Special Sauce: Kenji on Coronavirus and Its Impact on Restaurants

Editor’s note: The Coronavirus story is unfolding at a breakneck pace. That means that something said that was true at the time may no longer be so. On this episode please note that Lola, the Tom Douglas restaurant in the Hotel Andra in Seattle, is now closed, as is the hotel itself.

Before the sh*t hit the proverbial fan, I had the next several episodes of Special Sauce all queued up. They were going to feature Susan Spungen, the founding food editor of Martha Stewart Living and author of Open Kitchen: Inspired Food for Casual Gatherings; and Alexander Smalls, an opera singer turned chef-restaurateur and cookbook author (Meals, Music, and Muses: Recipes From My African American Kitchen). But when the coronavirus pandemic struck with full force, destabilizing and eliminating hundreds of thousands of jobs in our industry, I realized that we needed to put those episodes on hold and change up the Special Sauce MO. So over the coming weeks, the podcast will be focused on the virus’ effect on people in the industry who sustain and feed all of us, like chefs, restaurateurs, farmers, bread bakers, servers, and so many more.

For our first episode in this vein, I knew I wanted to speak to our very own Kenji Lopez-Alt. Kenji, along with his partners, opened Wursthall in his adopted hometown of San Mateo, CA in March of 2018; like the rest of California’s restaurants, they were forced to close their doors to all business but takeout and delivery earlier this month. He’s spent virtually all his time since trying to aid his laid off workers and keep the restaurant going in order to rehire as many of his people as he can. Miraculously, Kenji did find the time to pen a ridiculously comprehensive and clear-headed guide to food safety and the coronavirus for us.

On this episode of Special Sauce, Kenji shares the problems he, his restaurant, and his staff are facing, and the tactics he’s employing to keep the lights on and the burners fired up. Just as importantly, Kenji also talks about the macro socio-political and cultural issues the coronavirus pandemic has merely brought to the surface for businesses like his.

I hope that those of you who can are able to support Wursthall and its employees past, present, and future. Kenji has opened a Patreon account, and 100% of donations will soon go directly toward producing and providing meal kits for local San Mateo families affected by the COVID-19 outbreak.

In addition to their own local initiatives, the Wursthall crew has been working with organizations, including Jose Andres’ World Central Kitchen, to deliver meals to various organizations in need, including Samaritan House San Mateo, the Oakland Fire Training Center, and San Francisco General Hospital emergency room. Folks will also be able to directly buy meals for families, individuals, and front line workers who are affected by the pandemic. Go to the Wursthall website for the latest details about this program.

One more note about this ever-changing crisis: Even if the proposed multi-trillion dollar federal legislation is passed in the next day or two, all of these efforts are desperately needed in the short, medium, and long-term.


Ed Levine: Hello, Serious Eaters. Welcome to the first in a series of Special Sauce episodes where we will grapple with the coronavirus pandemic. It’s having a profound effect on everyone in the food world, but especially the millions of restaurant workers who have already lost their jobs. Normally, we turn to my friend, Kenji Lopez-Alt, author of The Food Lab, for inspiring recipes and the science behind them. Today we get a different kind of inspiration from Kenji. We’re going to find out how he’s adapting to the coronavirus crisis. His restaurant in San Mateo, California, Wursthall, had to be shuttered for the duration, but Kenji’s finding ways to hold onto as many staff as possible, is personally delivering meals to those in need, plus he has dreams about economic justice for underpaid dishwashers and other restaurant workers. First of all, tell us about how this whole saga has unfolded in your neck of the woods, in San Mateo.

Kenji Lopez-Alt: Well, Santa Clara County, which is right next to us, was one of the first places where the… I think maybe the first place where the virus hit the US. At least the first confirmed places. That was a few weeks ago. I actually had the flu right around then, and so I got a little bit scared. This is before people started hoarding toilet paper and canned goods. I actually got a little bit scared and went and got myself tested. There were no coronavirus kits available then, but I got tested for flu and I was positive for flu. We are pretty sure that it wasn’t coronavirus. But either way, right after that happened, I started getting a little bit nervous. I actually went to the supermarket and I bought a few weeks worth of canned goods, and eggs, and stuff like that, just thinking maybe I won’t be able to get out of the house if I do get sick or if lots of people start getting sick.

