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How restaurants can survive in a stay-at-home era

At the Fast Company Innovation Festival, the founders of Milk Bar, Alinea, and Sweetgreen talk about how they’ve weathered the COVID-19 crisis.

How restaurants can survive in a stay-at-home era
[Image: Vadmary/iStock; hkeita/iStock]
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Every industry has been impacted by COVID-19, but few have been more affected—or devastated—than the nation’s restaurants. On Monday, Nick Kokonas, the restaurateur behind Chicago’s Alinea and reservations platform Tock spoke with Milk Bar founder and CEO Christina Tosi and Sweetgreen cofounder and CEO Jonathan Neman about how they’ve managed to stay afloat—and even thrive—in a stay-at-home era.

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Kokonas recalled realizing the crisis that was about to hit the U.S. restaurant industry when he saw Tock reservations bottom out across the globe in early March. “We could see the reservations falling in Asia, then in Italy, then on the West Coast,” he says. He quickly launched Alinea To Go, a high-end pickup food service powered by his Tock platform. “We were not going to shut down or wait for the cavalry to arrive. We switched our restaurants from serving Michelin-starred meals to comfort food in five days, and a week later we were serving over 1,000 people.”

Soon after, he created Tock To Go, which manages pickup and delivery orders for restaurants—and charges a much lower rate than other delivery platforms. Tock takes 3% on orders and integrates with DoorDash and Postmates for last-mile delivery, but the $5 to $10 delivery charge goes to the consumer, keeping costs to restaurants low. Kokonas said that Tock has now doubled the number of restaurants on its platform to more than 6,000 and signed on places that previously didn’t offer carryout, such as steak houses.

The company now has a deal with the city of Chicago to offer its platform free for six months to restaurants and bars in low-income neighborhoods, an effort to help stabilize local businesses. 

Milk Bar has 18 stores around the country and a well-established e-commerce platform, which sells Tosi’s famous Crack Pie and Compost Cookies. Tosi said that when COVID-19 hit, online demand grew for Milk Bar products as people started sending care packages to colleagues, friends, and family members around the country.

The company also launched a consumer packaged goods line during the pandemic. In April, it began selling soft-baked Milk Bar cookies and cake truffles in Whole Foods stores and just announced that it’s going into Target. “Our two-channel revenue business is now a three-channel or omni-channel business,” Tosi said. “It’s evolving.”

Fast-casual salad chain Sweetgreen, which rose to popularity as the antidote to sad office lunches, saw its revenue plummet in March as workers were stuck at home. The company had been pinning its growth to its innovative office-lunch delivery program, called Outpost, which delivered lunches in bulk to office buildings around the country. “We started the year flying; we were opening over 50 new Outposts a week and 20 new locations,” Neman said. “Come March 13, the business went off a cliff with the rest of the restaurant industry.”

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The company, which already had a strong digital presence, was able to claw its way back by moving up the launch of new offerings. Realizing that many customers were ordering at dinnertime, Sweetgreen pushed out “Plates”—warm meals designed for families to eat together—which previously had been scheduled to roll out in 2021. It also introduced a series of curated menus in collaboration with chefs such as Kwame Onwuachi, Danny Bowien, and Missy Robbins. 

Despite Sweetgreen’s success, Neman said that until workers return to their offices and cities regain their steam, the industry will continue to suffer. One thing is certain: Forced to find new ways to reach diners through digital platforms, takeout and delivery, and even grocery aisles, restaurants will never be the same again.