Can a Restaurant Do Well and Do Good?

(Bloomberg) -- Ikigai is a great restaurant. It’s also a good one.

At this new Brooklyn omakase, a recent dinner begins in the rear garden-turned-Japanese tea room with milk bread and miso butter, okra and lotus root pickles and kombucha-like rhododendron fermented tea. After a while, diners—a dozen per seating—are ushered into the subterranean dining room for the remainder of their 12-course, $165 meal. Chef Rafal Maslankiewicz, a veteran of Wildflower Farms in the Hudson Valley and Manhattan’s Eleven Madison Park and Masa, adds grace notes from Poland, his home country, to kaiseki, the most traditionally Japanese of meal formats.

On a recent evening, that translated as roast Okinawa sweet potatoes topped by red cabbage braised in spiced Banyuls vinegar. Rosy slices of duck were served with stone fruit preserves and pickled baby chanterelles. After the final dish, the traditional dumpling knedle, made with the Japanese rice flour used for mochi, owner and tech entrepreneur Dan Soha addressed the guests. “Ikigai is a not-for-profit restaurant, meaning every dollar of our profits goes to an organization called Rescuing Leftover Cuisine. On day 35, we’ve officially saved 75,000 pounds of food and gotten it to people in need.”

No, You Can’t Have Chocolate Dessert on the Menu

Pick a difficult societal issue—wage or gender inequality, food insecurity, food waste, systemic barriers to workforce participation, or even the environmentally damaging prevalence of single-use plastics—and you will find it vexing the restaurant industry. You will also find restaurateurs like Soha who put finding and implementing solutions on par with their mission of feeding hungry guests.

Those solutions rarely come cheaply or easily. “Can a Restaurant Do Well and Do Good?” was the theme for a discussion in June hosted by MAD, the nonprofit founded by Noma’s chef and co-owner René Redzepi, with the “ambition of transforming hospitality and driving change in food systems.” Moderated by Jamila Robinson, editor-in-chief of Bon Appétit, with panelists Mark Bittman, Edward Lee and Erin Wade, the audience couldn’t help but come away thinking that the only thing harder than turning a profit with a restaurant is creating and sustaining one as a nonprofit.

“It's ironic that I'm here, because I was actually supposed to announce the opening of my nonprofit restaurant next week, but we ran out of money and we couldn't raise the money,” said the prolific author and chef Lee. While his LEE Initiative has helped empower restaurant workers since 2018, this project left him frustrated. “I have to say the last four months have been the hardest time of my career,” he said.

After spending the summer fundraising, Lee has just announced the fall opening of Shia. His Washington restaurant/test lab/think tank will serve refined Korean fare with the goal of reducing food waste by at least half, operating without gas and researching how to eliminate single-use plastics from the restaurant supply chain. Sacrifices will be made—there will be no chocolate dessert on the menu, Lee says, because he can’t find any that don’t come wrapped in plastic. But other limitations will come with benefits: Rather than cryovaced beef from Texas, he’ll source meat locally. His findings will be made available to diners and restaurateurs, who might want to follow a similar path but don’t have the resources for research.

Operating as a fine dining restaurant allows the LEE Initiative the financial wherewithal to research and innovate, with the hope that what he creates at Shia (Korean for seed) will eventually propagate across the industry.

A Mission-Minded Place with $1.6 Million in Sales

The goal of many civic-minded restaurateurs, however, is to make their food accessible to as wide of an audience as possible. At the MAD panel, author Bittman, who has been researching a restaurant project of his own, noted that “restaurants have enough trouble making money as it is, but if you're going to start giving away food [or] serving food on a sliding scale, then you have a real issue.”

But that’s not to say a restaurant can’t be mission-minded, affordable and also profitable, said fellow panelist Wade. At her former Oakland restaurant Homeroom, which she sold in 2020 (she holds a seat on the restaurant group she sold it to), the specialty is an elevated take on macaroni and cheese. By keeping the cooked-to-order dish competitively priced and by not insisting on expensive ultra-premium ingredients, the restaurant started with block-long lines and stayed packed.

“In our first year in business, we did $1.6 million in sales. By year ten, we were just shy of $7 million out of our shoebox-sized restaurant. Homeroom's financial metrics put it in the top 1% of restaurant performance in terms of revenue per square foot. We were small, and extremely mighty. Even a high performing national chain like Chipotle would have had to invest in opening multiple stores in the same time span to have achieved the growth we achieved out of our one location,” she wrote in her new book, The Mac and Cheese Millionaire: Building a Better Business by Thinking Outside the Box ($17; Wiley, Sept 24.)

Wade, a lawyer-turned-restaurateur, operated with the intent of upending the sorts of labor practices that leave the restaurant industry with an average turnover rate of 80.2%.

“Early on, I had big visions of being not only this amazing place to work, but having incredible sourcing and all of these other things, and honestly it became clear that I just had to pick one battle to focus my time on, and I picked people,” she says.

By implementing progressive practices such as open-book management, employee management techniques based on the principles of restorative justice, and a pioneering system for dealing with sexual harassment (which became a model for countless other restaurants), she raised the average stint for an employee to two and a half years.

“That’s 10 times the industry standard,” says Wade. “People might say, ‘oh, that sounds time-consuming’ and ‘time is money.’ That's true, but it's really time-consuming to keep hiring people and training them to do stuff.”

When Staff Turnover Is Good

The turnover at LocoL in Los Angeles is sure to be higher, but that’s by design. It was opened in 2016 by chefs Daniel Patterson and Roy Choi, with the goal of offering the people of Watts both high-quality affordable food and job training that can be leveraged into careers in the restaurant industry. The restaurant closed in 2018 but reopened last month, with Patterson joined at the helm by Keith Corbin, an original LocoL trainee, who went on to open acclaimed California soul food restaurant Alta Adams with Patterson.

LocoL is now a nonprofit, offering training and job placement assistance to the community while serving soul food standards like oxtails, fried chicken and BBQ beef ribs. Support came in the form of grills from Traeger Inc., meat and poultry from Brandt Beef and Jidori Chicken, which helps to keep dishes at an affordable price point, and money from Wells Fargo, Selena Gomez, and Corbin and Patterson’s own pockets. Despite LocoL’s track record and profile, civic support has been a sticking point, with a very few exceptions. “The city is failing to step up for us,” says Corbin, who is looking for grants and local funding.

Not having to chase money is one of the things that sets Ikigai apart from most other restaurants. Soha spent 15 years working 16-hour days in the tech industry, starting and selling such businesses as digital marketing agency Five Mill, so he could afford to do this. He owns the building where Ikigai is, so neither rent nor investors will impede his mission.

“Sometimes I feel like I’m cheating,” he says, sounding a little humbled for his good fortune in having a restaurant where the food is notably good, and so is the mission.

(Update removes copy editor note in eighth paragraph)