April 9, 2010

Restaurant industry remains wary of health reform

Health-care reform has been signed into federal law, and although no one knows exactly how it will affect the social fabric, the National Restaurant Association, for one, remains cautious. Its official position, according to a March 19 memo, was that the bill would have a “severe negative impact on restaurant businesses… (and) would increase costs and impose extremely onerous administrative burdens throughout the industry.”

These worries appear to stem from the industry’s demographics: It is dominated by seasonal, small businesses that employ a high proportion of young and part-time workers.

The Accommodation and Food Services sector also saw an annual turnover rate of 75 percent in 2008, compared to 49 percent in the overall private sector, according to the Bureau of Labor Statistics. Whether that is a reason to oppose health-care reform or an indication that reform is overdue may be simply a matter of perspective.

However, the NRA does approve of some elements of reform: the provision that allows restaurateurs to set the criteria for offering health benefits to part-time workers; a 90-day penalty-free waiting period, so that new employees do not get covered for three months; special provisions for multistate operators; and the definition of a full-time employee based on number of hours worked quarterly instead of weekly.

In a way, the restaurant business – the second largest employer in the private sector – may be an ideal canary in the health-care coalmine. The industry exists in a perpetual state of optimistic reinvention. Profit margins are notoriously low, chefs notoriously temperamental. Servers rarely see their work as a long-term professional choice; many would rather be acting or skiing. As a result, a locally owned establishment or small chain needs to be nimble enough to adjust quickly when hail wipes out the spinach crop or the price of jet fuel raises the price of fresh fish.

How well health-care reform plays out in the industry might be a real test for how well a government plan can work in a sector driven by entrepreneurial zest.

By the way, the number one employer in the private sector is, perhaps ironically, health care.

The breakfast club

On March 31, Patty and Rayno Seaser, founders and owners of the Egg & I restaurant, were inducted into the Colorado Restaurant Association Hall of Fame, honoring more than two decades in business in Northern Colorado. Bravo.

Hoping to follow in the Seasers’ success is John Schlegel. In 2006 Schlegel, a graduate of the University of Denver’s hospitality program, decided that fine dining was not in his future, so he opened Snooze, an AM Eatery.

A scant four years later, one Denver restaurant has become three and Schlegel the winner of the CRA’s 2010 “Exceptional Newcomer” Signature Dish Award. This award recognizes an individual “new on the scene who is making extraordinary contributions in the hospitality industry and the community, demonstrating leadership and innovation.”

Schlegel also made a winning choice to focus on breakfast and lunch. According to market-intelligence firm Mintel, breakfast has become the hottest area of competition in the foodservice industry, with restaurants adding more than 460 new breakfast items to menus in 2009 – more than in 2007 or 2008, respectively. And while diners seem to be spending less on breakfast than in the past, Mintel forecasts the market will pick up speed in 2011 and expand by 13 percent from 2009 to 2014.

Anticipating the coming growth for breakfast food all day long, the newest Snooze restaurant will open this month at 144 W. Mountain Ave. in Fort Collins, right across the street from La Creperie.

Comings and goings

The drama attending the tax-induced closing of Schmidt’s Bakery and Delicatessen in Greeley followed quickly by the Loveland location – which reopened in time for Easter – has been well documented. These are hard times for restaurants. Keeping both the lights on and sales taxes flowing to the state’s coffers is becoming more difficult. Plank in Fort Collins did not pass the tax buck and was shut down.

With any luck, Harry Schmidt and the cities of Greeley and Loveland will come up with a plan that will keep Northern Colorado in stollens and kuchens well into the future. Otherwise, it’s off to Andrea’s Homestead Cafe in Lyons to satisfy that craving for gewurzkucken.

Sometimes good news arrives quietly when good cooking, good planning and a great concept converge. This spring, Tom Stoner will open a new Spoons, Soups & Salads at Harmony and Timberline roads in Fort Collins.

“It has been a slow process,” he said. “We have been looking to expand to the Harmony corridor, and now the time is right. I have watched the traffic that comes in and out of the Starbucks next door. There will be no problem for us being busy.”

Stoner, with business partner Martin Dickey, opened the first Spoons in the Northern Hotel in 2003. Next stop was Campus West on Elizabeth Street. Then in a canny move in 2005, Stoner contracted with Colorado State University to create a commissary kitchen,  serve meals in one of the dorms and have a presence in the Lory Student Center food court. With a big central kitchen, Stoner was able to eliminate the need to maintain a kitchen in each location while controlling the quality of the offerings and keeping the batches small.

And then he waited. The menu expanded and the Campus West location expanded, but the economy looked wrong for opening a new location. Now the Harmony corridor is ready.

Stoner noted that too often a good chef, eager to have a place of his or her own, forgets the business basics and fails not in the kitchen but in the office. But good things happen when a graduate of the Culinary Institute of America brings both talent and business savvy to the restaurant scene. Good food; no drama.

Guilt-free carnivorous consumption

For those who harbor a little guilt about consuming huge amounts of juicy meats fresh off the rotisserie, here is an opportunity to eat large and do good. For the month of April, Rodizio Grill in Fort Collins will donate a portion of its proceeds to Project Self-Sufficiency, a local, nonprofit organization that helps parents and families achieve economic independence from community and government assistance. Bon appetite!

Jane Albritton is a contributing writer for the Northern Colorado Business Report. Her monthly column features restaurant and hospitality industry news. She can be contacted at jane@tigerworks.com.

Health-care reform has been signed into federal law, and although no one knows exactly how it will affect the social fabric, the National Restaurant Association, for one, remains cautious. Its official position, according to a March 19 memo, was that the bill would have a “severe negative impact on restaurant businesses… (and) would increase costs and impose extremely onerous administrative burdens throughout the industry.”

These worries appear to stem from the industry’s demographics: It is dominated by seasonal, small businesses that employ a high proportion of young and part-time workers.

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