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Wolfgang Puck, the celebrity chef, has been facing many of the same challenges that restaurateurs all over the world are dealing with: How do you preserve and even grow your business during a lockdown? And how do you begin to reopen safely?
In a conversation on May 11 with Boris Groysberg, a professor of business administration at Harvard Business School, Puck shared how he is steering his businesses — Wolfgang Puck Fine Dining Group, Wolfgang Puck Catering, and Wolfgang Puck Worldwide, Inc. — through the Covid-19 crisis. (Note: The conversation has been edited.)
In what ways have you chosen to pivot to new opportunities? What role does experimentation play in that process?
When we shut down the restaurants, we decided to do takeout. At the beginning, we didn’t really know how to do it that well. After three weeks I said, “We are not growing our business.” My question is always: How are we going to grow the business we are in?
My idea was to think about takeout more broadly. I said, “Let’s give people an experience.” For example, at my restaurant Chinois on Main in Santa Monica, I said let’s not focus on selling customers one lobster for $65.00. Instead, let’s bring them the adventure of having a meal with us. For $39, they get a Chinese chicken soup with wontons in it, pot stickers with spicy sauce, vegetable spring rolls with dipping sauce, the Chinois chicken salad, the choice of half a lobster or a portion of short ribs with candied ginger sweet potato puree, and finally cookies. Obviously, we didn’t make real money with that. But we started to attract a lot of customers. That, for me, is the most important thing. I love to see a business grow, and we have to figure out how we’re going to grow in every restaurant.
We also tried something new at Spago in Beverly Hills. We started with discounts to move the food we already had and then increased the prices to where they’d been. That’s also when we started to sell wine and cocktails. People really seemed to like that. You can get a Negroni all made up; all you have to do is pour it over ice and put an orange peel in it. Then we noticed that on Wednesday and Thursday our pickup business was a little slower. So, we started to make fried chicken. Who would have known that that would become the best seller by far?
Some ideas didn’t work out so well. We tried burgers on Thursdays, but there wasn’t as much demand for them. So, we tried, and if you don’t try, you don’t know. Now I’m going to do barbecue. And if barbecue isn’t successful, we’ll make fried fish or something else. We’ll see.
We try to adapt and do things in order to get another customer to buy our product. We are trying to use the Covid-19 crisis as an opportunity. Maybe one day we’ll build a ghost kitchen where we’ll just do takeout. We could actually develop a whole new business with that.
How have you managed your team through this crisis? What role does your management team play in keeping your businesses successful?
The crisis really forced me to decentralize my business more than I ever had. I love working with people who I don’t have to push, who are self-sufficient. I don’t want to have bureaucratic structures in place. Every chef and every manager at my restaurants is responsible for their business. They don’t have to call up a manager if they go to the market and find a fresh ingredient or they find the best meat and ask, “Okay, can we make a change and put that on the menu?” I say, “You just do it. I trust you.” That really gives them a lot of confidence, and they feel liberated and happy because of it.
Have you pivoted in other ways beyond your restaurants to find additional sources of revenue?
I’m giving home shopping a try and it’s going well. We’ve sold over 11,000 of our air fryers and $360,000 worth of steaks. I do that once every two months. I could do it more often, but we don’t have the inventory. It takes some time to set it up because we basically transform our catering kitchen into a studio. I have my catering chefs and everybody working with me. That’s what made it possible to recently do $2.5 million worth of business on a weekend.
We had another amazing opportunity a couple weeks ago — a virtual cooking class. It cost $175.00, and we had 150 people sign up. Again, it sounds expensive, but you get two cocktails, a bottle of Chianti, as well as three courses, and a dessert packed up in a bag. Some components were already assembled by us, and other components were up to the people at home. I showed them on video what to do. People gave feedback like, “Oh, my God. I didn’t know I could make a risotto!” It was an experience for them.
As a vocal advocate for the restaurant industry, what steps do you think should be taken to help restaurants survive through this crisis?
Because of the pandemic, we had to shut down our restaurants. It was very difficult to know what to do. Two months ago, a couple colleagues and I talked to President Trump on the phone. I told him about the insurance companies who don’t want to pay for business interruption insurance. We are trying to get the government to help.
I also told the President that we need a stimulus for the restaurant industry. Let people deduct their business meals just like they used to do. I reiterated that this idea wasn’t just about me. For example, I have 150 employees at Spago. Where do they get their food from? From the farmers. Where do they get their fish from? From the fisherman. How do we get all this food? Somebody has to deliver it. It’s a trickle-down effect. It’s really important because the restaurant business directly and indirectly employees so many people. This kind of stimulus would be an important way to help the restaurant and catering industries get back on their feet.
How do you envision the re-opening process at your restaurants? What will be the challenges?
In the short run, there will be big changes for customers. Obviously, we’re going to have waiters wearing facemasks. We’re going to have a doorman, so customers don’t have to touch a handle. I think we’re still going to have somebody park cars, but customers may want to park their own cars. We’ll find out. Hopefully, by the wintertime we’ll have a vaccine, and then people will feel more comfortable. Our primary concern is how we’re going to make our employees and customers safe.
Another concern as we reopen is how we determine how many people and which people are going to get their jobs back right away. It’s really a tough decision to make. It comes back to how are we going to make our employees and the customers feel safe, so that we actually have a viable business. I cannot hire 100 percent of the employees and do 50 percent of the business, because then the company will go bankrupt in no time. We will have a lot of people still unemployed, or on furlough. For me, the most difficult part is deciding who is going to be working and who is not going to be working. A lot of our people are going to have to wait until business comes all the way back, if it comes all the way back. How many months are they going to be on unemployment? It’s really a very difficult thing.
Once we get a vaccine and people feel comfortable, I think we’re finally going to get back to the new normal. Now, are we going to get physically close to one another again? We’ll adapt to the changing attitudes and behaviors of our customers because we have to make them feel comfortable. We have to make them feel safe so that they trust us and come back to the restaurant. In the short term, we’ll do the best we can to keep employees and customers safe. Our challenge in the long term is: how can we make our business as close as possible to what it used to be?
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By Boris Groysberg | Read More