April 2, 2025 • 32 mins
PECO’s Brian Sheehan sits down for Part 2 with Sri Divel, the Principal of The Culinary CMO, to talk about what's new and exciting, affecting the restaurant world! Sri’s profound insights and expertise shine through—showcasing the incredible connection between creativity and strategy in the culinary world. Catch the full episode now and be inspired!
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Episode Transcript
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Brian Sheehan (00:05):
Welcome to Retail Intel, the podcast where we
dive deep into the dynamic worldof commercial real estate.
I'm your host, brian Sheehan,and I'm thrilled to be your
guide on this journey throughthe bustling streets of retail,
the aisles of shopping centersand the world of property
investment.
With me today I have Sri Devel,the founder and principal at
(00:28):
the Culinary CMO.
This is Sri's second time onthe show and we're thrilled to
have her back.
Sri began her career as aclassically trained chef,
graduating from the celebratedArt Institutes of California,
and has achieved a level onesommelier rank with the Court of
Master Sommeliers.
Sri welcome, how have you been?
Sri Devel (00:50):
Thank you, I've been so good.
How are you?
Brian Sheehan (00:53):
I'm great.
You know it's been aninteresting time at Pico.
There's been a lot of growth,there's obviously a lot of
activity in the restaurantsector and that was one reason I
was really excited to have youcome back on Retail Intel to
talk about the kinds of thingsthat you've been seeing.
But before we get there, itsounds like you've got a new
(01:13):
partnership kind of underway orin the works and I wondered if
you want to talk about that fora second.
Sri Devel (01:19):
Yeah, absolutely.
We have some really greatthings going on at the Culinary
CMO.
We have just been really ableto hit a niche with restaurants
and it's just been like had youtold me 10 years ago that this
could be possible like it's justlike a dream.
I get to work with theseincredible chefs, I get to work
with these incredible teams andreally just help tell their
story and it's just incredible.
(01:41):
And I had a really fun chancemeeting and FSR at conference
that I was speaking at.
It was QSR and FSR and I had agreat chance meeting with one of
the owners of archway, and sothey're one of the leading print
houses in restaurant and retailspace, for really both, and so
they were really growing theirculinary side of print work,
(02:01):
which is so funny because it'syou don't think of us as doing a
lot of print, but we actuallyreally do and they have like a
ton of solutions, and so it wasreally cool.
We kind of talked for a littlebit and then it was one of those
things where like yes, thisabsolutely just works, so I'm
able to offer my clients areally sophisticated print
(02:22):
platform, and so that's justreally cool to offer.
Because I love to work withowner operators.
I also represent a ton offranchise orders and franchisees
, but it's really fun to be ableto offer them solutions.
They work with a lot of thetitans in the industry, like
think Starbucks, young brands,like all these huge big brands.
So if I'm able to offersometimes smaller you know,
(02:43):
smaller units and that type ofstuff, the same kind of
solutions and dashboards andthose types of things, it's
really cool.
It's really fun to see, becausemy goal always just with the
Culinary CMO, was to always helpand offer assistance in any way
I can for restaurants and thiswas one of them, so it was
really exciting.
It was a really coolpartnership.
We've had a lot of fun.
I've been working with them forabout four to five months and
(03:04):
they have a huge print house inGeorgia and so I never knew I
loved the South as much as I do,but Atlanta is like I'm like
yes, like the culinary there.
It's just amazing therestaurant.
So it's been fun.
It's been a great partnership.
We've been able to offer a lotof solutions for a lot of my
clients.
So I think it's a really goodsymbiotic partnership that I
never knew I needed.
Brian Sheehan (03:24):
Oh, that's great.
You know, it sounds like itcame about really organically
and yeah, yeah.
Then that kind of brings me tomy next question, which is you
know there's been a lot that'shappened since we spoke last
year in the industry and I'mcurious, kind of what trends
you're seeing, you know, thatare really affecting your
partners.
Sri Devel (03:43):
Yeah, absolutely, I think the biggest you know that
are really affecting yourpartners.
Yeah, absolutely.
I think the biggest you know,like the elephant in the room,
of course is food costs.
Everyone from grocery all theway up to restaurants.
It's just something that'shappened and we've always felt
it.
We always try to control thecontrollables, and so food cost
is always a controllable that wetry to control, but, man, it's
getting difficult.
So I think that's the elephantin the room.
(04:05):
It's just our costs are rising,so, unfortunately, we have to
roll that over to our guests.
So we hear it.
I think that's one of the bigthings that I've seen in trends.
So kind of stemming from thatis, you know, we've always been
very smart at cross utilizationor using the whole animal or
vegetable or those types ofthings, but I do think that our
menus are getting smaller andmore precise, which actually
(04:26):
helps us from bringing in toomany products that don't get
sold or we have minimal waste.
So I think smaller menus, moreprecise menus, more focused
menus on what the restaurantdoes well, and so they'll kind
of lean into that, which is whatI'm seeing.
Also, probably in 2025, we'llsee like a huge revival of the
martini, which is really funnybecause it's like, as a martini
(04:52):
drinker, I'm like wait, wheredid they go?
Remember about 1520 years ago?
I mean, that was everywhere.
Brian Sheehan (04:56):
When.
Sri Devel (04:56):
I was a server, it was like martini night, that was
the night right, like you knewthat you can make a ton of tips
on that.
So martinis are going to bemaking a big comeback and also,
you kind of see, like in Vegasalready, in those types of
things like the supper clubs,like a little bit lean into a
little bit more leisurely, yousee those big overstuffed booths
you see kind of like supperclubs or something like to be a
part of.
So it's like memberships, thattype of stuff.
We're seeing a huge comeback ofthat and I just think it's
(05:18):
really cool and I think just thestyle it's a little bit like a
nod to not the olden days, butyou know, it's like Frank
Sinatra era done really, reallywell and done that to a modern
style.
So I'm really excited to seethat.
I've seen that and a couple ofthe build outs that we're doing
right now is really kind of alittle bit of vintage, a little
bit of modern, but just oh socool.
So lots of things in theindustry happening.
(05:39):
That's fascinating.
So what's bringing the martiniback?
(05:59):
You read so much and it seemslike my experience has been
people are consuming back there.
I think they just did a hugelayoff and one of them, and so
it's just, the drinking is goingdown, which is a good thing.
That also makes way for nonalcoholic beverages.
I don't know if you'veexperienced it as well, but you
know the non alcoholic beveragesright now they're using spirits
that have no alcohol they'rezero proof spirits and then
(06:21):
they're including those in fullhandcrafted cocktails.
So it's really cool.
So you can sit down with yourfriend and you can order the
martini.
And then I can order a hibiscuscooler, but you don't
necessarily know that it doesn'thave booze in it.
So I can drink with you and Ican be there with you.
It's kind of also enjoying thesober.
Curious movement is huge andthat's coming in really big.
(06:41):
I think wine you know wine willalways have its moment.
It's such like a food and wineright.
It's such like a partnershipthat will never go away.
But I think wine had a hugeresurgence of, you know, making
their way and everyone wanted tobe more educated than wine, and
I think it's just time.
Remember the vanilla vodkas orthe flavors vodkas?
Had their time at one point, sonow I just think it's like the
(07:01):
true and classic martinis arecoming back.
I think it does pay a littlebit into that you know kind of
vintage era that a lot of therestaurants are going in, and so
I just think it's on its wayback, but people are definitely
drinking less Absolutely.
So I think those who will bedrinking will be partaking in
martinis.
It's coming back.
Brian Sheehan (07:20):
And it's just a part of the same trend that is
bringing the supper club back.
Talk what's what's going onwith supper clubs?
Sri Devel (07:27):
I think so.
Yeah, I just see that a lot.
Vegas did it a couple of yearsago and it's just kind of that
more loungy, relaxed environment.
It's not like you know country.
It's very modern.
It's very like vintage lightingwith big overstuffed booths.
It's kind of like a way ofservice.
So it's definitely fine tuningservice.
People aren't going out as muchand so it's really when they go
(07:50):
out, they expect an exceptionalexperience and something that
our restaurants can offer tothem as an exceptional dining
experience.
That's really what we strivefor every day.
So by kind of creating likethis incredible service
environment, I think it's justsomething really fun.
I think it's just somethingreally fun.
