How much did New Zealand miss restaurants? Grand Park Chinese Seafood Restaurant's dim sum is on a new list of Auckland iconic eats. Photo/Supplied
It was an $11 billion business employing 13,000 people that closed with 48 hours notice. How did the restaurant industry survive Covid-19 - and what does its future look like? Kim Knight on paua ravioli, the price of noodles and just how much pork belly Ponsonby really eats.
Alan Fong knows that sometimes there will be rain, hail and floods. His family has grown vegetables in Pukekohe's volcanic soils since 1956 and the business literally depends on weathering storms.
But this?
"It's a big storm. It's a really big storm."
When New Zealand closed for Covid, nobody knew what would happen next. Fong's company was an essential service, but his customers weren't. Some 70 per cent of The Fresh Grower's petite cos lettuce, fancy salad greens and sweet-stemmed broccolini is sold to restaurants.
Overnight, that market disappeared. Fong ploughed in "hundreds of thousands" of broccolini heads. Right now, he's seeding for crops that will be harvested in January, but "we have to scale down. Some lines by up to 60-70 per cent. Others by 50 per cent. Just to try and second guess what's going to happen".
If your restaurant salad looks a little bog-standard this summer, it's because of stories like this. Growers are only growing what they know they can sell, and chefs are being forced to play it safe by proxy.
"I don't want to put bok choy on the menu, dude," one restaurateur told the Weekend Herald. "I want some fancy flowering mustard green or something."
In May, when the country came out of its first lockdown, Restaurant Association members reported 500 hospitality industry job losses. In June, a further 420. The exodus is slowing - 164 more out of work in August and 84 last month - but hospitality workers are holding their breath.
What will the dining scene look like in a year's time?
"Talk to the breweries," says Richard Sigley, chief executive of Nourish Group, which owns restaurants in Auckland, Wellington, Taupo and Queenstown. "They think about 25 to 30 per cent of their customers may not be around. It could be horrific."
Nourish has already closed one Auckland waterfront business, moving The Crab Shack into now-defunct The Culpeper. Its flagship property Euro reopened yesterday with a radical refit - the white tablecloths are gone and the menu is a sea of shared plates.
"The inner city is pretty tough," says Sigley. "No tourists, the roadworks, the bridge, the weather, you name it. In Auckland, we've had the perfect storm. The change at Euro is less to do with Covid, but that probably pushed us over the line. It's a calculated risk."
Meanwhile, the suburbs are booming. Sigley reports the spend at Herne Bay's Andiamo (think $31 saffron maltagliati with braised beef cheek ragu et al) is up 25 per cent. He's so personally confident in the "buy local" story, he's just negotiated to buy Banque Oyster Bar in Remuera.
"Fortune favours the brave," says Sigley. "Innovate or evaporate."
In 2019, the Restaurant Association reported annual sales of $11.7 billion. Almost 40 per cent of that spend was in Auckland, where close to 7000 hospitality ventures (1100 more than five years earlier) were based.
Quantifying Covid-related closures is difficult. The Association reports that between March and October, 80 of its members shut shop. Extrapolate that across the industry, and estimated closures rise to 540. But hospitality has always been a precarious business - in 2018, for example, 2172 operations closed nationwide.
Even harder to quantify are Covid-related service cuts. Every operator the Weekend Herald spoke to this week had reduced staff numbers and opening hours. Many inner-city restaurants had dumped their noon service and seven-day operations seemed increasingly rare. SkyCity Auckland has a new casino-adjacent food court opening next week, but walk Federal Street on a Friday lunchtime and the once shiny-shouty precinct is subdued. Bellota has been shuttered for weeks; The Grill and Masu are closed until 5pm. General consensus is the business lunch is wearing stretchy pants and making a toasted sandwich at home.
"We are busy on weekends and experiencing softer midweek trade meaning many of our outlets are operating at reduced hours - something we will continue to monitor as border restrictions ease," says Callum Mallett, SkyCity's executive general manager hospitality. "We are eagerly awaiting the creation of a transtasman bubble."
You'd have to be mad to open a restaurant in the middle of a pandemic, right?
In fact, some of Auckland's biggest food names have brand new businesses. International superstar Peter Gordon is home for Homeland, Michael Meredith's Mr Morris is slated for mid-November and Josh Emett has just started slinging 48-hour cured salmon gravadlax at Onslow.
The Herald's Lincoln Tan has previously reported Paradise Indian Restaurant owners are looking to open a fifth outlet in Sandringham, Dominion Rd newcomer Mr Hao is getting a sister upmarket Asian gastropub and international ramen chain Ippudo has also announced expansion plans.