Then just a few days later was when I think people really started freaking out and acting, I don’t know, like it was a zombie apocalypse, acting irrationally, really. Because nobody needs months and months of supplies. Really, all you’re doing is creating sort of artificial shortages of things that… From everything I hear, supply chains aren’t really going to be affected by this. At least, minimally affected. You’re still going to be able to buy groceries next week or next month.

But anyhow, as of a few days ago, the whole area, the entire Bay area, is on lockdown. All businesses are closed other than what they deem necessary services. That includes pharmacies and supermarkets.

EL: Right. Wursthall, before everything had to close, did you see business just go south at a pretty rapid rate?

KLA: Actually, no. We were doing fine up until maybe a week ago. That was basically when we started hearing the social distancing advice. At the time, there were no rules about whether restaurants could be open or not yet. But we sort of instituted our own in-house rules about how we were seating people. We’ve removed a bunch of tables. We made sure that every party was seated four to six feet apart. At the time, I think we had heard that three feet was the distance, although now it’s up to six feet, what they’re recommending. We were seating parties basically staggering them. We kind of put an artificial cap on the number of people we could serve, but that only lasted about a day or two until the full shutdown went into effect.

Now we’re open as a takeout business only, which is doing okay. We have sort of a skeleton crew of people working because we don’t want people in close proximity to each other. We’re doing contact-free pickups. The door is opened with a pneumatic. There’s a button that opens it. We let in one person at a time to pick up their order, which they place online. We put it on a table, they come and pick it up, walk out. There’s really no contact at all, which I think is really the safest way to do it.

Aside from that starting, well I don’t know when this podcast episode is going to go out, but right now it’s Thursday the 18th, and starting tonight I’m going to be going to the restaurant to put together meal kits that people will want to have ready to cook meals that they’ll place orders for and then either come and pick them up or I’m going to also be driving around and dropping them off, delivering them to people’s doors. With whatever profit we make from those meal kits, we’re going to be making additional meal kits that we’re going to be offering for free, because there’s a lot of people who are out of work. Unemployment benefits, they’ve loosened the restrictions on those, so you can basically get them immediately after you’ve been laid off, because a lot of people are getting laid off right now, just because businesses can’t stay open. But even so, unemployment is not enough.

EL: Sure.

KLA: Especially in the Bay area. There’s going to be a lot of people struggling. Especially because the schools are closed. There are people who are going to have difficulty working. Plus, they’re going to have to be feeding their kids lunch, which used to be taken care of by the schools. We’re hoping to do our part in helping the community by putting together these meal kits that we’ll then be giving away for free to families that are struggling.

EL: Sure. How many people did you employ, and what’s happened to all of them? Did you have to lay most of them off right away?

KLA: The day that the rules came out that we weren’t allowed to serve in-house, we basically shut down the whole restaurant for two days to try and figure out what we’re going to do. Yeah. We employed about 45 people. I don’t know the exact number, but it’s around 45 people, including front of the house and back of the house staff. Basically, everybody’s been temporarily laid off. We’ve assisted them with getting onto unemployment. What we’re trying to do now is figure out a way that we can employ back as many of them as soon as we can. It’s literally physically impossible to employ all of them right now because of the proximity issue. We can’t have people working closer than six feet to each other. We can’t really run our kitchens the way we used to.

More importantly, there’s not demand. The business just isn’t there. We’re open for takeout. We used to serve a couple hundred people on any given day. Restaurants, as I’m sure you know, are not a high profit margin business. That was basically just enough to scrape by and pay all our employees and keep the place open. Without that business, there simply is no money to do that. We’re trying to figure out creative ways to hire back as many of them as we can, as quickly as we can. We are extending things like allowing sick leave to rollover through the layover. What we really want to do is get every person back hired as quickly as we can, but it’s not clear how and when that’s going to happen at this point.