I think it's going to be cool.
It's definitely a design themetoo.
Even some quick service aregoing more vintage in style,
(08:11):
which I love.
But I just do like a huge andwhen I say vintage I mean like
vintage elements.
It's not everything it's.
You know.
They're kind of just playingback to what people are
comfortable in and gettingpeople to kind of relax a little
bit longer for each experience,because we know you're going
out less.
Brian Sheehan (08:26):
You see it in the fabrics, the materials they use
, how they decorate the musickind of everywhere or just
little moments in restaurants.
Sri Devel (08:34):
Yeah, colors, textiles, fabrics, it's a lot of
deep, richer colors.
Black has had its moment inrestaurants for a long time now,
especially barbecue and thosetypes of things, which is rad,
so to see like elements.
You know, for so long black wasonly like an outline and now
it's like the color ofrestaurants and it's really cool
.
So the darker, royal colors,richer colors, all of those
(08:55):
things are really making acomeback and I'm here for it.
Brian Sheehan (08:59):
And to your point .
So vintage is about making youfeel more comfortable.
You spend longer.
Maybe you spend more whileyou're there.
Sri Devel (09:08):
Yeah, you're going out less, and that's just a
proven fact.
People are going out less rightnow.
So it's one of those thingsthat, okay, we want to be able
to be your choice when you do goout.
And how do you do that?
It's the way we make you feel.
So we make you feel comfortable, we make you feel non-rushed,
we make you feel like you canstay with us.
We don't have a 60 minute timelimit like those times during
(09:29):
COVID and all those things.
You know like we're.
The pendulum has swung so farthe other way.
Come and sit with us, chat withus a while.
You know your server knows yourname, kind of the cheers bar
that everyone wants.
I kind of feel like that's youknow you pull up and you know
the bartender, she knows yourdrink and it's definitely going
to return to that.
I'm really excited for it.
It's very personable, it'sbringing personality back to
(09:51):
service and it didn't goanywhere.
But it's one of those thingsthat people are leaning into.
It's you know it's.
We want to make you feel likeyou need to be with us on those
nights that you go out.
And so how do we do that?
We definitely create a brandaround making you feel
comfortable.
Brian Sheehan (10:04):
You talked earlier about some of the pain
points that restaurants areexperiencing.
One of those is cost.
What else are you seeing thatthey're struggling with?
Sri Devel (10:15):
Food cost is just one of the biggest challenges right
now and it's always somethingthat we've dealt with.
We always know that it's acommodity.
It's going to go up and down.
We know that if the Midwest hasa freeze, tomatoes and spinach
are going to go up.
We know that the farmers weredealing with a lack of water for
some time in California so itskyrocketed.
We're really lucky because ofyou know that the way that trade
(10:37):
goes and that type of stuff,that we really can get anything
from anywhere, Sometimes it justcomes at a cost and so some
restaurants are choosing justnot to do it.
You know they're not choosing todo the $600 case of avocados
anymore, so they may substitutewith something else or even
change a menu ingredient wherethe old school hospitality was
like at any cost, like someone'sgot to run out and go find
(10:58):
avocados or somebody's got to godo this to do that.
So now chefs are kind oflooking at their menu and
they're like, okay, well, wecan't offer this.
And some chefs are leaning inand saying, okay, well, we're
going to offer a superiorproduct, but the price has to be
adjusted, and so sometimesthere's a little bit of pushback
with that, but really again,what we're here to do is just
offer like an incredible diningexperience for guests who come
in.
But food costs is there.
(11:19):
It's always been there, butit's definitely a challenge
right now, I think, for wine.
There was like a glass shortagein Italy, I think, so a lot of
the wine that was coming out ofItaly had to be a little bit
more expensive or it was delayed, so a lot of our glass bottling
was an issue.
I think that's since beenresolved.
And then just kind of what wediscussed is people are just
going out less, and so it'sreally just being that top of
(11:39):
mind being that choice.
When people are going out, ourrestaurants need to be where you
want to go, and so that'sseveral different ways.
You know the culinary CMO.
We do the multi channelapproach.
So then the way anyone consumesmedia, you find us, and so
that's what we offer to ourrestaurant partners.
But when you do go out, we wantyou to think of us, and so it's
(12:00):
definitely a challenge rightnow and it's something that has
been for a bit.
You know, like the COVID era.
Everyone wants to forget andnobody wants to remember those
times, especially in therestaurant industry.
But yeah, I do feel like it'sjust a different set of
challenges.
People are more cautious ofspending money just because
things are so expensive rightnow.
Brian Sheehan (12:21):
And yet there's so much innovation, so many
exciting things happening in therestaurant industry.
I mean, it's one of the reasonsI love getting to talk to you
and you work with reallyinteresting fast growing brands
and I'm curious if there's somethings you know that they all
have in common, kind of what'shappening with those brands that
are growing quickly right now.
Sri Devel (12:41):
Yeah, absolutely.
I think the brands that areexpanding are thinking outside
the box.
So they're thinking, you know,maybe a different state or
they're thinking of expanding indifferent ways.
The best thing that you can dowhen you expand is just really
be true to who your brand is.
Don't try to be everything toeveryone, but also embrace the
community and do those types ofthings, which is so huge and
(13:03):
kind of knowing where you'regoing and what those people are
really into, right.
So I think identifying andlocating your best market is
probably the first one.
They're embracing communitiesthat are similar to where
they've had success in othercommunities or different cities
or different centers or thosetypes of things.
I think, especially whenworking with like a real estate
(13:24):
partner, it's really finding outthe demographics, the
psychographics, what peoplespend all those forgive me, I
don't know the name, but it'swhat real estate officials will
offer to like restaurant ownersLike, hey, this is, you know how
this center performs and Ithink, really taking a look at
that and diving in and then alsojust talking to other
restaurant partners around you,you know what is their successes
and what are those things.
(13:44):
You know restaurants are just areally risky business and so
it's always good to kind of hearwhat people are doing.
A lot of people who are buildingright now are taking over
second and third generationsites for obvious cost reasons.
Building material is insane,and so it's just one of those
things that I think they'rereally looking for prime
location, prime opportunities.
(14:05):
But then also, you know secondor third generation sites that
they can go.
Okay, well, you know, I know astove went in here because it's
already piped forward or plumbedforward or whatever.
So it's like I don't have to dothat and that's a $15,000
savings.
So I think people are reallylooking smart, especially those
smart operators.
I work with a team that is justprobably the best operators
I've ever seen and they're goingin.
You know they're like okay, wewant a second or third
(14:27):
generation site, we want thiscommunity.
They're partnering with theirrestaurant partner and they're
really getting some good resultswith they're going to go across
the country and they're reallyexcited.
We're really excited about thatopportunity because it just
seems like a perfect fit for usand it's just going to be
incredible.
Brian Sheehan (14:56):
Yeah, and adapt and fit, and earlier we talked
about a concept that's movingfrom California to the Carolinas
.
Maybe you can talk about somespecific ways they're doing that
.
Sri Devel (15:02):
Yeah, absolutely.
So they're keeping their unitsin California, so they're just
expanding and they selectedNorth Carolina.
So it's Mama's Comfort Food andCocktails.
They are so close to my heart.
I just absolutely love thatconcept.
It is just the best conceptwith the best comfort food.
And so they've had some wildsuccess in California and they
really are in growth mode rightnow.
So it's I'm really excited tosee them grow.
(15:24):
Those were the operators that Iwas talking about.
They are just the bestoperators I've seen.
They have just the greatestteam.
What they're going to be doingis taking one of their general
managers, who is actually fromVirginia, I believe, so she's
from the East Coast and she'sgoing to be moving to North
Carolina for their first unit.
They have South Carolinaalready signed, so there's just
(15:44):
like some really cool growthopportunities.
So they're going intocommunities.
They partnered with their realestate, you know, expert, and
they really found a location.
That's really great, and sowe're really excited about it.
And what we are doing is makingsure that the brand is our brand
and this is what we love.
This is how we've had success,and so really what we wanna do
(16:05):
is really lean into the branding.
So it's a really fun concept.
There's lots of bright colors,there's fun fonts.
We do like subtle littlerebrands every two years, which
is, we may introduce a new fontor a new style or a new
background or something likethat, and I know to the modern
person that seems super silly.
