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The Future of Restaurants

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The Future of Restaurants

It’s the summer break. We at The Family pride ourselves on always being on call, because startups require all-hands-on-deck in their frequent moments of crisis. However, we’ve observed that even in startups everything in Europe comes to a halt in August. Children are out of school across the continent. Angel investors and VCs are far away on their boats or sandy beaches. Entrepreneurs catch up on sleep. And so there’s no point to staying connected and trying to work when everyone else isn’t 🤷.

As for me, I’m spending the next weeks in Normandy with my wife and kids. We have a small house there, one that’s deep into the countryside, without any neighbors. We can enjoy the silence at night, rabbits running around the garden early in the morning, the possibility of listening to extremely loud music without bothering anyone, thousands of DVDs for the long evenings, and almost all of our books, which makes for quite a choice when we don’t know what to read.

One thing’s missing, however: restaurants. Our place is so far removed from any town that you need to drive at least 25 kilometers to find a decent place with good food. That’s not necessarily bad: cooking your own food makes it possible to fully control your diet and nutrition. But restaurants are about much more than food, and to compensate for the lack of them around here, I’ve decided to dedicate this issue to the future of restaurants. Read along 👇

The future of restaurants

1/ What inspired me to write about restaurants is a long article in the Guardian that my wife Laetitia tweeted about a while ago: The rise and fall of French cuisine. What we learn in this article, among many other things, is that just like most of what we take for granted, restaurants are a fairly recent invention. They appeared sometime in the 18th century, when butchers in Paris started to entertain customers with food (in that case, bouillon) that they could consume on site rather than taking it away. And so restaurants developed out of retail in Paris, becoming a global possibility for buying food and eating it right away—an alternative to Asian food stands, English pubs, and German Biergärten.

2/ Indeed, as discussed in Wendell Steavenson’s article above, restaurants are as much about the experience as they are about the food. It’s about the ritual interactions between customer and waiter, the customers themselves, and careful orchestration. And the French approach to this experience—being seated by a maître d’hôtel, ordering from a waiter while seated, taking as long as you need to consume your food, not interacting with other customers too much, and paying right before you leave—became a kind of world standard. It determined a whole, complex economic equation that has been refined over centuries and mastered by restaurateurs like Anthony Bourdain.

3/ Now let’s go through everything that is changing in the restaurant as an experience.One of the oldest articles clipped in my Evernote related to restaurants is about reservations. Why does a reservation add so much value as a service (you really want to have a table in that favorite restaurant of yours), and yet no restaurant dares to make the customer pay for it? Here’s the secret: You rarely pay for the reservation because that would be an affront to the chef, who entertains the myth that you’re paying for their food rather than the whole experience that is that restaurant. But there is such a thing as paying for reservations, and entrepreneurs are already experimenting in that space.

4/ Now something else is happening in the industry: there are fewer and fewer people willing to work in restaurants. You might have heard the story of Emmanuel Macron telling an unemployed graduate about the many jobs waiting for him in restaurants “across the street”. It was taken as an insult. Why, indeed, would someone with a master’s degree work at a restaurant? The pay is low; you need to live in the city, which is expensive; hours are odd (evenings and weekends); management is terrible; harassment is frequent; and don’t count on benefits since your work is probably not registered anyway. And so like every business in proximity services, restaurants have a hard time hiring.

5/ Not only are restaurant workers more difficult to attract, owners have difficulties paying the rent. Because restaurants are typically located in dense urban areas, they’re affected by the same tension that’s making rents skyrocket in every large city around the world. In certain places, this leads to absurd outcomes, like restaurants becoming scarce in Manhattan—not because they’re lacking potential customers hungry for a great experience, but because covering the rent would mean billing staggering prices for ordinary meals. And customers now have many fallback options: they can take away their food or have it delivered wherever they like. And so you can only go so high when it comes to pricing a meal.

6/ There’s something else. Like in every industry, customers are confronted with a broadening choice of food. The diversity can be staggering. For restaurants, it means two things: volatility (you can’t count on customers coming to the same place forever), and customers having the upper hand (if they have a broader choice when it comes to eating, they’re entitled to a higher quality at a lower price, to say nothing of  counting on more transparency on ingredients and how dishes are prepared). Let me tell you that traditional French restaurants are not used to accommodating their customers with vegan, gluten-free, or lactose-free options. And that, according to customers, needs to change.

7/ That change is not happening in restaurants, but outside of them. Retail food stores are now way ahead of restaurants when it comes to accommodating specific tastes and dietary requirements. Unlike on a restaurant menu, at a store you can actually check what’s in the food you’re buying. Add to that the spectacular development of the food delivery sector, and you have a looming picture of restaurant doom. Because it collects so much data from its users, Deliveroo has been spotting all the gaps in the current supply and has come up with satisfying options for frustrated diners. If you browse the Deliveroo Editions section in the app in London, you’re certain to find the niche food of your dreams: vegan pizza, poke bowls, Peking duck, even delicious Indian curry (which, believe it or not, is now rare in London).

8/ The enabler of the dining experience getting out of restaurants is that new phenomenon known as dark (or cloud) kitchens. Entrepreneurs have realized that freshly prepared food is in the process of being unbundled from the experience of consuming it—which can now happen at home, at the office, at some food court somewhere in the city, or wherever you’re attending an event. As a result, a logistics revolution is happening: fresh food can now be prepared away from where the customers consume it, which makes it easier to find affordable rents for those kitchens and to attract workers to populate them. Note that Travis Kalanick himself has joined the cloud kitchen battle after leaving position as Uber CEO.

9/ Now, if you connect the dots, you realize why that article in The Guardian was discussing the fall of the French cuisine. The food itself might still be good, but the experience is now quaint and economically unsustainable. These days, high-quality, customized food is commoditized, providing an opportunity to build giant urban infrastructures dedicated to preparing it on demand. What is not commoditized is the experience of consuming that food, and this is where the focus of innovative entrepreneurs has been shifting. I see two main options emerging on the market. One is the revenge of the hawker center: places where you can sit, alone or with a group, to consume the food bought from your preferred supplier. You’ll likely have to pay for the reservation, though—talk about unbundling!

10/ The other option has been summed up by my cofounder Oussama: “Food is the new music, chefs are the new stars”. Imagine if the best chefs, instead of being stuck in one restaurant all year long, were constantly on tour. You would have them in your city for 1 to 20 nights, bookable in advance, delivering a full stack experience: briefing you on the ingredients, demonstrating how the dishes are prepared in the kitchen, introducing you to their team, and hearing your feedback. It’s not a fantasy, because one of our entrepreneurs, Luca Pronzato, has designed exactly this experience. It’s called ONA, and the idea was envisioned by food critic Jonathan Gold as early as 2009“While nobody was paying attention, food quietly assumed the place in youth culture that used to be occupied by rock’n’roll—individual, fierce and intensely political.”

Should we expect French-style restaurants to go the way of classical music?

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