Meanwhile, at the $700m downtown Commercial Bay development, more than 40 different food and drink outlets are vying for customer dollars. Early on a recent Thursday, it smells like steak. Skip the multi-operator "Harbour Eats" space and head for corner restaurant Ahi where chef Ben Bayly is dumping branches of fresh-cut kawakawa on a kitchen bench. He's serving Aotearoa on a handmade ceramic plate but a Covid-19-delayed opening (on the back of construction delays) was not in the original plan.
"We all thought we were going to lose everything. We thought the sky was falling in."
Bayly spent the hours before lockdown sauteing kale. At his Henderson restaurant The Grounds, staff packed freezers with cooked-down trays of spinach and onions and when the country went to level 3, they put shepherd's pie on the takeout menu.
"Man, it was so good."
Across town, Ahi was unfinished and empty. Bayly says the investment was "a couple of hundred thousand" deep when level 4 hit.
"It wasn't fully set up, we hadn't employed anyone yet . . . it really would have been a good time to pull the ripcord . . .
"A big part of Covid is about becoming a better businessperson and putting better systems in place to allow you to financially manage your restaurant. You have to know the numbers. Don't worry about your yearlies, your monthlies, worry about your every day. And maybe you're not going to order five bunches of chives. Maybe you'll just do two."
Bayly thought Ahi would serve 130 diners a day. When he spoke to the Weekend Herald earlier this month, it was from a socially distanced level 2 setting and he was averaging 70. Turns out, "that's the magic number for us . . . this just feels right".
His hāngī-smoked pāua and tahr tartare are to the waterfront as Depot's fish sliders and hāpuka belly with kasundi are to Federal St. These are dishes tourists could, and should, travel for. Food that proves New Zealand is more than a meat pie, being produced by an industry that, this year, got political.
Krishna Botica, from restaurant group Comensa, says: "Through GST, our industry delivers billions of dollars to government each year, but we've never lobbied or asked for anything for decades. I do think the pressure is going to be on - government needs a far more nuanced response going forward.
"Jacinda [Ardern] was talking about growth returning back to 93 per cent very quickly after the last lockdown? Well, that's still 7 per cent down, and the problem is that is actually just across one or two industries. That's a massive hit."
Restaurant profit margins average between 3 and 5 per cent. You can make more on pasta than you can on crayfish, but overall, for every $20 diner spend, restaurants clear between 60c and $1.
"If someone does a double shot of an ingredient every fourth time they're serving it, spillage, wastage - anything can erode those averages," observes Marisa Bidois, Restaurant Association chief executive.
"Those who fall out from the Covid situation, I don't think it's because they couldn't cut the mustard . . . there are very few businesses that have the kind of cushioning that can withstand hits like this. Sixty per cent revenue drops over an extended period of time? We're talking nine months now with no overseas visitors coming in . . . we've had this incredibly disastrous event happening."
In July, the Association released an election manifesto. It calls on the incoming government to support regional ad campaigns, one-off hardship grants and rent relief. It wants a subsidised dining scheme (similar to that launched in the United Kingdom where government foots 50 per cent of the bill), the temporary removal of GST on fresh fruit and vegetables and a hospitality-specific team inside Immigration NZ.
Bidois says she'd hope to get meetings on these issues "before Christmas", pointing to other sectors like racing that contributes just $1.6b to GDP (compared to hospitality's $6 billion) yet has its own minister (another manifesto demand) and received $52m in targeted Covid relief.
Restaurants are crucial to the country's recovery, says Bidois.
"That's our social space. The part we play in the Covid recovery is bringing communities together again. As humans, we're naturally inclined to want to connect and interact and restaurants and cafes provide a really natural space to be able to do that."
There are moments now, when it's easy to forget Covid. The signs are (literally) everywhere, but once you've scanned and sanitised, New Zealand's new normal looks like an arena concert from Benee one night and a Bledisloe Cup rugby match the next. Internationally, it's a moving feast.
In the United Kingdom, some cities (including London) are at "tier two" - 10pm closing, maximum of six diners in one group and no indoor mixing of household bubbles. Indoor dining has just resumed in New York, but only at 25 per cent capacity. Hong Kong diners are still subject to temperature checks, and masks have to be worn before and after meals. Melbourne's metropolitan restaurants have been closed for sit-down dining since August. Paris has a 9pm curfew. Singapore, which banned alcohol after 10.30, recently busted one restaurant serving beer out of metal teapots and its dining outlets have reportedly been instructed to play only soft music to discourage patrons speaking loudly and spraying droplets.
This week, at an industry-wide food hui in Wellington, restaurateur Shaun Clouston (Bellamy's and Logan Brown) told delegates: "I've been talking to mates in other parts of the world and it's an absolute s***show."