Okay, just change yourbackground.
(16:25):
But one of the things that wedo is we stay consistent.
So then you get brandrecognition and brand
recognition whether inCalifornia or North Carolina,
but to where we just really staytrue to the brand and it's a
fun brand.
So I think people are excited.
People are already excitedabout it through the press
releases and all the things thatwe've done.
I don't think they'll openuntil maybe June, but it's a
(16:46):
really cool concept that I thinkpeople will be really excited
about.
And one of the things thatthey've done is they've always
pretty much doubled down intocommunity.
They've always supported thehigh schools and any sort of
charity that is local to thecommunity.
We've donated over a milliondollars to the schools and the
education systems of thecommunities in which we support,
(17:08):
and that's something that'sreally true to both of the
owners is that they support thecommunities.
One of the owners is actuallymoving to North Carolina, so
he'll be there, so he's going tofully embrace it.
I think he had some ties thereprior.
So he's going to go back homeand he's going to bring the
concept with them and it's like.
It's a like soul food, countryfood.
It's just delicious, like a tonof comfort food and amazing
(17:32):
cocktails.
Brian Sheehan (17:34):
I mean a lot of great reasons to be looking at
the Carolinas for growth, and Iguess that kind of answers my
question.
He was moving home or they weremoving home and built this
concept in California Southerncomfort food.
Now they're going to take itback.
So if you went to Mama's inSouthern California, turn around
, end up backing the Carolinasand walked into a Mama's, it
(17:55):
would still look and feel kindof like the same place, right?
Sri Devel (17:58):
100%.
So, yeah, it's real, truecomfort food, and so they'll
take it nationwide.
I'm excited for their growthperiod right now.
It's really exciting.
Brian Sheehan (18:07):
Talk about, I guess, the importance of
community involvement.
The retailers and restaurateursthat I speak with that seem to
kind of outperform the size oftheir space in terms of sales.
You know, really do a good jobof that and it seems a little
bit like a secret sauce.
How do you do that effectively?
You know, how do you engageeffectively with your local
(18:30):
communities to build loyalty?
Sri Devel (18:33):
Absolutely so it's.
You know, loyalty also is bothways right.
So for your guests andcustomers to be loyal, they have
to be loyal, and so one of thethings that I see a lot of
restaurateurs do that it justisn't necessarily.
In my opinion, the right way todo it is they'll just kind of
spot check, like they'll justget like a banner and then okay,
well, we're up at the highschool, so we know one of the
(18:55):
things that Mamas Come for Foodand Cocktails does is they lean
in, and so it is.
You know, donations in ourindustry our margins are so
small, so to take the stancethat they are going to
contribute to the communities inwhich they serve, that's a big
deal and that's a huge financialcommitment, especially when
everyone is cutting back andeveryone is doing less right?
So what they do, they do justabout the opposite of spot check
(19:19):
.
So they actually, you knowauction baskets, and then
they're supporting the swim teamand then they're supporting the
baseball team.
It's not just one high school,it's all high schools.
They do a really amazingprogram called give back days,
and so the give back days areone of the things where a lot of
restaurants will do it.
But the way that mamas does itand so, consistently, it's a
really big deal, and so theyhave a really cool formula to
(19:40):
where they'll do it.
So it's 20% if you have lessthan 40 people and then it's 30%
if you have 50 or more.
So, really like, it's reallyupon the group to really get
their group there, but thenmamas will write the check.
So it's just one of thosethings.
We offer a space for them at nocost.
They can come in and eat anddine and then we donate like up
(20:02):
to 30% of their ticket back tothe group and it's just
something really cool.
But they do it and I would notbe exaggerating to say that they
do this 365 days a year.
And again, it's something thata lot of restaurants will just
be like oh my gosh, another giftcard.
Oh my gosh, another donation.
Oh my gosh, another charity.
It just starts to add up and,like I said, mama says donated a
(20:22):
million dollars and that's partof their business practice.
So they have that worked in.
But I hear so much from otherrestaurants that are just like I
.
You know, this is $300 for thismonth that we get hit up for.
Or, you know, you'll ask thecommunity involvement or
something like hey, can you giveme oh goodness, I forget what
it's called like a 501c3 orwhatever that form is or
(20:43):
something.
And they're like, oh well, wedon't have it.
And it's like, well, we do needthat to offer.
There's so many things, but Ido think that that is a huge
part of the concept.
Success not only great food,great service, amazing cocktails
, but also just the community,is something that they've really
always just dove into.
(21:03):
They have a second conceptcalled Dos Amigos Cantina, and
they do the exact same thing andit's just, that's packed.
You'll go in there and theyhave anywhere from 20 to 50
people who are there on acommunity engagement that they
have helped facilitate, likeMamas has helped facilitate.
It's just, it's really awesome,it's just really cool.
And I just don't see peopledoing it.
(21:23):
And a lot of times you get somepushback like, hey, we have
this great opportunity to be apart of this, and they're like
I'm sorry, I just don't have thecash for it.
And and I understand that too,I really really do Like, look,
our margins are so thin,especially now.
So I see a lot of peoplepulling back on donations or
just, you know, a communityinvolvement.
It's the exact opposite of whatMama's Comfort Food and
Cocktails do.
(21:43):
They do a really exceptionaljob at that.
Brian Sheehan (21:46):
It sounds like it can't be a part-time thing.
Don't look at it as a part-timething.
Sri Devel (21:51):
Yeah, don't spot check.
Brian Sheehan (21:52):
And also there's a little bit of faith and trust
that if we give until it hurts,it's going to come back to us.
Sri Devel (21:58):
Yeah, definitely.
Brian Sheehan (22:00):
That's fascinating.
Sri Devel (22:02):
It's got to be the thought process, it's got to be
like the mission of you know.
It's got to be just a part ofyour everyday business.
And that's what they do.
It's again, I see it when youspot check and you buy this
banner and you buy this quarterpage ad and the football thing,
then it's like it really doeshave to be accumulation, not
just a one-off.
Brian Sheehan (22:19):
The economics, as you mentioned, are so important
in the restaurant industry andthis sounds like kind of a
relatively smaller group,although they've got multiple
locations, different concepts.
I wonder if you could talkabout how single smaller unit
operators that don't have thebuying power of the Starbucks or
even some larger brands?
(22:40):
What are some principles forhow you go about managing your
margins and control costs?
Sri Devel (22:47):
Yeah, it's really control the controllables.
That's a saying that we say inthe industry all the time.
There's only so many thingsthat you can control.
It's a science, right, likemanaging a P&L for a restaurant.
There are so many line itemsthat just take and take and take
.
A lot of people don'tunderstand that.
Even just swiping your creditcard at a restaurant, well,
guess what we owe you know,anywhere between 2.1 and 3% of
(23:09):
that credit card swipe.
I mean it's just at everyturnaround there's somebody
taking away from that dollar andreally, if you talk to most
owner operators or chefs oranyone like that, all they want
to do is offer just a greatexperience for their guests.
That's just truly what keepsthem going during the day.
So the economics are tough andrestaurants are notorious for
(23:31):
our margins being so thin.
There's a ton of competition,so you always have to separate
yourself, and so you have toreally know your brand, know
what you offer, know the foodthat you offer, and then just
keeping the controllables in.
So that would be.
You know your, your labor, yourfood costs.
Those are your two biggest ones, and then you know you also
have to factor in your rent,which is always a big one, and
(23:54):
then you have water and sewageand trash, and it's just crazy.
So we just deal with so manydifferent variables that if you
can control the controllables,at least you know that you have
like your operating costs dialed.
So your sales we go throughlike a performa exercise, right.
So like when you do performayou do forecasting or you try to
see like that's really just aguess, you're just guessing that
(24:16):
on this Saturday night you'regonna do 300 covers and then you
staff accordingly, and so it'slike okay, you have your staff
coming in, because you hope thatyou have 300 covers coming in.
If by chance you're only gonnahit like 190, you gotta be able
to cut your costs and labor ordo it somehow in food costs or
cross utilization of your food,making sure that that zucchini
(24:37):
appears in six different plates.
So you have six differentoptions to get rid of the
zucchini that you just offered.
Again, performa blast, performa.
Weather is huge, especially inCalifornia.
It rains and we're like, wait,where'd the people go?
