Blue Plate Blues

Given rising costs, gloomy economic news, and a cautious dining public, local restaurateurs are getting concerned ... and creative



Take a seat at the dining bar at One Restaurant & Lounge in the Riverbend, with its cooking-show view into the open kitchen, and you can watch chef Scott Snodgrass and his lieutenants individually count the number of green beans they plate alongside the grilled tenderloin. Such discipline in portion control is one of the factors that have helped make the 4-year-old restaurant successful.

But a sharp eye on food costs isn't enough in this economy, where local restaurants are struggling and their customers, bombarded with news of economic peril, seem increasingly wary about plunking down serious money to eat out.

"I'm definitely nervous about what's going on," says Lee McCollough, who owns and runs One along with Snodgrass. "Scotty and I are very hands-on as owners, him in the kitchen, me in the front of the house, so that helps. We've cut hours for some of the staff. I've picked up two shifts behind the bar. But it's hard to find other places to cut back at this point."

Things are rough all over in the local restaurant scene. Ongoing local issues combined with the newly revealed extent of the nation's economic woes are creating a crisis for some New Orleans restaurateurs, especially in the city's robust fine-dining sector.

Last year, chef Miles Prescott took over the restaurant at the Country Club, the Bywater swimming club, lounge and restaurant more famous for its backyard pool than its kitchen, and raised the menu from sandwiches and bar snacks to the most inventive and ambitious food in its ZIP code — an artisanal cheese list, housemade charcuterie and dishes like cassoulet and saffron risotto.

But all that came to a halt at the end of October when the Country Club's owner pulled the plug, according to Prescott, and decided to revert to the kitchen's previous stock-in-trade of diner fare.

"It's been a rough couple of months," says Prescott, who left the Country Club with the format change. He is looking for a new job in New Orleans.

Restaurant operators say their insurance and payroll costs have greatly increased since Hurricane Katrina, as is the case for most other local industries. The number of visitors to New Orleans is down; especially hard-hit are restaurants that rely on substantial tourist and convention business. Fuel prices that reached record highs over the summer continue to keep both food expenses and restaurant utilities higher than ever. Most restaurant suppliers began assessing fuel surcharges to cover their delivery trucks' diesel costs when gasoline prices skyrocketed.

Another blow was the mandatory evacuation before Hurricane Gustav and the prolonged power failure that followed in early September. It cost most restaurants a week or more of business, and, after their own costly evacuations, many locals dined out less frequently to bring their household budgets back into trim.

The most recent shock has been the meltdown on Wall Street and the prospect of a prolonged recession. People fearing for their investments, their prospects and even their jobs are less likely to treat themselves to a meal out on the town.

"September was our worst month in 22 years. Scary bad," says chef Frank Brigtsen, who has run Brigtsen's Restaurant with his wife Marna since 1986. "We're borrowing money to pay bills, and that's something I've never had to do before in my life," he says.

"It's really hitting our business people," says Greg Picolo, chef and co-owner of the Bistro at Maison de Ville in the French Quarter. "Customers who I would see several times a week at lunch are now brown-bagging it."

Money worries across the country seem to have quashed the dining public's appetite. An October study by the New York-based consulting firm Booz & Co. found that 43 percent of consumers are dining out less often than they did six months ago and a similar percentage are choosing cheaper restaurants when they do eat out. The survey also found people would cut back more on dining if the economy fails to improve.

But New Orleans differs from the norm in many aspects of American life, including the way people approach and value food. That's why restaurateurs all over town are dreaming of patrons like Kyle Waters. Waters, a retired bank executive, believes dining out is an essential part of his New Orleans lifestyle, so even as the nation's economic picture continues to worsen, Waters and his wife Cookie remain committed to dining out.

"We're not cutting back, and we're probably not going to cut back," he says. "We still go out around three nights a week. We read the write-ups, we keep a list of places we want to try. Dining out is part of what we do."

That is exactly the attitude many chefs hope will help the local industry through hard times, much as it did after Katrina. And when they talk about why they stay in the business despite worrisome financial indicators, the loyalties and personal relationships built with customers like Waters as well as the strong cultural role of restaurants in New Orleans come to the fore.

But most are not banking on goodwill and tradition alone. To deal with higher costs of doing business and to keep customers coming in, chefs and restaurant managers are making changes to their menus, their schedules and their behind-the-scenes systems, which run the gamut from staff uniforms to the fees they pay to accept credit and debit cards.

