Tipping Point (n): The critical point in a situation, process, or system beyond which a significant and often unstoppable effect or change takes place. (Source: Merriam-Webster Dictionary)
Who in this town hasn’t wondered when the pace of new restaurant openings will ever slow? If your inner counter tells you it’s a weekly event, it’s not even half right.
According to Food & Dining magazine, through Nov. 1, 117 restaurants have opened in Kentuckiana, while 67 have closed. Not only do those numbers not include openings of large chain restaurants, there are still two months left in the year. So it’s safe to assume the opening average is closer to three per week.
Sound crazy? It’s nothing new. According to Food & Dining’s most recent issue, its 50th since it was founded in 2003, around 1,500 restaurants have opened and roughly 1,000 have closed. (You should pick up a free copy of it to read Ron Mikulak’s 5,000-word retelling of those openings and closings. It’s a good trip down Memory Lane.) That means today’s rate of openings and closings is about the same as it was a dozen years ago.
The sheer number of openings has this upside: the mark of a healthy dining scene and an acknowledgement of Louisville being a favorable place to open such businesses.
The troubling issue is what customers don’t see, namely that the skilled labor pool required to run these new places is nearly dry. Alongside many menus posted in restaurant windows is, all too commonly, a Help Wanted sign. And if that plea isn’t in the window, it’s in an ad on Craigslist or a post on Facebook.
Despite debatably low unemployment numbers, what all agree on is there are plenty of people who aren’t working, but could and should. Yet even if those unemployed workers applied for a restaurant job today, they’d still need significant training to master the basics to become a competent line cook and make palatable food quickly. Culinary school output isn’t the answer either, as most programs take a minimum of 18 months to complete, and even then, many grads need more time mastering practical skills to perform at a professional level.
Even the venerable OLE Restaurant Group isn’t immune to the shortage. Principal and executive chef Fernando Martinez told me recently it’s always a struggle to find good people.
Yet, ironically, some of his peers blame ORG’s pace of openings (seven in three-and-a-half years, though they’ve closed two) is complicating the problem. One chef-owner said, “I love Fernando and what his company’s doing,” before adding, “but they’re scooping up all the good help. It’s already made things really tight for everybody, and they’ve got two more openings to come by next year.”
Truthfully, the comment doesn’t hold water. Of the 1,258 restaurants Food & Dining says are operating in Louisville, the addition of five in more than three years can’t claim all the good labor. Perhaps some of that was desirable, trained labor, but when you run the numbers, it’s not statistically significant.
But behind that chef’s comment is a widely shared and almost palpable anxiety over finding, training and keeping good employees — and that means everyone, whether they work in the front or back of the house, can manage the whole place or are entry-level dishwashers.
When I asked John Varanese about staffing River House Raw Bar when it opens next year, he grinned, shrugged his shoulders and said, “It’ll be tough. But everybody’s got to deal with it somehow.”
Last summer, Falls City Hospitality Group partner Brett Davis acknowledged his company will also be challenged to staff its two upcoming restaurants, JQ Public House and Doc’s Cantina. He knows some staffers will be current restaurant employees looking for new opportunities, but he wants both spots staffed primarily with people employed and trained first at FCHG’s Doc Crow’s restaurant.
ORG uses a similar strategy and cross-trains many of its employees to work at more than one of its five current restaurants. But such multi-unit training opportunities are rare in markets where single-unit independent restaurants are the norm.
While it’s clear that long-term employee training is essential to the future success of Louisville’s booming restaurant industry, what’s arguably more important is growing the customer base. No one I talk to — restaurateurs, successful business owners or restaurant gadflies — believes the number of people who dine out at unique, independent restaurants here is increasing. All believe the base of customers who like a dining adventure is largely fixed.
Statistically, that’s borne out in the Pareto Principle, aka “the 80-20 rule.” That means that of all the dollars spent in Louisville restaurants of every stripe, only 20 percent go to chef-driven concepts that really generate a buzz, places where the food and drink are truly unique. If you don’t believe me, just drive down Hurstbourne Lane or any other major thoroughfare on any night and look at the crowded parking lots outside chain restaurants. You won’t see that as frequently in independent spots, where 80 percent of a week’s sales come on Thursday, Friday and Saturday nights.
That’s not a reflection of those indie spots’ quality, it only shows that the majority of people who dine out prefer predictable food, something chains have mastered. Such food regularly bores me to tears, but after 35 years of either feeding people or writing about those who do, I understand and accept this is the way it is. And in a city whose overall population growth is slow, that 20 percent slice of the dining customer pie isn’t going to grow noticeably anytime soon.
Most important is this truth: That pie is only further subdivided when a new indie eatery opens. And as long as there are ambitious entrepreneurs who enter the fray believing they can outfeed and out-serve the next guy, gross revenue at indie stops will drop, profits will decrease and restaurants will close.
The capitalist in me says that’s the way it should be.
The reporter in me knows it’ll keep things exciting.
And the realist in me predicts you’ll see it happening fairly soon.