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Planning for a new normal

Restaurants and breweries ponder: whenever they reopen, will it ever be the same?

By Kaleb M. Roedel kroedel@nevadanewsgroup.com

RENO — A few weeks ago, Brewer’s Cabinet owners Zachary Cage, Michael Connolly and Chris Kahl were standing inside their brewery in west Reno, canning beer to be shipped to grocery stores.

A vendor walked in to take a respite from his workday. Being on break, he cracked open a beer — releasing that unmistakable snap and hiss into the air.

“He said, ‘Man, it feels good to stand in a room with other people and drink a beer,’” Cage recalled in a phone interview this week with the Northern Nevada Business Weekly. “That’s the sentiment we share. It’s surreal not being able to go to the bars and restaurants we used to go to, and not being able to run the bars and restaurants we used to run.”

Now more than a month into the COVID-19 pandemic, which has shut down food and beverage businesses in every corner of the globe, many establishments in Northern Nevada are grappling with the unknown of when — or, for some, if — they will be able to reopen their doors. 

“We laid off over 200 people … Our revenue went from $135,000 a week between all the restaurants to next to nothing,” — Mark Estee, owner, The Union and Cucina Lupo in Carson City; Overland Restaurant & Pub in Gardnerville

SEARCHING FOR REVENUE STREAMS

These uncertain times are why Colin Smith, owner and chef of Roundabout Grill and Roundabout Catering in Reno, wasted no time searching for ways to keep his cash flow at more than just a trickle.

“I knew early on that we were f–ked if we didn’t do something aggressive,” Smith told the NNBW. “We knew it was going to be something that was going to gut our industry.”

Gutting, indeed. Back on March 18, the National Restaurant Association estimated the restaurant industry would lose $225 billion and shed between 5 to 7 million jobs in the coming three months due to COVID-19.

Forced to rely on curbside pickup and delivery orders, restaurants are swallowing hard as they try to survive on takeout as long as possible. Gift cards help, too, but many customers may be buying them knowing there’s no guarantee the restaurant will be around long enough to use it.

“I wasn’t OK with shutting my business down and saying, ‘sorry, poor us — poor pandemic,’” Smith said. “So, we went after things aggressively from the get-go, and we said how do we not go under? How do we not lose what we’ve built the last 14 years?”

With that, Smith leaned into the diversification of his company, which already includes: a downtown Reno restaurant, an outpost at Tesla’s Gigafactory in Storey County, meal prep, boxed lunches, catering and venue rentals.

With most of those revenue streams completely cut off or drying up, Smith found a new source through a partnership with Renown Health.

Roundabout’s culinary team, starting in mid-April, took over Renown Regional Medical Center’s cafeteria, serving about 1,600 meals a day for hospital employees.

This, Smith said, has allowed Renown to shift their cafeteria workers to serving and preparing meals for the potentially increasing number of hospitalized patients.

“Had Renown not come along, I would have had to make some more difficult decisions,” Smith admitted, adding that he’s retained all but roughly a dozen of his 130-person staff throughout the crisis.

EMPLOYEE EFFECT

That hasn’t been the case for all restaurant owners.

“We laid off over 200 people,” said Mark Estee, chef and owner of five regional restaurants, including Liberty Food & Wine Exchange and chez louie in Reno, The Union and Cucina Lupo in Carson City, and Overland Restaurant & Pub in Gardnerville. “We’ve tried to help find everybody find jobs and helped all of them get on unemployment benefits. And we stay in contact weekly to let them know we’re here if they need anything.”

Cage is in the same boat. Brewer’s Cabinet — which has dialed back its brewing cycles by 75-80% — has laid off 68 people, retaining only two.

“On the human side of things, I’m really concerned about some of my employees,” he said. “A lot of food and beverage employees live paycheck to paycheck, and as this drags on, I don’t know how some of them are going to make it. We’re doing everything we can to plug them into different resources, but folks are starting to hurt.”

For Estee, a big challenge has been the fact that all of his restaurants are sit-down eateries; meaning, they traditionally didn’t receive a lot of to-go orders.

“Our revenue went from $135,000 a week between all the restaurants to next to nothing,” he said. “We’ve been able to cobble back together maybe 10% of that with curbside and everything, but we’re down 90% of revenue. I don’t think anybody’s getting rich on to-go.