It's like the craziest thing.
We're like did nobody leavetheir house?
But on the flip side, if wehave a steakhouse or a pokey
concept, like it would rain andpeople were like, oh, we don't
(24:58):
want cold food.
I'm like, well, the rice is hot, we have soup.
You know, you have all thesedifferent things that people
start to think differently.
So again, if you can controlyour controllables, really know
how you're doing your performaand what to expect.
So a lot of times when we doforecasting we'll look at the
weather, we'll look at the 14day weather.
When we're doing labor, we'relooking at okay, what's in town?
(25:19):
Do we have anything fun?
I have a concept in Arizona andwe were talking about doing a
shoot or meeting or doingsomething and they're like, oh
my gosh, the Arabian horseconference is in town.
So we're just slammed.
And I'm like Arabian horseconcept, like what, what are you
talking about?
And they're like, oh my gosh,it's huge in Arizona and they're
a steakhouse in Scottsdale andthey're like that's our exact
(25:39):
demographic.
So we're going to be slammed,we can't do that weekend.
I was like, ok, so they'relaboring up on those weekends
because they know they're goingto be busy knowing what's going
on in your community, theweather, all these things.
Control your controls.
Brian Sheehan (25:52):
We talked earlier about how important delivery
still is that even kind of atrend, although it really ramped
up during and after COVID,right.
Sri Devel (26:02):
Yeah.
Brian Sheehan (26:03):
But you had mentioned to me that you know
that's something that's nolonger optional.
Sri Devel (26:07):
Yeah.
Brian Sheehan (26:08):
And if you're a restaurant thinking still about
integrating delivery services,what challenges do you face
bringing that online?
Sri Devel (26:17):
Absolutely so.
A lot of the big players inthis space that we call them 3PL
, the three party deliveryleaders.
Those services are so expensiveand they're expensive for us.
Some of them charge anywhere,like if you're a really big
franchise.
I've seen it get down to about19%.
I think that's the lowest I'veever seen.
I've seen it get down to about19%.
I think that's the lowest I'veever seen.
Most of the time it's 28 to 30%.
(26:38):
And so these delivery providers,they don't have overhead costs,
they don't have employees, theydon't have all these things.
But it's just, it's a necessitybecause of the way the
generational difference, right.
So we would hardly get deliveryunless it was pizza.
Like that was really all wedelivered back in the day, right
, like my kids keep laughing atme because I said back in my day
(27:00):
I'm there, right, so back inthe day it was really pizza and
sometimes you got Chinese food.
Like those were the two thatwere notorious for delivery.
Post COVID.
I was working with concepts whodidn't have third-party delivery
and they were freaking outbecause they're like we're not
going to get any sales, we can'tdeliver.
They were trying to finddelivery their own and now kind
of how everything is justmellowed out.
You know it's been three yearsobviously, but the way that it
(27:23):
is it's just.
You see it as growth and I'veseen some restaurateurs see it
as well.
We're open anyways, so I mightas well be getting those one or
two extra plates per hourbecause they have labor.
So it's helping offset laborcosts.
But in offsetting labor costsyou owe 30% to the third party
delivery drivers.
So it's still like a fourletter word for us until we can
(27:44):
figure out how to do it and notand not just destroy our bottom
line because our food costdoesn't change.
Just because they're taking 30%doesn't mean that our food cost
, like we a lot of times, wedon't have that on a menu item,
we don't have that margin.
But again, my son he's 14.
I got him a 200 door dash giftcard for christmas because
(28:04):
that's all he wanted.
Like convenience is just a partof their life.
Now they don't know anythingdifferent.
They grew up in a time whereeverything was being delivered
of course amazon.
you know like oh, I gotdeodorant last night, I'm gonna
put it in and it will show up onmy doorstep in the morning.
But it's just one of thosethings that it absolutely is a
necessity that we're a part ofthat, because it's also a
marketing tool to be found onthese things.
(28:26):
Like a lot of times, likepeople will go to Google to find
like best steak house near me.
If people are anticipating adelivery, they'll go to DoorDash
or Grubhub or Uber Eats andthen they'll go on that and be
like oh, what's the best Chinesenear me?
Because I want it delivered tomy house.
So it's also a marketing tool.
There's a lot of companies rightnow.
I know pot menu does a good jobof it, owner calm does a good
(28:46):
job of it as well, but they'reoffering like solutions to that.
But they take a piece too, andso it's like everyone's like
well, we can compete with thembecause we're going to take less
, but it is offering solutionsto the restaurant partners.
That isn't 30%.
So it's, you know, if therestaurant partners can take
that in themselves, it's a hugebenefit.
You do lose a little bit ofthat marketing power to being
(29:08):
found on there, but again,you're not paying 30%, so that
could be a wash depending on howyou look at it, but it's
absolutely especially for anysort of quick service restaurant
, like any QSR.
The third party delivery isjust.
It is what it is Like.
You have to do it.
That's what people expect fromyou.
Brian Sheehan (29:23):
Interesting, though I guess, like everything
there's, it sounds like there'sinnovation in that space as well
.
Sri Devel (29:29):
Thank goodness, yeah, I love like I don't get
delivery at my house just forthe principal alone.
But I just feel like for solong they just like you know I
get really protective of theindustry if you can't tell but
it's like for so long there wasjust no other options and they
just weren't giving.
And it was like you know,unless you had like a 300 unit
(29:49):
chain, they weren't even lookingat you or talking to you.
So it's kind of like I think Ihave like post-traumatic from
that so I'm just like, oh, Idon't really love them, but it
is what it is right.
So there's going to beinnovation, there's going to be
people who mimic them and can doit a little bit differently.
That favors more our industry,because really they you know,
third party delivery was notbuilt to favor the restaurant
(30:10):
industry.
It was built to favor thebehaviors of the modern day
consumer.
Brian Sheehan (30:17):
Well, and to your earlier point about community
engagement, you know, if there'sa local restaurant that I love,
sort of regardless of whatplatform they're using, if I'm
really involved and engaged inthe community, you know that
customer is probably going tofind out who you're running with
.
Yeah, and get that app andorder from them, right?
Sri Devel (30:33):
Yeah, and you'll see, like a lot of times we do it a
lot, it's marketing, so orderfrom them, right?
Yeah, and you'll see, like alot of times we do it a lot,
it's marketing, so we do thisfor our partners.
But we will, basically, whenyou order from DoorDash or
Grubhub, we'll put a slip inthere that says order straight
from our website and save Xamount because we have to
upcharge that guest.
You know, that's like the joke,it's like the $17 latte from
Starbucks and they're like oh,but it showed up on my doorstep
(30:53):
so I don't care, and you're likeokay, so we've had to learn and
evolve as an industry tounfortunately, charge the guests
that fee Because, again, a lotof times on our menu items we
don't have the 30% to cover it.
Like that's wild.
Brian Sheehan (31:08):
So and that's why I pick up a lot of my own food
too.
Sri Devel (31:11):
Yeah, yes, and that helps, I promise you it does.
Or downloading the restaurant'sapp or going directly to their
website, because now, as we'reseeing, like the innovation,
there are people who arecompeting with these big, you
know titans in that industry,but it's like there is an
opportunity where you can orderon their website and then we can
tap into a driver who can haveit delivered to you, and so we
(31:33):
see that as a great benefit.
So if you can go directly tothe restaurant's website, as
opposed to the third party, orif you can order directly from
their app they're now evolvinginto having their own delivery
systems, but it still it helps aton.
Brian Sheehan (31:45):
Well, Sri, it was great speaking with you today.
Thank you for taking the timeto help educate our listeners
about some of the excitingtrends you're seeing in the
restaurant industry and somebest practices for restaurant
operators.
You can connect with Sri at Sriat the culinary CMO dot com.
Sri Devel (32:02):
Yeah, I'll be there.
Brian Sheehan (32:05):
Thank you.
Sri Devel (32:06):
Awesome.
Thank you so much.
It was so good to speak to you.
Brian Sheehan (32:08):
Likewise, whether you're an aspiring real estate
mogul, a seasoned pro or simplycurious about the places where
we shop, dine and work, thispodcast is your all-access pass
to the world of commercial realestate.
Connect with me on LinkedIn and, if you're interested in being
a part of Retail Intel, send amessage to nationalaccounts at
phillipsedisoncom.