You do what you can to survive. At that same hui, Jugnu Gill, who owns four Little India restaurants, talked about centralising tandoor roasting and the production of onion sauce. Caterer Ruth Pretty said she had shifted from functions for 1000 people to themed cooking schools - Christmas in Venice ($240 a head) had sold out all 13 days. Jackie Lee Morrison, from dessert shop Lashings, joined forces with 16 other businesses to launch a cookbook that sold 10,000 copies "that enabled people to pay rent, power bills and suppliers".
Krishna Botica, whose Auckland restaurants include Saan, Cafe Hanoi and XuXu says Covid has reunited the country's hospitality industry.
"Because every time you turn around, there's someone else now who has got a worse story, or one of your friends has lost a job . . . there's not one person I know who hasn't felt this in some way, shape or form".
At level 2, her restaurants lost a quarter of their tables to social distancing. But Botica says the biggest change, post-lockdown, was how people's dining habits changed.
"People were used to going to bed at 8pm, watching Netflix . . . it's not just the physical distancing that's the issue, it's the fact that, heaven forbid you suggest they come for dinner at eight o'clock. They're not going to movies so much, there are no events on, so why would they possibly consider going into the city?
"Habits shift and they shift quickly and it was a very slow return to double turns on our tables . . .
Every person in Auckland wants to go out on Friday night at 7 o'clock. That's a killer for
restaurants. We may have to close some Mondays and Tuesdays, because people are not
going out."
Botica has cut some lunch services and reinstated others. Introduced an aperitif menu at a refurbished Cafe Hanoi to grab more of the 5.30pm drinks and snacks crowd. Masks are compulsory for staff and at least 10 per cent of her front of house team will be asked to undertake Covid testing every three weeks.
"What gets you down is the constant decision-making . . . you're having to pivot on a business concept on a relatively regular basis, not just based on what the Government regulations are, but the feedback from customers . . . you still have to juggle all the customer expectations.
"Restaurants are a private business in a sector that's sometimes still perceived as a public service."
Not all lockdowns were equal. Some people made sourdough and everyone else dreamed of burgers. Herald business journalist Aimee Shaw reported that during the five weeks the country spent at level 4, Restaurant Brands (KFC, Pizza Hut, Taco Bell and Carl's Jr) lost around $50m in sales. Remember the queues when we were finally allowed fries with our pandemic?
"It made me want to buy a McDonald's," says chef Che Barrington, who oversees the food at Ponsonby's Blue Breeze Inn, Chop Chop and Go Go Daddy, and Woodpecker Hill in Parnell.
The day we spoke to Barrington, he'd just heard the cost of his bespoke ramen noodles was increasing by $1.35 a kilo from November. Beef brisket was up 50c a kilo and it was becoming increasingly difficult to source cooking oil from Malaysia because of shipping issues. The pickles he buys in from Australia had been delayed by Victoria's Covid shutdown and all of this, he said, could impact on summer menu planning.
"Pork is the one thing that hasn't gone up yet." Just as well: "At Blue Breeze alone, we use about one tonne of pork belly a month."
He and business partner Mark Wallbank significantly changed their Parnell offering during lockdown, getting rid of a smoker (cooking large amounts of meat was expensive) and making the menu more casual. One of the new offerings, a cheeseburger bao, has become an instant classic, selected by Depot chef Al Brown in an Auckland Tourism, Events and Economic Development (Ateed) initiative to find 100 "Iconic Auckland Eats".
"I wouldn't want a fine dining restaurant right now," says Barrington. "It's about adapting. Look at Bar Celeste on K Rd. They boxed up the wine that you can't get in supermarkets, they did takeaways, they were really proactive . . . It's about having something different and drawing customers in; but that's always been New Zealand's thing. We have a small population that eats out, so we're always evolving and changing everything to attract those customers in."
Stephen Plowman is "captain of beer" at Hallertau. Mostly known as a brewery, the Riverhead operation is about 60 per cent food sales - and, post-lockdown, locals returned in droves.
"Coming out of the second one, it was a little bit slower but last week, for example, we turned over $1000 more than we did for the same time last year."
Plowman says in the past three years, 500 new houses have been built in Riverhead and Auckland's wider northwest area has grown by about 2000.
"I'm worried about the centre of the city. Suburban places like us should be pretty good but because that downtown relies on all those tourists that aren't really there; we're going to see a bit of carnage I think."
Once a week, the Clyth Macleod Business Sales team meets to discuss listings. Managing director Glorianne Campbell says rent is a key factor for the food industry.
"Suburban locations generally have lower rent than areas such as the CBD, malls, Newmarket, Parnell, some seaside locations . . . we most definitely have seen a swing towards lower rent locations for retail food."
Compare, for example, a current North Shore listing with a weekly rent bill of $661, compared to a CBD cafe which Campbell says is turning over $9000 weekly, but paying $1900 in rent.
