, which but that that's about the extent of it.

SPEAKER_01 25:37

Yeah, it's it's it's definitely gonna take some time for people to come around. I think that oftentimes in in hospitality in general, like we all are terrified of what people will think if we pull back the curtain. But at the end of the day, like for us, it's it's the 1% rule where you take whatever you're doing and you're doing it incrementally 1% better every single time. And I apply that to or it's transparency as well, where I will publicly and openly share with my guests, like, hey, this is what we paid this week for lettuce or bell peppers or avocados or tomatoes. I mean, there was a point where tomatoes were $85 a case. 25 25 pound case, $85. It's astronomical, but that's just the reality of things. And I think that by practicing that, by putting it out on social media especially, is how you get people to really rally behind you because they start to now develop this level of trust. Initially, you got them to trust you by coming in, spending their money, having a great experience, remembering it. Now they have that connection point, and now we're building off of that connection point by saying, Look, we're gonna be very honest with you, we're in the business of making money, just like everyone else. But our ingredients have gone up, our labor has gone up, our utilities have gone up. Here's what it actually costs us to run this business. So when you look at that dish and you say, Oh my god, $27 for X, guess what? Over 85%, over 90% of that nowadays is literally lost to costs. And then once you factor in the variability and the seasonality, that's an additional 5%. So now you literally have this 5% margin to work with, and that's if you're lucky. That doesn't take into consideration all of the potential things that could go horribly wrong, like today my chest my stand-up freezer in the bar just went, and it went from being a deep freezer that goes down to negative 11 to all of a sudden identifying as a proofing box that reads 44 degrees. And it's like, holy shit, I just had to throw away $400 worth of product that I'll never be able to recoup. And it costs me more money to call the insurance company and put in a claim for a lost product than just eating it and saying, alright, cool, I'm just gonna have to call a technician to go repair this and pay for the call, which is gonna be a couple hundred dollars for the refrigerant that's a couple hundred dollars, like all these other unforeseen factors that we're just supposed to absorb. So having conversations like this that are very candid are, in my opinion, very important because then it kind of helps pull back the curtain and give you and and other people kind of perspective of like, hey, this industry is already difficult as it is, but now it's even more challenging, and we're not asking for people to be sympathetic and say, oh my god, I'm so sorry. It's more like, hey, do you mind just coming in one extra time a week? Do you mind coming in and sharing a review of us on Google or on Yelp or on social media or doing something to kind of acknowledge us? Things that don't necessarily even cost extra money from you, the consumer. It's just you want us to be around, please make it so by just actively participating in what we're doing.

SPEAKER_00 29:09

Yeah, no, and I mean it's the even just like the review portion, like it's um I feel like that's something that is um is not often asked for, but must make, you know. But then when as a consumer, when if we go if you know, if my wife and I go to a new city and we're looking for places to go out for dinner, w the reviews is like the primary of what we're looking at. It's which which b what which restaurants have the most and the highest reviews. Um because of then we're going in with you know some level of already pre-built trust. And um so I know I can completely understand how important that piece can be. Um and then you're talking about the you know the the kitchen equipment breaking down and the costs, you know, those kind of things coming popping up. And so like we have uh we have clients in the F and B space, and we also have a client that owns a company that repairs restaurant kitchen uh equipment. And seeing and it that that business is in Tampa where uh my wife and I uh previously lived in the St. Pete Clear Clearwater area, which is one of his core service areas, and so it was you know, it's it was interesting uh seeing you know, seeing some of his customers being some of these beachside restaurants that you know were mom and pop owned, um that were some of our favorites, and um really seeing the kind of the impact of you know uh the cost that they were outlaying and how frequently they were visited uh to get things repaired, and it was like, well, I didn't never expected um that the you know equipment would need to be repaired and uh maintenance performed on them like this frequent and how much that costs and with you know and then obviously having the perspective uh of uh having clients and seeing clients uh that own and operate restaurants uh and seeing how thin margins can get and seeing both sides uh as a consumers you know as well is is um put that you know put a little bit of that into perspective and um uh and especially you know when you think about some of you know when I think about some of my favorite spots, uh uh the restaurant that we frequent uh local to us.

SPEAKER_01 32:13

Uh like with the front and bread.

SPEAKER_00 32:17

Yeah, and it's like I would uh you know if I was asked there for a review, I would I would probably leave a review on you know all of my Gmail accounts that I had because I don't uh if but then it's and I'm I may be even inclined to do that without being asked if I knew you know if I knew how important that was and that that could be the difference between being able to go there with my wife for the next ten years or uh the you know, business one of these businesses closing down. Um because I feel like uh it's it's you know, as as a as a guest of restaurants, I I don't think that's really something that anyone who's going in to dine somewhere uh or going into a bar to you know have a drink at really thinks about. And yeah, they're just in the moment of whatever they're doing in that moment. And you know, especially when you have your frequent flyers, like uh I feel like those people would be you know, if their their favorite spots closed down, and then realizing, you know, maybe people are hearing this and b are kicking themselves that that they could have actually had an impact if that transparency was there and that they were aware of uh the reality of of this, you know, the space that you guys operate in.