"They're looking at their soft costs a lot more," says Wendy Waren, spokeswoman for the Louisiana Restaurant Association (LRA). "It's an industry of pennies. Everything that goes on every table has a cost, and that's one place where they're looking now for savings. So if you're selling po-boys, don't put out free crackers."

But the heightened attention to costs shows up in the food brought to those tables as well. Purveyors say they can read the impact of economic anxieties in the types of orders chefs are placing.

"Even the highest-end restaurants are thinking different and bringing down their per-plate costs, but doing it in a way where they still get people coming in," says John Bellini III, chief operating officer of Bell Foods, a Harahan-based restaurant purveyor. Increasingly, he says, chefs are ordering less expensive steaks, like filet of sirloin instead of filet mignon, saving as much as $6 per pound in the process. And they're ordering smaller steaks.

"Instead of a 9-ounce filet, now they want 6 ounces and they'll add more sides," Bellini says.

Also, expect to see a rise in relatively inexpensive but out-of-the-ordinary cuts of meat on menus. Exhibit A for Bellini: beef short ribs.

"People don't have an association in their heads of what it should cost, like they do with other cuts that they shop for themselves at the supermarket," he says. "So they see this entrée for $12 or $14 and it looks good, but they don't know that the restaurant makes more money on it."

"[Restaurateurs] look at the reservations each night and then order based on that number for that night," says Lenny Minutillo, sales director for the Louisiana Seafood Exchange, a Jefferson-based seafood purveyor. "They're buying frugally, which means they're buying the same way their customers are spending."

Knowing that customers are more sensitive than ever about the bottom line, restaurateurs say they are doing whatever they can to avoid price hikes. "You don't want your customers looking at you like, "Why are you raising prices at a time like this?'" says McCollough at One Restaurant.

Glen Hogh, chef and owner of Vega Tapas Café in Old Metairie, approached the problem by trying to wring more value from dishes already on his menu. Trimmings from $22-per-pound tuna steaks, previously waste, now get a soak in citrus and olive oil and join the menu as ceviche. In some cases, he's been able to reduce both the price of items and their size, cutting his own costs while making the dish potentially more attractive to budget-conscious diners. His popular pork tenderloin tapa has fallen from $8 to $7 while also losing one of its four slices. A lower price per plate, Hogh says, encourages customers to order more tapas.

"You get a local following based on value," he says. "That's what people remember and respond to."

Hogh is confident in the long-term economic health of the area, and in October he reopened Café Sbisa, the historic French Quarter restaurant that had been shuttered since Katrina. In a reflection of the current climate, most entrées on Sbisa's menu are under $20.

Economic worries have not affected all types of local restaurants equally. Some operators of casual, lower-priced restaurants say that while their own costs have increased, business has picked up.

"I think what we're seeing is people who might have dropped $25 for an entrée (are) coming here now and dropping $7 or $9," says Craig Gieseke, owner of J'Anita's, a casual restaurant that opened last year in the Lower Garden District.

Wine sales at dinner have shot up, he's noticed, perhaps indicating that patrons are at least clinging to that one totem of fine dining even if the meal is a basket of brisket rather than a strip steak. Customers also are coming with the kids more often. "Instead of mom and dad heading out and hiring a sitter, they pick a place where the kids can come along and they're still saving money on the dinner," Gieseke says.

Warren Chapoton, co-owner of Slice Pizzeria and the two Juan's Flying Burrito locations, says restaurants like his may actually benefit from higher food prices, since they apply to grocery stores as well and consumers shopping for themselves would be hardpressed to make a pizza or burrito at home for less than he can sell them.

"Another factor is that in tough economic times many people have to work more, so they're forced to eat out because of the time crunch," Chapoton says. "They pick places at a price point they can swallow, literally."

Hard times, however, are beginning to register even at inexpensive eateries. Karim Taha, co-owner of the local Mona's Café chain of Middle Eastern restaurants, says business has slowed down at three of his four locations since the financial crisis. Mona's restaurants do not serve alcohol, a major revenue source for most restaurants that do. But Taha says more customers are bringing their own wine, which perhaps suggests, as at J'Anita's, that patrons accustomed to seeing a wine list at dinner are shifting to less expensive local options for dining out.

In Kenner, David Montes, the operator of Taquer’a Chilangos, says he had to raise the entrée prices on his menu of traditional Mexican fare by $1 to offset his own higher costs. Montes opened the casual taquer’a last year after running a taco truck in Jefferson Parish. His prices are still inexpensive, with most dishes under $10, but he says customers instantly noticed the increase.

