Monday, April 30, 2018

Early Indications April 2018: Food as economic engine

It’s tough to get very excited about Silicon Valley these days. Very few startups sound as though they’re focused on solving important problems; as one former student told me last month just as she was moving from the Bay Area to Toronto, “I’m tired of hearing that the 30th food delivery app is going to change the world.” Three of the big four companies (Amazon, Google, and Facebook) are running unregulated large-scale behavioral experiments on people as individuals, and the fourth - Apple - is striving to create multiple levels of lock-in to their platform, albeit with less distressing privacy policies. It’s unclear whether either Tesla or Uber can ever turn a profit (and no, they aren’t “just like Amazon in growth mode”), Theranos was outed as complete fraud and potentially mass medical malpractice, and San Francisco itself is a model for everything wrong with U.S. housing policy and the not-unrelated homeless problem that has emerged. There are solid performers, to be sure: Adobe, Cisco, and Salesforce for starters, and Autodesk is doing some interesting things in its markets, which by definition are niches. 

Instead of tech, let’s look at a very different kind of economic engine: restaurants. I’ve been thinking about this for a long time, inspired first by Melissa Kelly and her amazing Maine restaurant, Primo. (You can read more here) Kelly has built a farm-to-table restaurant in Rockland, formerly a major fishing port, that is now surrounded by a working farm: everything from garlic to pigs are raised then served on site. In addition, Kelly is quick to credit her suppliers. She is not alone in bringing farm-to-table to the Pine Tree state (San Hayward at Fore Street in Portland, for one example, has been at the game longer) but given the economics of mid-coast Maine, it took a while to convince growers to raise exotic potatoes, greens, and herbs. 

Now that success stories like Fore Street and Primo have led the way, other chefs are broadening their menus given the ever-increasing variety and high quality of the available ingredients. The good food from those chefs draws foodie tourists, who contribute to that backbone of the Maine economy. It’s a classic feedback loop. Rockland is somewhat off the beaten path: nobody will just be in the neighborhood, yet the restaurant is jam-packed, and not just in summer. As with other super-talented chefs, Kelly has made her restaurant a destination, and I don’t think it’s pure coincidence that the town has rebounded over the years Primo has thrived as new galleries, bakeries, and shops have moved in.

More recently, I saw a very different yet similarly inspiring story unfold, not on the coast but in the steeliest part of Pittsburgh. Braddock, PA is home to a surviving US Steel mill, shooting fire into the sky right across the street from a vacated Chevrolet dealership (think BelAirs rather than minivans). Chef Kevin Sousa opened a new-American restaurant called Superior Motors there, and after a rocky road to launch, it was just named a Food and Wine Restaurant of the Year. 

Braddock is a town not just in decline, but flat on the canvas. Like Detroit, much housing stock had to be leveled. The tax base is tiny. Sousa grew up nearly in a similarly hollowed-out steel town and had had culinary successes before (also in less-than-pristine neighborhoods), but wanted to do something more meaningful. His pitch for a community-centered garden + cooking school + restaurant set a Kickstarter record for the category, raising more than $300,000 in about a month. Like many (most?) talented chefs, Sousa did not have a strong business background and was found after the Kickstarter closed to owe previous creditors. The renovations to the Chevy dealership (which is being occupied rent-free) cost more than expected. Sorting out past debts and obtaining current funding took several years, but the pieces and more importantly the team came together: front-of-house, kitchen, and overall investor and business strategy are each handled by domain experts. (See more details here)

Sousa also had help from the outside. Two Carnegie Mellon graduates opened a wildly successful microbrewery called Brew Gentlemen down the street. An Italian bar-restaurant, a jewelry artisan, a coffee shop, and a Mexican restaurant launched out of a food truck are all opening in Braddock. Against the backdrop of curiosity, concern, high expectations, and skepticism, Superior Motors started serving meals last year. A significant percentage of hosts, waitstaff, and cooks come from Braddock, and town residents (that include Sousa himself) get a 50% discount on dinner 18 times a year. The community garden is still coming up to speed, but the community oven in the parking lot next to the building is turning out amazing looking pizzas (pictures here) under the Superior Motors brand extension Parts & Service.

This isn’t a restaurant review, but the food is engaging and delicious. The bar turns out highly capable and original cocktails and whoever put a red Texas blend on the wine list is doing an inspired job of provisioning. The view out the front window of the working steel mill (at night especially) is dramatic. Hearing bits of peoples’ stories — our waiter and the service manager are both Pittsburgh natives who left New York after working at the highly regarded WD-50 — and seeing a white-tablecloth restaurant actively hiring and serving its neighbors were even more engaging. Our water was poured by a young man who interns in the pastry kitchen as part of the chef apprentice program. (Apparently this job-training idea is getting traction in other towns. Here’s a story out of Louisville.) We got reservations literally the day the Food & Wine story came out; I imagine Superior Motors will be a tough ticket this summer.

I’ll close by linking to a book I haven’t read yet. James and Deb Fallows have looked long and hard at the U.S. at the grassroots level, and just published a new book about what they saw. For all that is wrong with Washington (and much of it has been wrong for a long time), this is a great nation with everyday people doing amazing things, often on a small stage: a restaurant, a classroom, a park. Stories like those of Primo and Superior Motors, of Brew Gentlemen and Portogallo Peppers N’at, reinforce what I take the Fallows’ point to be: effective citizen leadership and local government can make inspiring things happen in the so-called flyover zone. Immigrants are contributing, skills are being imparted, elders are being cared for, neighborhoods are evolving. (Good beer is also being brewed: I referred to the Fallows' observations in this regard about two years ago.) In a time when I confess to sometimes mistaking the forest for the trees, it bears mentioning that there is much good to celebrate, often in the most unlikely places. It’s also important to acknowledge that nobody gets everything right the first time: a key step in the Superior Motors story was when an investor applied Silicon Valley logic, asking Sousa what he learned from his financial missteps and getting him the right team to address them rather than forcing him out of the business. Once we learn — better — how to learn from failure (and allow others to do so), collective wisdom will increase. 

Our Towns: A 100,000-mile Journey into the Heart of America will officially be published next week.