EL: Yeah. I think that’s the hard thing is that nobody knows the timing. It sounds like your business is probably, what, 15 or 20% of what it was before the lockdown?

KLA: Less than that. Well, we’ve only been open a day and a half for takeout business, but based on yesterday’s numbers, we’re at less than 10% of what our normal day is.

EL: Right. So, you hope the meal kits will maybe add a few percentage points to that.

KLA: Well, the meal kits, we’re not taking any profit on. But we are hoping that they will become popular enough that we’ll be able to hire-

EL: Got it.

KLA: … back some of our staff to help. Right now, basically we’re doing it as a test run. I’m going to be doing it 100% by myself because I can donate my time. Right now, it’s kind of like a trial run. Hopefully, business on that will pick up to the point where we can start hiring back our regular employees because it’s heartbreaking.

EL: Yes.

KLA: You were a small business owner and you know what it’s like when your employee’s struggling. It’s like-

EL: Oh, God. It’s horrible.

KLA: It’s very easy to look out from the inside and say, “Well, just pay your staff. You’re going to keep paying them, right?” It’s like, well, I would love to. But literally, the money doesn’t exist to do that.

EL: I think people think, “Oh, it’s Kenji Lopez-Alt’s restaurant. There must be millions of dollars of venture capital money in back of it.” But you guys sort of bootstrapped it. Your partners are-

KLA: Friends and family, small investments. Yeah. They own a beer and wine bar, which has now been shut down probably permanently. Since we opened two years ago, I started working on the project three years ago, so far I’ve made $0 on it. I know personally-

EL: Okay, as your business manager, that’s a terrible precedent, Kenji. But yeah, it’s really-

KLA: That’s how those things go. It’s like-

EL: Yeah.

KLA: … small businesses are not… Like you said, we’re not taking our private helicopter flights to the Hamptons every weekend.

EL: Yeah. It’s weird. People don’t understand that even a restaurant like yours, which was very popular from virtually the moment it opened, it still means you’re living from the week to week receipts.

KLA: Oh, yeah. I mean, restaurants are very, very low margin. The folks at Mei Mei Kitchen in Boston, which is a great, great restaurant, they’ve recently published an article in Eater where they basically opened up all their books so that to show customers and staff what the economics of a restaurant look like. I think in their books last year, they had a revenue of like $1.2 million, and a profit of like $18,000 or something like that. Something absurd.

EL: Right. After paying themselves, and they’re not paying themselves $300,000 a year.

KLA: No. Yeah. For us, it’s like when we first opened, and this happens to a lot of restaurants, restaurants are really a game of sort of optimizing efficiency, ordering, optimizing your menu, it’s really just about pulling as much efficiency as you can out of your space. When we first opened, we were slammed. There was waits of like three hours to get in, whatever, 400 people a night. We were literally losing money on every single customer that came into the door just because the cost of operating is so high and margins are so slim.

By maybe six months in, we had fine-tuned operations enough where that wasn’t the case anymore and we could start pulling in a profit. But still, the profit margins are extraordinarily thin and there’s always unforeseen costs. It’s like we find out that our toilet, the pipes in the toilets were all rotted through. The previous owners hadn’t disclosed that. The middle of a Saturday night, they just stopped working, and that’s like a $30,000 fix.

EL: Wow.

KLA: Restaurants are not a business you go into if making money is your goal. You do it because you want to.

EL: Yeah. Because you want to feed people and you derive a lot of pleasure from feeding people.

KLA: Yeah. I mean, actually for me, it’s really the most pleasure I get from the restaurant is watching the team and knowing that we have this business that’s employing 45, 50 people. That’s great. As a restaurant owner or partner, and especially as a chef, when I started cooking, I don’t know how long it was, it was like 20 years ago, restaurant kitchens were not really fun places. They were extraordinarily toxic and macho. One of my goals as a chef was to make sure that our restaurant and our kitchen could operate, but that it was also a place that people wanted to work.