"We are not seeing all bad. There are some sympathetic landlords assisting their tenants."
Campbell knows of one Covid-related business casualty on Karangahape Rd, for example, where the yearly rent has been reduced to $60,000, "much lower than market rent".
This is not just an Auckland story. Steve Kent, general manager of the fresh produce and processing divisions at Bidfood (a wholesale restaurant supplier) says he's hearing inner-city eateries in Hamilton, Wellington and Christchurch are all underperforming, often because people are still working from home. In some regions, including Auckland, Bidfood has ceased Sunday deliveries.
"There is a lot of rationalisation going on. We're seeing a simplification of menus, customers are trying to do more with less . . . and the supply chain has challenges. Some growers are not replanting. Gourmet heirloom tomatoes, microgreens, some of the herbs - at a restaurant level, they may be harder to get, or more inconsistent in supply."
Kent suggests customers might need to get used to blackboard menus that can be changed according to supply, or more non-specific phrases like "seasonal greens".
Operators the Herald spoke to from around the country are changing the way they work. Steve Logan, from Wellington's Logan Brown, says he's cut six dinner and four lunch offerings to just five evening services. Nine staff were made redundant and four separate menus (pre-theatre, chef's tasting, etc) were stripped back to one. He estimates the Cuba Street restaurant is serving one-third of the dishes it offered pre-Covid.
"It just happened so fast. It was super-stressful and we just thought that was the end of it. We thought that was the end of our business . . . you've got all of your team, all of this food, there's no-one on the street and it was apocalyptic. Everything just came to an absolute stop."
At level 3, staff packed sauces and sprinkles and crunches into take-out containers. They couldn't offer the signature paua ravioli but otherwise it was "Logan Brown at Yours" and the customer support ("you really felt a sense of community") was heartening.
"Change or crash. It's almost good that it was so bad that we had to change," says Logan.
"You have to really look hard at the opportunity for change, and get the courage and get the help to do it. As hard and horrible as it was, we're through it and we feel strong now."
In Queenstown, where Mark Jessop has operated Prime Waterfront Restaurant and Bar for the past 16 years, some 75 per cent of his customers were overseas tourists. He's relying on Kiwi travellers to help pay his annual $200,000 rent bill - and he estimates he lost $50,000 in May, operating under level 2 conditions.
There is no playbook for this. The last time it came close to being this bad, says Jessop, was the 1999 floods. Back then, two metres of rain fell in two days. Queenstown was underwater, "but that was a finite period and we knew everything would come right. The problem here is we don't know what is going to happen."
And, he says, there's more pain on the horizon. Jessop relies on international workers to staff his restaurant. Earlier this month, the Ministry of Social Development released a new "oversupply" list - roles for which it is deemed there are already too many local jobseekers. It included cooks, waiters, kitchen hands and cafe workers.
Jessop is emphatic: "There are NO unemployed New Zealanders capable of holding down a job in hospitality in Queenstown . . . as our staff visas expire, or they decide to complete their New Zealand experience by taking a country tour, we are all fighting or scrapping over staff, with the inevitable increase in rates, as well as fighting with the stonefruit and wine picking industries who have the same problem."
What is the future of restaurants? On the first day of last week's Food Hui, live-streamed from Te Papa and hosted by the Restaurant Association, panellists considered exactly that question. They talked about the positive "brand halo" benefits of the country's Covid-response and the potatoes that grow wild from peelings in Moeraki. Scientists discussed intramuscular fat (and flavour) and it was noted that, right now, there are 125 chef vacancies in Wellington alone. Mostly, they talked about the need to just hang in there.
"Just stay open," said Boulcott Street Bistro's Rex Morgan. "If the borders are open, the world's our oyster."
ANOTHER HELPING? SEVEN WAYS COVID 19 IS CHANGING RESTAURANTS
Fewer waitstaff: Restaurants like Auckland's Crab Shack are trialling iPad table ordering technology and replacing waiters with food runners.
The Aperitivo Hour: Enhanced snack menus designed to grab the after-work crowd as restaurants struggle to turn over second sittings.
Seasonal menus: By compulsion, not choice, as disrupted and congested shipping mean local low-supply periods can't be offset (looking at you, Australian courgettes).
Smaller portions or higher prices: Protein prices are going up, something has to give, and it might just be your steak.
Hyper-local: Less CBD, more suburbia. The rents are cheaper and customers can walk from home (that $9 fancy deli pie is totally affordable now you're saving on your work commute).
A return to the classics: With fewer international visitors and more Kiwis with kids travelling, tourist towns are re-embracing traditional family favourites like bangers and mash.
Politics at the dinner table: Hospo is unifying like never before, demanding its own Government minister and a subsidised dining scheme for the public.
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