David Chang's New Startup: A Restaurant Without the Restaurant
wired.com
wired.com
If you are doing high-end food, it need to travel extremely well. Having tried a lot of food delivery services - with both first- and third-party drivers - I rarely order anything other than pizza or Chinese food for delivery anymore.
Pizza places, Jimmy Johns, and many Chinese food restaurants have perfected the food experience and delivery network. But the truth is, their products are pretty average.
I think this has been tried in the past. http://www.grubstreet.com/2011/05/introducing_savory_a_deliv...
They're playing a volume game. And without alcohol sales, they'll need a lot of volume. So then the question is this: Does "fancy food" from a high end chef like David Chang have a wide enough appeal to solicit the type of volume needed for this to be successful? I suspect it does in pockets of NYC. From a higher vantage point, I'm less optimistic.
Restaurants are about more than food though. Their job is to set a stage with design, lighting, music, background noises, service, plating, and conversation amongst other human beings. That's why people pay $1000 for a bottle of wine, $45 for a New York Strip, or $4.50 for a cup of coffee. If we didn't care about these other things, we would all be getting delivery, making our own food, or eating out of vending machines and paying 75% less to do so.
My delivery options are very limited, and vending machine food is almost universally terrible. I cook a lot, and like it. However, sometimes I do not have the time or do not want to devote the time to cook, so I go to a restaurant. Plus, there are some things I can't do well at home for lack of equipment. For those cases, I go to a restaurant. I don't care much about design and lighting, hate having what most places call music, don't like much background noise, and really don't care what the food looks like on the plate. It is a predominantly functional experience for me. Some of my favorite restaurants are very Spartan affairs.
Now, I have no idea how typical I am and suspect it varies based on location. I am probably closer to typical here in Dallas than I would be in NYC.
Whoa, putting all the charges in the advertised price? Madness!
Seriously though, I wish this was the norm.
For an alternative vision, Chicago's Alinea restaurant (with 3 Michelin stars, one of the greatest restaurants in the world, possibly the greatest in America) has gone from traditional reservations to a ticket-based model. You buy tickets in advance for your meal, like you would a sporting event or a concert. Tickets aren't refundable, but they're transferable. That's a fascinating model, at least for a restaurant that can be jampacked full with wait times running out weeks or months in advance.
Perhaps you could just pay for drinks, I guess, and have the meal on the ticket. I assume their price covers all your typical upcharges anyway.
Upscale experience matters.
Why do people spend $600 for a phone that they use to do stuff a $80 phone does, except the $80 phone has an effectively better battery and often gets better signal?
people filter out the products that are not good enough on their own. they decide which ones of the remaining products they will buy based on how they feel about it.
It's almost like Apple having Ives. Of course, we are ignoring all of Apple's other advantages too.
Delivery, which is included in the OP, is also an economy of scale. It doesn't make sense to do a delivery run just to make a $1 profit.
Couldn't costs be driven down via crowdsourcing and no real estate?
Cachet restaurants offering singular experiences can get that monopoly of uniqueness to a certain extent, but it's very difficult and requires operating at an extremely high level of art.
So basically, if you want to compete on price, welcome to racing to the bottom, and competing directly with the likes of Dominos and McDonalds. At tiny margins, economies of scale become extremely important.
In the case of this story, by bringing a world-class chef like David Chang in (see the first season of Mind of a Chef to grok his greatness), they're going for an upscale market - people who really care about eating. Those people will always be outnumbered 100:1 by people eating wretched disgusting crap at Subway. That's where the quasi-monopoly comes in - not just delivering food, but delivering the kind of food a mind like David Chang can create, at lunchtime prices and convenience.
So Maple isn't competing with Domino's. They're competing with fine-dining lunches.
If my neighbor can cook my rice and beans for $0.30 USD / serving, or $3 for a basic salad (spinach, serving nuts, beans, olive oil, vinegar), I'd pay $1-5 to have that delivered to me. How does that not keep up with profits?
I mean what's shocking to me is that families across the country make these basic meals that seem clearly too basic for restaurants to make. But most families (especially poorer ones) just don't have time to make the food, but they want something cheap, so they resort to fast food - when I'm sure they'd be fine with spending the same (or less) on a rice and beans dish instead of a big mac.
Yesterday, I took my daughter out for a very fancy lunch at a fine-dining place which would probably rate a Michelin star if Michelin ever visited us in flyover country. My rabbit spaetzle was $13, and her crab tagliatelle was $15... not a whole lot more than the cost of Olive Garden. And both were flawless, nearly magical, unlike Olive Garden pasta (alas, no unlimited breadsticks).
Let's look at this another way... who is your customer when you're competing on cost? You're trying to underprice below the dollar menu at Burger King. That's very hard. Whereas for professionals, the difference between an $8 meal and a $12 meal is just no big deal. You can see this with restaurant chains - most have certain economic zones. You won't see a Noodles & Co in a poor neighborhood, and you won't see White Castle in a rich one.
Here in my city restaurants seem to be all about specialty cured and smoked in-house meat there's an explosion of hipster hand-made Ramen noodle houses with said specialty meats that have lineups down the block everyday for lunch.