EL: Right. Yeah. It’s sort of the same thing as when I started Serious Eats. It was like, I want to make this unlike any other work environment I’ve ever been confronted by.

KLA: Yeah. And it was. I mean, having worked for you for however long, 10 years, well I guess five years full-time and then continuing to collaborate with you after that, it was definitely unlike any other publication I’ve ever worked for. As far as our kitchen goes, people like working for us, which is nice. Particularly among women, which historically women in kitchens don’t have a great time. Other than one person who had to leave because of visa reasons, in the two years that we’ve been open, we’ve had a 100% retention among back of the house women, and close to that with men as well.

EL: Wow, that’s amazing. Speaking of institutions, what would you like the institutional response to be right now locally, on a statewide basis, and the federal government? Because there are three things. There are the health issues that have to be solved. Then there are the issues of making sure that all your former employees and hopefully future employees can figure out a way to make ends meet. Then there’s what happens when you do reopen and how do you get enough business.

KLA: Yeah.

EL: I saw Tom Colicchio on a show and he articulated those three things. He was saying that he thought even if the federal government did step up with money for people, that still 75% of the restaurants were probably not going to come back. Now, I don’t know if that’s a dire prediction or he was just saying that for a fact, but clearly there are going to be some changes no matter how fast the federal government reacts. Right?

KLA: Yeah. Yeah. One would hope that in the long term, there’s going to be some positive changes. The only silver lining of all this might be that it really exposes how vulnerable the most vulnerable people in our society are, and I think really, really highlights the issues around public healthcare, minimum wage, things like that. It’s insane that a worker is incentivized to hide a contagious illness because there’s no public healthcare, because there’s no mandatory paid sick leave.

EL: Right.

KLA: Those are things that just should not… It should not even be a question to me. Especially at a time like this, a public health crisis, it’s like you’re actively making this thing spread more quickly and get people more sick by not having those safety nets in place.

EL: Yeah. It seems even in the last day or two, there’s been a sea change. It feels like there will be money flowing directly to all of your former employees. But it’s not clear that, by the way, if the government sends everybody $1,000, how—

KLA: Yeah. Yeah. Yeah. Especially in a place like the Bay area.

EL: Your hope is actually, it sounds like it goes beyond whether they send $2,000 three times or whatever, and that your hope is that this just highlights all the inequities that are built into the culture that have to be addressed.

KLA: Absolutely. What I would really like to see is for wages in California to reflect the cost of living because they don’t. Wages for hourly workers, even though I think California’s minimum wage is higher than the national minimum wage, but it’s still not enough compared to the cost of living out here. Meanwhile, there is the huge wealth disparity in the Bay area. There’s two different types of people who live here. on one end, there are the tech workers who get paid really, really well. Then there’s the hourly employees, the people who feed you and the people who work in service industries. Just the disparity in those two things is crazy. But then you try and charge more than $16 for a hamburger and people freak out.

EL: And people freak out on Twitter.

KLA: Yeah. Or on Yelp or wherever. I really do think it’s going to take something like, well, a drastic increase in the minimum wage, mandatory state sponsored healthcare and sick leave, maternity leave, all those things, basically to force every restaurant to raise their prices at the same time. Because unless that happens, the competition to survive as a restaurant or any small business is just too big to be able to say, “Well, I’m going to do the right thing and charge what a hamburger should cost to be able to pay my employees.” It’s like, well great, you can do that, but your business is going to immediately go under because nobody’s going to pay that unless they have to.

EL: Tom Douglas in Washington state, of course, as you know, he’s been forced to close 12 of his 13 restaurants. The only restaurant that’s open is the hotel restaurant.

KLA: Yeah. Is he trying to reformulate plans to-

EL: Yeah. He’s trying to reformulate Serious Pie.