“Restaurants like ours, we’ve had to really pivot hard,” continued Estee, noting his businesses also recently added delivery. “We’re trying to be innovative, but at the same time respectful of the fact we’re in a pandemic.”

To that end, four of Estee’s restaurants are open just three days a week with shortened hours. Meanwhile, chez louie, located in the closed Nevada Museum of Art near downtown Reno, is not operating.

“We feel that limits contact for everyone involved,” Estee said of shortening his restaurants’ days and hours. “It allows us to really focus on sanitation and cleaning and whatever comes our way. And it gives everyone a chance to go through and feel the feelings of the quarantine, be with their families, but still put a little scratch in their pockets.”

CUSTOMER SUPPORT AND GIVING BACK

Customers are trying to do their part, too, said Michael Tragash, community manager at Yelp in Reno. Once COVID-19 took hold of greater Reno-Sparks, Tragash started a running list of restaurants in the region offering takeout, which has grown to nearly 200 businesses.

On April 11, Yelp hosted a national social-media campaign called “Big Night In,” which locally drove more than 300 diners to support local restaurants that night, he noted.

“Our Yelp Community hasn’t slowed one bit when it comes to supporting our local businesses through the COVID-19 crisis, and reading their reviews and seeing their photos that highlight the extra measures our local restaurants are taking is incredibly inspiring,” Tragash said. “My feed has been consistently flooded with unique at-home dining experiences and date nights, smiling faces and families, and posts filled with expressions of gratitude from local business owners.”

Restaurants are trying to show their gratitude through more than just social media posts. Indian Kabab & Curry opened their kitchen and served 1,000 free meals to those in need. Midtown Eats has delivered hundreds of meals to children. Estee’s Liberty Food & Wine Exchange helped Sysco and Fresh Point hand out more than 1,600 pounds of food to hospitality workers displaced during the pandemic.

And nearly 20 local restaurants are supporting Feed Our Heroes, a community effort to feed frontline healthcare workers and first responders.

“I’m glad people come and support us, but at the same time, our job is to support the people,” Estee said. “We’re really trying to find what little can we do to help the community, and what little we can do to make some money to pay the people that we still have working.”

Smith is also making efforts to not only help feed the community, but also give back to his fellow restaurant owners. At the end Roundabout’s contract with Renown, he said the company will be donating a to-be-determined percentage back, in cash, to local restaurants that need help restarting following the pandemic.

“We thought it’d be good to be able to reach out to a few local people and say, here’s five grand or whatever the number is,” he said. “If we can do something kind for people that are struggling and help our friends in the industry step up and afford groceries, we’re going to try that.”

THE NEW NORMAL?

The unanswerable questions, though, are: 1. When will restaurants, bars, taprooms and more open back up? 2. What will that look like? 3. What will consumer behavior be like?

Bryan Holloway, owner and head brewer of Reno-based Pigeon Head Brewery, said he’s preparing for the shutdown to last until at least the end of May, if not longer.

“I envision the lifting of the shutdown to happen slowly,” he said. “The good news is, I don’t think people are going to stop drinking beer any time soon. If anything, we are drinking more of it. I know I am.”

Holloway said the pandemic has not only dropped Pigeon Head Brewery’s revenue 60-70% compared to last year, it’s also thrown a wrench in their plans of growing and expanding this summer.

“That may need to be put off until next year now,” he added.

Cage said he expects new restrictions to be put in place by Nevada officials after businesses are allowed to reopen, such as new capacity restraints, social distancing requirements, and possibly even temperature checks at the front door.

After all, on April 14, neighboring California announced a set of policies to be enacted at restaurants once the state’s stay-at-home orders are lifted, including taking customer temperatures at the door, requiring servers to wear masks and gloves, reducing the number of tables by 50%, and providing disposable menus.

Whether Nevada follows suit remains to be seen. Cage, however, is mentally prepared for that being a new reality.

“I don’t know what the new normal looks like,” Cage said. “I’d have to think at some point that is going to have an impact on the customer. If it’s fearful or inconvenient to have your temperature checked just to go have a beer at a bar, you might just opt to stay home.

“There will almost certainly be deep macro-economic impacts that could have an effect on consumer behavior for years to come.”