(32:29):
If you want to hear more aboutnew and expanding brands, keep
tuning in to Retail Intel and besure to like, subscribe, follow
and repost.
Talk to you next time.
Welcome to Retail Intel, the podcast where we
dive deep into the dynamic worldof commercial real estate.
I'm your host, brian Sheehan,and I'm thrilled to be your
guide on this journey throughthe bustling streets of retail,
the aisles of shopping centersand the world of property
investment.
With me today I have Sri Devel,the founder and principal at
(00:28):
the Culinary CMO.
This is Sri's second time onthe show and we're thrilled to
have her back.
Sri began her career as aclassically trained chef,
graduating from the celebratedArt Institutes of California,
and has achieved a level onesommelier rank with the Court of
Master Sommeliers.
Sri welcome, how have you been?
Sri Devel (00:50):
Thank you, I've been so good.
How are you?
Brian Sheehan (00:53):
I'm great.
You know it's been aninteresting time at Pico.
There's been a lot of growth,there's obviously a lot of
activity in the restaurantsector and that was one reason I
was really excited to have youcome back on Retail Intel to
talk about the kinds of thingsthat you've been seeing.
But before we get there, itsounds like you've got a new
(01:13):
partnership kind of underway orin the works and I wondered if
you want to talk about that fora second.
Sri Devel (01:19):
Yeah, absolutely.
We have some really greatthings going on at the Culinary
CMO.
We have just been really ableto hit a niche with restaurants
and it's just been like had youtold me 10 years ago that this
could be possible like it's justlike a dream.
I get to work with theseincredible chefs, I get to work
with these incredible teams andreally just help tell their
story and it's just incredible.
(01:41):
And I had a really fun chancemeeting and FSR at conference
that I was speaking at.
It was QSR and FSR and I had agreat chance meeting with one of
the owners of archway, and sothey're one of the leading print
houses in restaurant and retailspace, for really both, and so
they were really growing theirculinary side of print work,
(02:01):
which is so funny because it'syou don't think of us as doing a
lot of print, but we actuallyreally do and they have like a
ton of solutions, and so it wasreally cool.
We kind of talked for a littlebit and then it was one of those
things where like yes, thisabsolutely just works, so I'm
able to offer my clients areally sophisticated print
(02:22):
platform, and so that's justreally cool to offer.
Because I love to work withowner operators.
I also represent a ton offranchise orders and franchisees
, but it's really fun to be ableto offer them solutions.
They work with a lot of thetitans in the industry, like
think Starbucks, young brands,like all these huge big brands.
So if I'm able to offersometimes smaller you know,
(02:43):
smaller units and that type ofstuff, the same kind of
solutions and dashboards andthose types of things, it's
really cool.
It's really fun to see, becausemy goal always just with the
Culinary CMO, was to always helpand offer assistance in any way
I can for restaurants and thiswas one of them, so it was
really exciting.
It was a really coolpartnership.
We've had a lot of fun.
I've been working with them forabout four to five months and
(03:04):
they have a huge print house inGeorgia and so I never knew I
loved the South as much as I do,but Atlanta is like I'm like
yes, like the culinary there.
It's just amazing therestaurant.
So it's been fun.
It's been a great partnership.
We've been able to offer a lotof solutions for a lot of my
clients.
So I think it's a really goodsymbiotic partnership that I
never knew I needed.
Brian Sheehan (03:24):
Oh, that's great.
You know, it sounds like itcame about really organically
and yeah, yeah.
Then that kind of brings me tomy next question, which is you
know there's been a lot that'shappened since we spoke last
year in the industry and I'mcurious, kind of what trends
you're seeing, you know, thatare really affecting your
partners.
Sri Devel (03:43):
Yeah, absolutely, I think the biggest you know that
are really affecting yourpartners.
Yeah, absolutely.
I think the biggest you know,like the elephant in the room,
of course is food costs.
Everyone from grocery all theway up to restaurants.
It's just something that'shappened and we've always felt
it.
We always try to control thecontrollables, and so food cost
is always a controllable that wetry to control, but, man, it's
getting difficult.
So I think that's the elephantin the room.
(04:05):
It's just our costs are rising,so, unfortunately, we have to
roll that over to our guests.
So we hear it.
I think that's one of the bigthings that I've seen in trends.
So kind of stemming from thatis, you know, we've always been
very smart at cross utilizationor using the whole animal or
vegetable or those types ofthings, but I do think that our
menus are getting smaller andmore precise, which actually
(04:26):
helps us from bringing in toomany products that don't get
sold or we have minimal waste.
So I think smaller menus, moreprecise menus, more focused
menus on what the restaurantdoes well, and so they'll kind
of lean into that, which is whatI'm seeing.
Also, probably in 2025, we'llsee like a huge revival of the
martini, which is really funnybecause it's like, as a martini
(04:52):
drinker, I'm like wait, wheredid they go?
Remember about 1520 years ago?
I mean, that was everywhere.
Brian Sheehan (04:56):
When.
Sri Devel (04:56):
I was a server, it was like martini night, that was
the night right, like you knewthat you can make a ton of tips
on that.
So martinis are going to bemaking a big comeback and also,
you kind of see, like in Vegasalready, in those types of
things like the supper clubs,like a little bit lean into a
little bit more leisurely, yousee those big overstuffed booths
you see kind of like supperclubs or something like to be a
part of.
So it's like memberships, thattype of stuff.
We're seeing a huge comeback ofthat and I just think it's
(05:18):
really cool and I think just thestyle it's a little bit like a
nod to not the olden days, butyou know, it's like Frank
Sinatra era done really, reallywell and done that to a modern
style.
So I'm really excited to seethat.
I've seen that and a couple ofthe build outs that we're doing
right now is really kind of alittle bit of vintage, a little
bit of modern, but just oh socool.
So lots of things in theindustry happening.
(05:39):
That's fascinating.
So what's bringing the martiniback?
(05:59):
You read so much and it seemslike my experience has been
people are consuming back there.
I think they just did a hugelayoff and one of them, and so
it's just, the drinking is goingdown, which is a good thing.
That also makes way for nonalcoholic beverages.
I don't know if you'veexperienced it as well, but you
know the non alcoholic beveragesright now they're using spirits
that have no alcohol they'rezero proof spirits and then
(06:21):
they're including those in fullhandcrafted cocktails.
So it's really cool.
So you can sit down with yourfriend and you can order the
martini.
And then I can order a hibiscuscooler, but you don't
necessarily know that it doesn'thave booze in it.
So I can drink with you and Ican be there with you.
It's kind of also enjoying thesober.
Curious movement is huge andthat's coming in really big.
(06:41):
I think wine you know wine willalways have its moment.
It's such like a food and wineright.
It's such like a partnershipthat will never go away.
But I think wine had a hugeresurgence of, you know, making
their way and everyone wanted tobe more educated than wine, and
I think it's just time.
Remember the vanilla vodkas orthe flavors vodkas?
Had their time at one point, sonow I just think it's like the
(07:01):
true and classic martinis arecoming back.
I think it does pay a littlebit into that you know kind of
vintage era that a lot of therestaurants are going in, and so
I just think it's on its wayback, but people are definitely
drinking less Absolutely.
So I think those who will bedrinking will be partaking in
martinis.
It's coming back.
Brian Sheehan (07:20):
And it's just a part of the same trend that is
bringing the supper club back.
Talk what's what's going onwith supper clubs?
Sri Devel (07:27):
I think so.
Yeah, I just see that a lot.
Vegas did it a couple of yearsago and it's just kind of that
more loungy, relaxed environment.
It's not like you know country.
It's very modern.
It's very like vintage lightingwith big overstuffed booths.
It's kind of like a way ofservice.
So it's definitely fine tuningservice.
People aren't going out as muchand so it's really when they go
(07:50):
out, they expect an exceptionalexperience and something that
our restaurants can offer tothem as an exceptional dining
experience.
That's really what we strivefor every day.
So by kind of creating likethis incredible service
environment, I think it's justsomething really fun.
I think it's just somethingreally fun.
I think it's going to be cool.
It's definitely a design themetoo.
Even some quick service aregoing more vintage in style,
(08:11):
which I love.
But I just do like a huge andwhen I say vintage I mean like
vintage elements.
