Restaurants Fought for Covid Survival, With Some Tech Helpers

The past year has destroyed independent restaurants across the country and brought a reality to their doors: many were not prepared for a digital world.

Unlike other small retailers, restaurateurs could keep the technology down, with simple websites and perhaps Instagram accounts with enticing, well-lit photos of their groceries.

For the past decade, Krystle Mobayeni had tried to convince them that they needed more. Ms. Mobayeni, a first-generation Iranian-American citizen, founded her company BentoBox in 2013 as a part-time job. She wanted to use her graphic design skills to help restaurants build more robust websites with e-commerce capabilities. But it was hard to sell. For many, she said, their services are “nice to have” and not a necessity.

By 2020. The pandemic sent chefs and owners to BentoBox as they suddenly had to add orders, delivery schedules, gift card sales, and more to their websites. Before the pandemic, the New York City-based company had around 4,800 customers, including the high-profile Gramercy Tavern restaurant in Manhattan. Today the company has more than 7,000 restaurants on board and recently received a $ 28.8 million investment led by Goldman Sachs.

“I think our company was built for this moment,” said Ms. Mobayeni.

The moment opened an opportunity for companies like BentoBox determined to make restaurants survive. Dozens of companies either started or grew rapidly when they felt their services were in dire need. In the meantime, investors and venture capitalists have done business in the “restaurant technology” sector – especially for companies that take advantage of the big chains for independent restaurants.

“Much of what happens is reminiscent of what we’ve seen in the broader retail sector over the past decade,” said RJ Hottovy, restaurant analyst for Aaron Allen & Associates. “Covid has accelerated the transformation quite a bit. This is a once in a lifetime opportunity to redefine the experience. “

Part of what Ms. Mobayeni Restaurants offers is a one-stop shop and the ability to own their customer information. Many restaurants rely on third-party providers like DoorDash or UberEats for delivery. However, these companies charge significant fees and store customer data because the transactions are processed through their websites. It’s not that big a deal when delivery is 20 percent of a restaurant’s income, but it’s a staple when delivery is 100 percent of its income – and you can’t contact any of your customers.

“Restaurants are realizing they need to see themselves as bigger companies and brands,” said Camilla Marcus, co-founder of TechTable, which connects the hospitality and technology industries. “You have to expand into other things: e-commerce, delivery, products. You have to think outside of the four walls. “

Sam Bernstein saw an opportunity to help restaurants deepen relationships with customers. Before the pandemic, he ran a tech start-up that connected students with housing, much like Airbnb. When universities sent students home last spring, his income dropped to zero.

He went to his board of directors and offered to return the remaining investments and close. Instead, the board suggested joining forces with a smaller team and a new vision.

“It was an existential crisis as you can imagine,” he said.

Mr. Bernstein fired all but 10 employees and took them for a brainstorming retreat. They looked at dozen of business models and looked for the right problem to solve. The more they discussed options, the more the members of the team realized that they were all interested in food and hospitality and wanted to help restaurants.

They came up with the idea of ​​a website where customers can “subscribe” to their favorite restaurants. The new company, Table22, would help chefs develop and market subscriptions to monthly meal sets and wine clubs, and then manage sales, recurring billing, planning, data analysis, and more. In turn, Table 22 takes a percentage of each transaction.

Table22, based in New York, opened its first restaurant in May. Since then, it has grown to more than 150 restaurants in 50 cities. Late last year, the company raised around $ 7 million from investors including David Barber, owner of Blue Hill Farm and restaurants.

Shelby Allison signed up her Chicago bar Lost Lake for service via email from Table22. She hesitated at first and wanted to listen long enough to learn how to create a cocktail subscription service on her own.

“We get many, many calls from these tech companies trying to help or track down troubled companies,” she said.

In business today

Updated

April 20, 2021 at 1:25 p.m. ET

However, she was impressed with the low service fee and the fact that Table22 was sharing customer data. She started the service in October and was hoping for 30 registrations. 100 people have joined. Ms. Allison now has 300 subscribers and five employees working on the make-at-home cocktail boxes.

“This will stay 100 percent in the future,” she said. “I love this program. I thought it could cannibalize my to-go business, but it didn’t at all. “

Ping Ho considered joining Table22 to host the wine and meat clubs she offers at her Detroit, Marrow restaurant and butcher shop and Royce Wine Bar. However, she decided against it because her existing subscription platform, Zoho, gave her the essential tools.

“It’s a bit more work, but there is more agency,” she said.

However, since her website was mostly informative, she found she needed help offering online ordering and a delivery system for the butcher shop. So Ms. Ho reached out to Mercato, which enables e-commerce for independent grocers. At one random point in time, she had signed up a month before the pandemic. When orders were placed for the stay at home, she was able to quickly start offering foods such as milk and eggs in addition to meat.

Her sales rose “tremendously,” she said, although they have flattened in the past few months. However, Ms. Ho intends to continue the service.

Mercato started in 2015, but 2020 was its year. As of February 2020, the service had 400 stores in 20 states; It quickly grew to more than 1,000 stores in 45 states. It continues to grow and has added some notable customers including the Ferry Building Marketplace on the Embarcadero in San Francisco with dozens of merchants.

“We seek to give independent grocers a sustainable competitive advantage,” said Bobby Brannigan, founder and director of the San Diego-based company.

It’s a mission he’s trained all his life. Mr. Brannigan’s family owns a grocery store in the Dyker Heights area of ​​Brooklyn, where he started working, storing shelves and delivering groceries at age 8.

“It’s ironic that I’m going back to what I did when I was a kid in Brooklyn,” he said.

In March and April, Mercato launched hundreds of new grocers every week – customers who weren’t used to ordering online or who weren’t used to the sudden volume of orders. Some stores that were used to 10 orders a day were flooded with hundreds, Brannigan said. Fortunately, his father had him built tools into the system that grocers could use to limit and plan the pace of orders.

Mr. Brannigan also adds more data analysis to help his customers better understand what their customers want. You can now see what has been purchased and what customers have been looking for.

“They’re collecting a precious treasure trove of data that they can use to sell the products they want today and tomorrow,” he said.

Of course, not all solutions are technically oriented. Sometimes it’s just a grassroots community of chefs helping chefs. Alison Cayne, for example, has given free advice to chefs looking to make packaged goods, like her line of Haven’s Kitchen sauces. These additional sources of income were critical when she closed her Manhattan restaurant and cooking school last spring, and she wants others to have the same options.

“That’s all very much from my point of view, not the overcapitalized, venture-backed, cool kid business,” she said. “I just want to help them build a brick and mortar store, develop a product, and build a brand that makes sense and is sustainable.”

In Detroit, grocer Raphael Wright and chefs Ederique Goudia and Jermond Booze devised what Mr. Wright called “a diabolical plan” to offer a weekly meal set cooked by black chefs during Black History Month.

“Black food companies hurt in town, so we figured what if we designed this food box to celebrate black food and black contributions to American cuisine?” Mr. Wright said.

They called the project Taste the Diaspora Detroit and brought together black chefs and farmers to create the weekly dishes – like Gumbo Z’herbes and Black Eyed Pea Masala. The three organized all of the e-commerce and planning, which allowed the chefs to participate even if they weren’t tech-savvy, and created the packaging and side dishes that told the story of the meal. They topped it off with a paired Spotify playlist.

“Being part of this project woke everyone up and made them think they had a little bit of hope that they could get their way,” Wright said.

They hope to resume service for Juneteenth and are currently speaking with funders to support the effort.

Comments are closed.