KLA: As a takeout.

EL: I think he’s doing that. He kept the bakery open for takeout, obviously, which is right across the street from the Hotel Andra and the restaurant that’s there. That is open. Then he’s, because he’s Tom Douglas, he’s making meals in the front of his warehouse where he makes his spice rubs and packages them and he’s giving all that money to all his employees. We’re talking about 800 employees in his case.

KLA: Yeah.

EL: He’s sort of saying the same thing you are, which is that it’s not even a matter of giving people enough money in the short term so that they can survive, although that certainly has to be done. It’s really just ensuring that when you do reopen, that all the stars align and that it makes sense that the government working with private companies like yours will sort of join forces and figure out a way to have these businesses make sense as businesses. Because right now, clearly they don’t. It really is a threefold problem, as Tom says. It’s like, what’s going to happen to all these people, and how long do they have to go? Then what happens when the restaurants do reopen? You still won’t have probably solved the problems you’re talking about, right?

KLA: Certainly people will be more aware of the problems, but being aware is not the same as solving it. Either provide what people need through taxes and through government reform or through higher prices, having prices that actually reflect the cost of living in areas like this.

EL: It’s affordable housing. It’s a real living wage. It’s all those things.

KLA: Food costs that are reflective of the cost of living. The cost of services should be reflective of the cost of living. Certainly universal healthcare. Yeah. Anything that doesn’t incentivize workers to work when they’re sick and doesn’t bankrupt them if they do get sick. Maternity leave I think is important. Maternity and, well, family leave in general. Paid vacation.

EL: Are you hopeful these issues will be addressed, if not, in the very near term, sort of in the medium term so that it makes it easier to even break even or make a small profit in the restaurant business?

KLA: On the one hand, there are a lot of things that make me hopeful, which is that I think in the last four years, especially with the current political climate and the current administration, I think a lot of people have become more politically involved and have started thinking about these issues a lot more, especially a lot of young people. That’s hopeful. The part that scares me is what’s going to happen in November and what’s going to happen after that. Just the general divide in the country is just… In the world. It’s not just us—

EL: Yeah. Yeah. Yeah. For sure.

KLA: If something’s going to break at some point.

EL: Do you find that being an independent restaurateur, that it’s hard to compete with the bigger either VC-backed or private equity ,or fast casual places, or even the Sweet Greens of the world? Does that make it harder?

KLA: I don’t think so. Also, I consider us very lucky in that my partners were well established in the community and so people knew that, trusted them to run a good business. Of course, I have my online presence and that pulls in customers as well. In a lot of ways, it’s like we’re very lucky as a restaurant, as far as marketing and getting customers in the door goes. As a long term plan, at least for my partner Adam, the only viable way to continue working on the restaurant is to figure out how to open more locations. Whether that means shifting to something fast casual, or a little more casual, or we’ve been talking about going completely down market and doing things like planning of menu in restaurants that will go into stadiums and airports and things like that. Very different from what we do right now in our place. He’s a smart business guy and he’s young and has a very good sort of feel of the pulse of the area and the demographic that we’re aiming for, which is young families.

KLA: Yeah. I’ve never thought too much about the competition. My goal has always been run this place the way I would want a restaurant to be run, treat our staff and our guests with respect, and do things smart, efficiently, and hope that it works. Up until this current emergency, it seemed to have been going in the right direction. Certainly, I think from the employee side, with respect to running our business the way I want it to be run and running a place that I would want to work at, I’ve been quite proud of what we’ve done.

EL: Yeah. For sure. Well, we’re going to check in with you as the weeks go on, just to find out how Wursthall and you are doing, as part of the way we’re covering this on Special Sauce. Thank you for taking the time. We really appreciate it. Soldier on, my friend. Soldier on.

KLA: Thank you. Yeah. It was good to talk to you, Ed.

EL: All right, Kenji. Thanks a lot, man. We’ll talk soon.