It's not everything it's.
You know.
They're kind of just playingback to what people are
comfortable in and gettingpeople to kind of relax a little
bit longer for each experience,because we know you're going
out less.
Brian Sheehan (08:26):
You see it in the fabrics, the materials they use
, how they decorate the musickind of everywhere or just
little moments in restaurants.
Sri Devel (08:34):
Yeah, colors, textiles, fabrics, it's a lot of
deep, richer colors.
Black has had its moment inrestaurants for a long time now,
especially barbecue and thosetypes of things, which is rad,
so to see like elements.
You know, for so long black wasonly like an outline and now
it's like the color ofrestaurants and it's really cool
.
So the darker, royal colors,richer colors, all of those
(08:55):
things are really making acomeback and I'm here for it.
Brian Sheehan (08:59):
And to your point .
So vintage is about making youfeel more comfortable.
You spend longer.
Maybe you spend more whileyou're there.
Sri Devel (09:08):
Yeah, you're going out less, and that's just a
proven fact.
People are going out less rightnow.
So it's one of those thingsthat, okay, we want to be able
to be your choice when you do goout.
And how do you do that?
It's the way we make you feel.
So we make you feel comfortable, we make you feel non-rushed,
we make you feel like you canstay with us.
We don't have a 60 minute timelimit like those times during
(09:29):
COVID and all those things.
You know like we're.
The pendulum has swung so farthe other way.
Come and sit with us, chat withus a while.
You know your server knows yourname, kind of the cheers bar
that everyone wants.
I kind of feel like that's youknow you pull up and you know
the bartender, she knows yourdrink and it's definitely going
to return to that.
I'm really excited for it.
It's very personable, it'sbringing personality back to
(09:51):
service and it didn't goanywhere.
But it's one of those thingsthat people are leaning into.
It's you know it's.
We want to make you feel likeyou need to be with us on those
nights that you go out.
And so how do we do that?
We definitely create a brandaround making you feel
comfortable.
Brian Sheehan (10:04):
You talked earlier about some of the pain
points that restaurants areexperiencing.
One of those is cost.
What else are you seeing thatthey're struggling with?
Sri Devel (10:15):
Food cost is just one of the biggest challenges right
now and it's always somethingthat we've dealt with.
We always know that it's acommodity.
It's going to go up and down.
We know that if the Midwest hasa freeze, tomatoes and spinach
are going to go up.
We know that the farmers weredealing with a lack of water for
some time in California so itskyrocketed.
We're really lucky because ofyou know that the way that trade
(10:37):
goes and that type of stuff,that we really can get anything
from anywhere, Sometimes it justcomes at a cost and so some
restaurants are choosing justnot to do it.
You know they're not choosing todo the $600 case of avocados
anymore, so they may substitutewith something else or even
change a menu ingredient wherethe old school hospitality was
like at any cost, like someone'sgot to run out and go find
(10:58):
avocados or somebody's got to godo this to do that.
So now chefs are kind oflooking at their menu and
they're like, okay, well, wecan't offer this.
And some chefs are leaning inand saying, okay, well, we're
going to offer a superiorproduct, but the price has to be
adjusted, and so sometimesthere's a little bit of pushback
with that, but really again,what we're here to do is just
offer like an incredible diningexperience for guests who come
in.
But food costs is there.
(11:19):
It's always been there, butit's definitely a challenge
right now, I think, for wine.
There was like a glass shortagein Italy, I think, so a lot of
the wine that was coming out ofItaly had to be a little bit
more expensive or it was delayed, so a lot of our glass bottling
was an issue.
I think that's since beenresolved.
And then just kind of what wediscussed is people are just
going out less, and so it'sreally just being that top of
(11:39):
mind being that choice.
When people are going out, ourrestaurants need to be where you
want to go, and so that'sseveral different ways.
You know the culinary CMO.
We do the multi channelapproach.
So then the way anyone consumesmedia, you find us, and so
that's what we offer to ourrestaurant partners.
But when you do go out, we wantyou to think of us, and so it's
(12:00):
definitely a challenge rightnow and it's something that has
been for a bit.
You know, like the COVID era.
Everyone wants to forget andnobody wants to remember those
times, especially in therestaurant industry.
But yeah, I do feel like it'sjust a different set of
challenges.
People are more cautious ofspending money just because
things are so expensive rightnow.
Brian Sheehan (12:21):
And yet there's so much innovation, so many
exciting things happening in therestaurant industry.
I mean, it's one of the reasonsI love getting to talk to you
and you work with reallyinteresting fast growing brands
and I'm curious if there's somethings you know that they all
have in common, kind of what'shappening with those brands that
are growing quickly right now.
Sri Devel (12:41):
Yeah, absolutely.
I think the brands that areexpanding are thinking outside
the box.
So they're thinking, you know,maybe a different state or
they're thinking of expanding indifferent ways.
The best thing that you can dowhen you expand is just really
be true to who your brand is.
Don't try to be everything toeveryone, but also embrace the
community and do those types ofthings, which is so huge and
(13:03):
kind of knowing where you'regoing and what those people are
really into, right.
So I think identifying andlocating your best market is
probably the first one.
They're embracing communitiesthat are similar to where
they've had success in othercommunities or different cities
or different centers or thosetypes of things.
I think, especially whenworking with like a real estate
(13:24):
partner, it's really finding outthe demographics, the
psychographics, what peoplespend all those forgive me, I
don't know the name, but it'swhat real estate officials will
offer to like restaurant ownersLike, hey, this is, you know how
this center performs and Ithink, really taking a look at
that and diving in and then alsojust talking to other
restaurant partners around you,you know what is their successes
and what are those things.
(13:44):
You know restaurants are just areally risky business and so
it's always good to kind of hearwhat people are doing.
A lot of people who are buildingright now are taking over
second and third generationsites for obvious cost reasons.
Building material is insane,and so it's just one of those
things that I think they'rereally looking for prime
location, prime opportunities.
(14:05):
But then also, you know secondor third generation sites that
they can go.
Okay, well, you know, I know astove went in here because it's
already piped forward or plumbedforward or whatever.
So it's like I don't have to dothat and that's a $15,000
savings.
So I think people are reallylooking smart, especially those
smart operators.
I work with a team that is justprobably the best operators
I've ever seen and they're goingin.
You know they're like okay, wewant a second or third
(14:27):
generation site, we want thiscommunity.
They're partnering with theirrestaurant partner and they're
really getting some good resultswith they're going to go across
the country and they're reallyexcited.
We're really excited about thatopportunity because it just
seems like a perfect fit for usand it's just going to be
incredible.
Brian Sheehan (14:56):
Yeah, and adapt and fit, and earlier we talked
about a concept that's movingfrom California to the Carolinas
.
Maybe you can talk about somespecific ways they're doing that
.
Sri Devel (15:02):
Yeah, absolutely.
So they're keeping their unitsin California, so they're just
expanding and they selectedNorth Carolina.
So it's Mama's Comfort Food andCocktails.
They are so close to my heart.
I just absolutely love thatconcept.
It is just the best conceptwith the best comfort food.
And so they've had some wildsuccess in California and they
really are in growth mode rightnow.
So it's I'm really excited tosee them grow.
(15:24):
Those were the operators that Iwas talking about.
They are just the bestoperators I've seen.
They have just the greatestteam.
What they're going to be doingis taking one of their general
managers, who is actually fromVirginia, I believe, so she's
from the East Coast and she'sgoing to be moving to North
Carolina for their first unit.
They have South Carolinaalready signed, so there's just
(15:44):
like some really cool growthopportunities.
So they're going intocommunities.
They partnered with their realestate, you know, expert, and
they really found a location.
That's really great, and sowe're really excited about it.
And what we are doing is makingsure that the brand is our brand
and this is what we love.
This is how we've had success,and so really what we wanna do
(16:05):
is really lean into the branding.
So it's a really fun concept.
There's lots of bright colors,there's fun fonts.
We do like subtle littlerebrands every two years, which
is, we may introduce a new fontor a new style or a new
background or something likethat, and I know to the modern
person that seems super silly.
Okay, just change yourbackground.
(16:25):
But one of the things that wedo is we stay consistent.
So then you get brandrecognition and brand
recognition whether inCalifornia or North Carolina,
but to where we just really staytrue to the brand and it's a
fun brand.