"They're more sensitive to the price, even that small change," Montes says. "But they seem to understand. They know the prices are up for us, too."

Gary Darling, a partner in the New Orleans-based Taste Buds restaurant group that operates the midrange Zea Rotisserie & Grill and Semolina chains, says business seems to rise and fall on the extent of bad financial news people see week to week.

"We're still trying to figure out what's going on," he says. "We're trying to maintain with the prices we have and hope for a turnaround, but if it extends for much longer, of course, we'll have to adjust for our higher costs."

One reason his restaurants are holding back on modifying the menu is simply the prohibitive cost of printing new menus and instituting related changes across the chain, he says. In addition to 13 Zea restaurants in five states, Darling and partners Greg Reggio and Hans Limburg run two Semolina pasta restaurants and two slightly up-market spin-offs from the Semolina brand, called Semolina's Italian Bistro.

While the Taste Buds' dining rooms have seen ups and downs lately, the economy has had an unambiguously negative impact on expansion. The company has frozen its plans to open more Semolina Italian Bistro locations, preferring for now to focus on the proven Zea concept rather than take the risk of building a new brand. A planned Zea location in Austin, Texas, had to be postponed indefinitely after investors backed out, Darling says.

"We'll have to generate a different group of investors, which I think we can do," he says. "Believe it or not, there are people out there who figure restaurants are a safer investment these days than Wall Street."

Other New Orleans restaurateurs now are making changes they hope will leave them in better shape for the long run.

Steve Pettus is managing partner of Dickie Brennan and Co., whose Palace Café, Dickie Brennan's Steakhouse and Bourbon House restaurants are all within two blocks of each other on the edge of the French Quarter. Pettus used that proximity to work out a deal with most suppliers to avoid fuel surcharges by coordinating the orders from his restaurants, along with the nearby Mr. B's Bistro, to arrive in one truck at one time. He's now working with other nearby restaurants to add them to his de facto ordering co-op.

Dickie Brennan & Co. is also pursuing a strategic approach to staff scheduling — a huge daily expense with the company's 350 employees but a perennial moving target at a restaurant like Bourbon House, where most customers walk in without reservations. Pettus says the company is working on an Internet or text message-based tool to help make scheduling more flexible and responsive to actual day-to-day needs.

A restaurant labor shortage has been a chronic problem since Katrina. But Waren of the LRA says those unfilled positions have become advantageous for some restaurateurs; slim staffs have meant smaller payrolls, with owners and their families working more shifts themselves.

But the fact that so many New Orleans restaurants are local, independent and family-owned may be their greatest source of strength and resilience.

"This is our lives," Brigtsen says. "If we were part of a national chain, I think a lot of us would look at the numbers and get out. But we have a lot more intangibles going on here.

"This is not a food business, it's a people business. The people who eat with us, the people who cook and the people who supply us. There is a sense that we're in this together, a sense of community here. It's the heart of our city, and it may change. But it's not going to go away."

Chef/owner Frank Brigtsen says he is borrowing money to cover costs at Brigtsen's restaurant for the first time in his career. - CHERYL GERBER
  • Cheryl Gerber
  • Chef/owner Frank Brigtsen says he is borrowing money to cover costs at Brigtsen's restaurant for the first time in his career.
Chef Greg Picolo sits in an empty dining room the Bistro at Maison de Ville in the French Quarter one day last week during what usually is the lunch rush. - CHERYL GERBER
  • Cheryl Gerber
  • Chef Greg Picolo sits in an empty dining room the Bistro at Maison de Ville in the French Quarter one day last week during what usually is the lunch rush.
John Bellini III (right) of restaurant supplier Bell Foods in Harahan says restaurateurs are trying to survive the econoic downturn by being creative and cutting back on their per-plate costs. - CHERYL GERBER
  • Cheryl Gerber
  • John Bellini III (right) of restaurant supplier Bell Foods in Harahan says restaurateurs are trying to survive the econoic downturn by being creative and cutting back on their per-plate costs.
Craig Gieseke says business at his casual dining restaurant J'Anita's has picked up as customers seek affordable alternatives to higher-priced eateries. One thing he's noticed that people haven't given up to save money is wine with dinner. - CHERYL GERBER
  • Cheryl Gerber
  • Craig Gieseke says business at his casual dining restaurant J'Anita's has picked up as customers seek affordable alternatives to higher-priced eateries. One thing he's noticed that people haven't given up to save money is wine with dinner.

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