Bypassing the Bubble

How Some Austin Restaurateurs are Thriving in a Less Than Stable Market

 

The last handful of years has been challenging for many local restaurateurs. Crippling factors such as skyrocketing rents, a scarce labor force and increased competition—particularly from national chains with deep pockets—have resulted in an average of four restaurant closures to five-and-a-half openings per month last year alone. While whispers of an imminent bubble burst grow louder, hopeful new eateries continue to pop up all over town to an unknown fate. Some restaurants, though—both new and not so new—seem to have bypassed the bubble altogether. How are they doing it? 

Even with the popularity of dining out, most agree that the saturation of our market requires almost perfect execution and a dash of innovation to succeed. Diners are demanding more, and many Austin restaurants are differentiating themselves by using premium ingredients, finding creative ways to staff their kitchens and diversifying their offerings. In 2005, Patrick and Kathy Terry—owners of popular P. Terry’s Burger Stand—saw an opportunity to fill a gap in the fast-food burger market with a higher-quality product. “Anybody can sell a high-quality hamburger,” says Patrick. “And anyone can sell a $2.50 hamburger. But the trick is selling a high-quality hamburger for $2.50. That’s our niche.” 

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Employee satisfaction is a big part of P. Terry’s success, as well—all employees are paid a minimum of $10 per hour. “Once we get an employee and we feel we have a match, nobody leaves,” says Patrick. “We have scores of employees who’ve been with us for more than eight years because we pay better and treat people with respect.” Eleven years later, P. Terry’s has opened its 14th location and is eyeing new spots on the I-35 corridor outside of Austin. 

Sharon Mays believes so deeply in this movement of customersgravitating to better-quality food that’s also quick and affordable, that she’s resurrected her drive-thru salad shop, Baby Greens, which was shuttered in 2009. “When I first opened Baby Greens, everyone thought the idea of a salad restaurant was crazy,” says Mays. “Now, there are a number of salad-focused restaurants; that validates that if you make healthy food easy and accessible, people will eat it.”

With an update to the menu and a strong focus on customer service, Mays thinks Baby Greens has a unique offering compared to other salad places. And like the Terrys, Mays is investing in employees by paying higher wages than her competition. “We want Baby Greens to be a happy place,” says Mays. “We serve happiness in the form of a salad.”

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ELM Restaurant Group (24 Diner, Easy Tiger, Irene’s and Italic) has big plans for expansion in 2017 with a new 24 Diner at The Domain, the Cookbook Café at the new flagship Austin Central Library and two new Easy Tigers, one at The Linc (formerly Lincoln Village) and the other at the upcoming Fareground at One Eleven food hall. Executive Chef Drew Curren knew that growth wouldn’t be possible, though, if he couldn’t find enough line cooks to staff the kitchens. “When you put out an ad for sous-chef, executive chef or general manager, you get a lot of hits,” he says. “But the real trouble is line cooks…anything that’s in the entry level—$10 to $14 per hour.” 

But ELM got creative and asked the local Auguste Escoffier School of Culinary Arts to help create a labor pipeline for the growing restaurant group. Curren gave the school a list of skills they need from their cooks; instructors identify candidates who excel in those areas; and selected students receive a scholarship for their knives and a six-month paid externship at one of ELM’s restaurants. “Hopefully, the student comes in, has a good experience and sees that if they excel as a line cook, they can get a raise and move up quickly in our company,” says Curren. “They can make a lateral move to a different concept if they want to learn something new, and we’re giving them a chance to grow and make more money.”

Creating revenue opportunities beyond the restaurant door also helps attract new customers and shore up the bottom line. P. Terry’s partnered with Whole Foods Market to sell their popular veggie burger at 36 locations, and even created an exclusive vegan burger for the grocer. “We now have customers in cities where we don’t have a storefront because of Whole Foods,” says Patrick. “If we expand to one of those locations later, people will already know who we are.”

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Eric Silverstein, owner of Burnet Road hot spot The Peached Tortilla, diversified his business by adding a 2,500-square-foot event venue to his catering facility. After a few months, the Peached Social House was already paying off. “I’ve always been intrigued by the event-space business,” says Silverstein. “It’s pretty low overhead—an event manager, utilities and marketing. We have a catering license and a liquor license, so it was easy to add an incremental layer of revenue.”

Quality Seafood Market, an Austin institution for almost 80 years, has weathered the dips and bumps in the industry by offering a three-tiered combination of wholesale, retail and restaurant sales. Their relationship with chefs and generations of customers has created a steady foundation. “We have families who have been coming here for four or five generations,” says owner Carol Huntsberger. “Customers always tell me that their grandmother used to bring them here and that creates a high expectation for us. Everyone else is trying to do something different, but we are just trying to excel at doing the same thing.”

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Catering and partnering with delivery services have helped fuel the growth of Chi’Lantro from one food truck to five brick-and-mortar shops around town. The local chain is now one of the top choices on Uber Eats, Favor and Amazon’s takeout delivery—accounting for more than 10,000 orders in 2016. “We’re still in the growing phase and don’t have the resources to provide delivery on our own,” says founder Jae Kim. “We’ve created strong relationships with the delivery companies, but the main goal is to provide great service to our current customers and attract new customers to our restaurants.”

This year may see more shakeups in the Austin restaurant scene, but these and other local culinary entrepreneurs continue to prove that “thinking outside the to-go box” with innovation and diversification helps them stay afloat in our uncertain restaurant tide.

By Kristi Willis • Photography by Dustin Meyer