So I think people are excited.
People are already excitedabout it through the press
releases and all the things thatwe've done.
I don't think they'll openuntil maybe June, but it's a
(16:46):
really cool concept that I thinkpeople will be really excited
about.
And one of the things thatthey've done is they've always
pretty much doubled down intocommunity.
They've always supported thehigh schools and any sort of
charity that is local to thecommunity.
We've donated over a milliondollars to the schools and the
education systems of thecommunities in which we support,
(17:08):
and that's something that'sreally true to both of the
owners is that they support thecommunities.
One of the owners is actuallymoving to North Carolina, so
he'll be there, so he's going tofully embrace it.
I think he had some ties thereprior.
So he's going to go back homeand he's going to bring the
concept with them and it's like.
It's a like soul food, countryfood.
It's just delicious, like a tonof comfort food and amazing
(17:32):
cocktails.
Brian Sheehan (17:34):
I mean a lot of great reasons to be looking at
the Carolinas for growth, and Iguess that kind of answers my
question.
He was moving home or they weremoving home and built this
concept in California Southerncomfort food.
Now they're going to take itback.
So if you went to Mama's inSouthern California, turn around
, end up backing the Carolinasand walked into a Mama's, it
(17:55):
would still look and feel kindof like the same place, right?
Sri Devel (17:58):
100%.
So, yeah, it's real, truecomfort food, and so they'll
take it nationwide.
I'm excited for their growthperiod right now.
It's really exciting.
Brian Sheehan (18:07):
Talk about, I guess, the importance of
community involvement.
The retailers and restaurateursthat I speak with that seem to
kind of outperform the size oftheir space in terms of sales.
You know, really do a good jobof that and it seems a little
bit like a secret sauce.
How do you do that effectively?
You know, how do you engageeffectively with your local
(18:30):
communities to build loyalty?
Sri Devel (18:33):
Absolutely so it's.
You know, loyalty also is bothways right.
So for your guests andcustomers to be loyal, they have
to be loyal, and so one of thethings that I see a lot of
restaurateurs do that it justisn't necessarily.
In my opinion, the right way todo it is they'll just kind of
spot check, like they'll justget like a banner and then okay,
well, we're up at the highschool, so we know one of the
(18:55):
things that Mamas Come for Foodand Cocktails does is they lean
in, and so it is.
You know, donations in ourindustry our margins are so
small, so to take the stancethat they are going to
contribute to the communities inwhich they serve, that's a big
deal and that's a huge financialcommitment, especially when
everyone is cutting back andeveryone is doing less right?
So what they do, they do justabout the opposite of spot check
(19:19):
.
So they actually, you knowauction baskets, and then
they're supporting the swim teamand then they're supporting the
baseball team.
It's not just one high school,it's all high schools.
They do a really amazingprogram called give back days,
and so the give back days areone of the things where a lot of
restaurants will do it.
But the way that mamas does itand so, consistently, it's a
really big deal, and so theyhave a really cool formula to
(19:40):
where they'll do it.
So it's 20% if you have lessthan 40 people and then it's 30%
if you have 50 or more.
So, really like, it's reallyupon the group to really get
their group there, but thenmamas will write the check.
So it's just one of thosethings.
We offer a space for them at nocost.
They can come in and eat anddine and then we donate like up
(20:02):
to 30% of their ticket back tothe group and it's just
something really cool.
But they do it and I would notbe exaggerating to say that they
do this 365 days a year.
And again, it's something thata lot of restaurants will just
be like oh my gosh, another giftcard.
Oh my gosh, another donation.
Oh my gosh, another charity.
It just starts to add up and,like I said, mama says donated a
(20:22):
million dollars and that's partof their business practice.
So they have that worked in.
But I hear so much from otherrestaurants that are just like I
.
You know, this is $300 for thismonth that we get hit up for.
Or, you know, you'll ask thecommunity involvement or
something like hey, can you giveme oh goodness, I forget what
it's called like a 501c3 orwhatever that form is or
(20:43):
something.
And they're like, oh well, wedon't have it.
And it's like, well, we do needthat to offer.
There's so many things, but Ido think that that is a huge
part of the concept.
Success not only great food,great service, amazing cocktails
, but also just the community,is something that they've really
always just dove into.
(21:03):
They have a second conceptcalled Dos Amigos Cantina, and
they do the exact same thing andit's just, that's packed.
You'll go in there and theyhave anywhere from 20 to 50
people who are there on acommunity engagement that they
have helped facilitate, likeMamas has helped facilitate.
It's just, it's really awesome,it's just really cool.
And I just don't see peopledoing it.
(21:23):
And a lot of times you get somepushback like, hey, we have
this great opportunity to be apart of this, and they're like
I'm sorry, I just don't have thecash for it.
And and I understand that too,I really really do Like, look,
our margins are so thin,especially now.
So I see a lot of peoplepulling back on donations or
just, you know, a communityinvolvement.
It's the exact opposite of whatMama's Comfort Food and
Cocktails do.
(21:43):
They do a really exceptionaljob at that.
Brian Sheehan (21:46):
It sounds like it can't be a part-time thing.
Don't look at it as a part-timething.
Sri Devel (21:51):
Yeah, don't spot check.
Brian Sheehan (21:52):
And also there's a little bit of faith and trust
that if we give until it hurts,it's going to come back to us.
Sri Devel (21:58):
Yeah, definitely.
Brian Sheehan (22:00):
That's fascinating.
Sri Devel (22:02):
It's got to be the thought process, it's got to be
like the mission of you know.
It's got to be just a part ofyour everyday business.
And that's what they do.
It's again, I see it when youspot check and you buy this
banner and you buy this quarterpage ad and the football thing,
then it's like it really doeshave to be accumulation, not
just a one-off.
Brian Sheehan (22:19):
The economics, as you mentioned, are so important
in the restaurant industry andthis sounds like kind of a
relatively smaller group,although they've got multiple
locations, different concepts.
I wonder if you could talkabout how single smaller unit
operators that don't have thebuying power of the Starbucks or
even some larger brands?
(22:40):
What are some principles forhow you go about managing your
margins and control costs?
Sri Devel (22:47):
Yeah, it's really control the controllables.
That's a saying that we say inthe industry all the time.
There's only so many thingsthat you can control.
It's a science, right, likemanaging a P&L for a restaurant.
There are so many line itemsthat just take and take and take
.
A lot of people don'tunderstand that.
Even just swiping your creditcard at a restaurant, well,
guess what we owe you know,anywhere between 2.1 and 3% of
(23:09):
that credit card swipe.
I mean it's just at everyturnaround there's somebody
taking away from that dollar andreally, if you talk to most
owner operators or chefs oranyone like that, all they want
to do is offer just a greatexperience for their guests.
That's just truly what keepsthem going during the day.
So the economics are tough andrestaurants are notorious for
(23:31):
our margins being so thin.
There's a ton of competition,so you always have to separate
yourself, and so you have toreally know your brand, know
what you offer, know the foodthat you offer, and then just
keeping the controllables in.
So that would be.
You know your, your labor, yourfood costs.
Those are your two biggest ones, and then you know you also
have to factor in your rent,which is always a big one, and
(23:54):
then you have water and sewageand trash, and it's just crazy.
So we just deal with so manydifferent variables that if you
can control the controllables,at least you know that you have
like your operating costs dialed.
So your sales we go throughlike a performa exercise, right.
So like when you do performayou do forecasting or you try to
see like that's really just aguess, you're just guessing that
(24:16):
on this Saturday night you'regonna do 300 covers and then you
staff accordingly, and so it'slike okay, you have your staff
coming in, because you hope thatyou have 300 covers coming in.
If by chance you're only gonnahit like 190, you gotta be able
to cut your costs and labor ordo it somehow in food costs or
cross utilization of your food,making sure that that zucchini
(24:37):
appears in six different plates.
So you have six differentoptions to get rid of the
zucchini that you just offered.
Again, performa blast, performa.
Weather is huge, especially inCalifornia.
It rains and we're like, wait,where'd the people go?
It's like the craziest thing.
We're like did nobody leavetheir house?
But on the flip side, if wehave a steakhouse or a pokey
concept, like it would rain andpeople were like, oh, we don't
(24:58):
want cold food.
I'm like, well, the rice is hot, we have soup.
You know, you have all thesedifferent things that people
start to think differently.
So again, if you can controlyour controllables, really know
how you're doing your performaand what to expect.
So a lot of times when we doforecasting we'll look at the
weather, we'll look at the 14day weather.
When we're doing labor, we'relooking at okay, what's in town?
(25:19):
Do we have anything fun?
I have a concept in Arizona andwe were talking about doing a
shoot or meeting or doingsomething and they're like, oh
my gosh, the Arabian horseconference is in town.
So we're just slammed.
And I'm like Arabian horseconcept, like what, what are you
talking about?
And they're like, oh my gosh,it's huge in Arizona and they're
a steakhouse in Scottsdale andthey're like that's our exact
(25:39):
demographic.
So we're going to be slammed,we can't do that weekend.
I was like, ok, so they'relaboring up on those weekends
because they know they're goingto be busy knowing what's going
on in your community, theweather, all these things.
Control your controls.
Brian Sheehan (25:52):
We talked earlier about how important delivery
still is that even kind of atrend, although it really ramped
up during and after COVID,right.
Sri Devel (26:02):
Yeah.
Brian Sheehan (26:03):
But you had mentioned to me that you know
that's something that's nolonger optional.
Sri Devel (26:07):
Yeah.
Brian Sheehan (26:08):
And if you're a restaurant thinking still about
integrating delivery services,what challenges do you face
bringing that online?
Sri Devel (26:17):
Absolutely so.
A lot of the big players inthis space that we call them 3PL
, the three party deliveryleaders.
Those services are so expensiveand they're expensive for us.
Some of them charge anywhere,like if you're a really big
franchise.
I've seen it get down to about19%.
I think that's the lowest I'veever seen.
I've seen it get down to about19%.
I think that's the lowest I'veever seen.
Most of the time it's 28 to 30%.
(26:38):
And so these delivery providers,they don't have overhead costs,
they don't have employees, theydon't have all these things.
But it's just, it's a necessitybecause of the way the
generational difference, right.
So we would hardly get deliveryunless it was pizza.
Like that was really all wedelivered back in the day, right
, like my kids keep laughing atme because I said back in my day
(27:00):
I'm there, right, so back inthe day it was really pizza and
sometimes you got Chinese food.
Like those were the two thatwere notorious for delivery.
Post COVID.
I was working with concepts whodidn't have third-party delivery
and they were freaking outbecause they're like we're not
going to get any sales, we can'tdeliver.
They were trying to finddelivery their own and now kind
of how everything is justmellowed out.
You know it's been three yearsobviously, but the way that it
(27:23):
is it's just.
You see it as growth and I'veseen some restaurateurs see it
as well.
We're open anyways, so I mightas well be getting those one or
two extra plates per hourbecause they have labor.
So it's helping offset laborcosts.
But in offsetting labor costsyou owe 30% to the third party
delivery drivers.
So it's still like a fourletter word for us until we can
(27:44):
figure out how to do it and notand not just destroy our bottom
line because our food costdoesn't change.
Just because they're taking 30%doesn't mean that our food cost
, like we a lot of times, wedon't have that on a menu item,
we don't have that margin.
But again, my son he's 14.
I got him a 200 door dash giftcard for christmas because
(28:04):
that's all he wanted.
Like convenience is just a partof their life.
Now they don't know anythingdifferent.
They grew up in a time whereeverything was being delivered
of course amazon.
you know like oh, I gotdeodorant last night, I'm gonna
put it in and it will show up onmy doorstep in the morning.
But it's just one of thosethings that it absolutely is a
necessity that we're a part ofthat, because it's also a
marketing tool to be found onthese things.
(28:26):
Like a lot of times, likepeople will go to Google to find
like best steak house near me.
If people are anticipating adelivery, they'll go to DoorDash
or Grubhub or Uber Eats andthen they'll go on that and be
like oh, what's the best Chinesenear me?
Because I want it delivered tomy house.
So it's also a marketing tool.
There's a lot of companies rightnow.
I know pot menu does a good jobof it, owner calm does a good
(28:46):
job of it as well, but they'reoffering like solutions to that.
But they take a piece too, andso it's like everyone's like
well, we can compete with thembecause we're going to take less
, but it is offering solutionsto the restaurant partners.
That isn't 30%.
So it's, you know, if therestaurant partners can take
that in themselves, it's a hugebenefit.
You do lose a little bit ofthat marketing power to being
(29:08):
found on there, but again,you're not paying 30%, so that
could be a wash depending on howyou look at it, but it's
absolutely especially for anysort of quick service restaurant
, like any QSR.
The third party delivery isjust.
It is what it is Like.
You have to do it.
That's what people expect fromyou.
Brian Sheehan (29:23):
Interesting, though I guess, like everything
there's, it sounds like there'sinnovation in that space as well
.
Sri Devel (29:29):
Thank goodness, yeah, I love like I don't get
delivery at my house just forthe principal alone.
But I just feel like for solong they just like you know I
get really protective of theindustry if you can't tell but
it's like for so long there wasjust no other options and they
just weren't giving.
And it was like you know,unless you had like a 300 unit
(29:49):
chain, they weren't even lookingat you or talking to you.
So it's kind of like I think Ihave like post-traumatic from
that so I'm just like, oh, Idon't really love them, but it
is what it is right.
So there's going to beinnovation, there's going to be
people who mimic them and can doit a little bit differently.
That favors more our industry,because really they you know,
third party delivery was notbuilt to favor the restaurant
(30:10):
industry.
It was built to favor thebehaviors of the modern day
consumer.
Brian Sheehan (30:17):
Well, and to your earlier point about community
engagement, you know, if there'sa local restaurant that I love,
sort of regardless of whatplatform they're using, if I'm
really involved and engaged inthe community, you know that
customer is probably going tofind out who you're running with
.
Yeah, and get that app andorder from them, right?
Sri Devel (30:33):
Yeah, and you'll see, like a lot of times we do it a
lot, it's marketing, so orderfrom them, right?
Yeah, and you'll see, like alot of times we do it a lot,
it's marketing, so we do thisfor our partners.
But we will, basically, whenyou order from DoorDash or
Grubhub, we'll put a slip inthere that says order straight
from our website and save Xamount because we have to
upcharge that guest.
You know, that's like the joke,it's like the $17 latte from
Starbucks and they're like oh,but it showed up on my doorstep
(30:53):
so I don't care, and you're likeokay, so we've had to learn and
evolve as an industry tounfortunately, charge the guests
that fee Because, again, a lotof times on our menu items we
don't have the 30% to cover it.
Like that's wild.
Brian Sheehan (31:08):
So and that's why I pick up a lot of my own food
too.
Sri Devel (31:11):
Yeah, yes, and that helps, I promise you it does.
Or downloading the restaurant'sapp or going directly to their
website, because now, as we'reseeing, like the innovation,
there are people who arecompeting with these big, you
know titans in that industry,but it's like there is an
opportunity where you can orderon their website and then we can
tap into a driver who can haveit delivered to you, and so we
(31:33):
see that as a great benefit.
So if you can go directly tothe restaurant's website, as
opposed to the third party, orif you can order directly from
their app they're now evolvinginto having their own delivery
systems, but it still it helps aton.
Brian Sheehan (31:45):
Well, Sri, it was great speaking with you today.
Thank you for taking the timeto help educate our listeners
about some of the excitingtrends you're seeing in the
restaurant industry and somebest practices for restaurant
operators.
You can connect with Sri at Sriat the culinary CMO dot com.
Sri Devel (32:02):
Yeah, I'll be there.
Brian Sheehan (32:05):
Thank you.
Sri Devel (32:06):
Awesome.
Thank you so much.
It was so good to speak to you.
Brian Sheehan (32:08):
Likewise, whether you're an aspiring real estate
mogul, a seasoned pro or simplycurious about the places where
we shop, dine and work, thispodcast is your all-access pass
to the world of commercial realestate.
Connect with me on LinkedIn and, if you're interested in being
a part of Retail Intel, send amessage to nationalaccounts at
phillipsedisoncom.
(32:29):
If you want to hear more aboutnew and expanding brands, keep
tuning in to Retail Intel and besure to like, subscribe, follow
and repost.
Talk to you next time.
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