Shownotes
JT and guest, Robert Moss, discuss the evolving landscape of the barbecue industry, particularly in light of recent challenges such as the COVID-19 pandemic. We engage in an insightful examination of the viability of ghost kitchens as a business model for barbecue establishments, weighing their potential benefits against the fundamental need for the experiential aspect of dining that traditional barbecue restaurants provide. Our conversation further delves into the impact of food delivery services on small businesses, highlighting the financial strains imposed by high commission rates and the subsequent implications for profitability and customer loyalty. We also contemplate the future trajectory of barbecue restaurants, anticipating a proliferation of establishments and an increasing diversity in offerings as culinary entrepreneurs seek to differentiate themselves in a competitive market. Through this dialogue, we aim to illuminate the complexities and dynamics at play within the barbecue realm, offering our listeners a comprehensive understanding of the industry's current state and potential future.
Links referenced in this episode:
Companies mentioned in this episode:
- Painted Hills Natural Beef
- Domino's
- Smokin Oak
This podcast uses the following third-party services for analysis:
OP3 - https://op3.dev/privacy
Transcripts
This is Barbecue Nation After Hours.
Speaker A:The conversation that took place after the show ended.
Speaker A:Hey, everybody, it's jt and this is a special version of Barbecue Nation.
Speaker A:It is brought to you in part by Painted Hills Natural Beef.
Speaker A:Beef you can be proud to serve your family and friends.
Speaker A:That's Painted Hills Natural Beef.
Speaker A:Hey, everybody.
Speaker A:Welcome to After Hours here on Barbecue Nation.
Speaker A:I'm JT along with Leanne Whippen, and today we're talking with Robert Moss.
Speaker A:Robert F. Moss.
Speaker A:How's that?
Speaker B:That's good.
Speaker A:I got that right.
Speaker B:Don't confuse me.
Speaker B:That Australian guy.
Speaker A:Yeah, that guy's got white hair and looks like he died four years ago.
Speaker A:Anyway, he probably listens to the show.
Speaker C:He probably does.
Speaker A:They love barbecue down there.
Speaker A:Some of my biggest markets are in Australia, truthfully, in the podcast world.
Speaker A:Anyway, we were talking about corporate versus mom and Pops, and then, you know, and Leanne kind of touched on this too, which was my next question about regional chains versus two shop locals.
Speaker A:I give the example of a guy lives up in Seattle that had a barbecue store on the south end.
Speaker A:Covid hit some of the smaller restaurants in downtown Seattle, closed their doors.
Speaker A:He went and turned them into ghost kitchens.
Speaker A:Still cooking everything in what they call soho, which is down towards where the football team and the baseball team play.
Speaker A:And then he would cart it every day, would send one of his vans up into downtown Seattle and they would sell it and they could phone in their orders.
Speaker A:Limited supply, but at least the people that were still going to work or lived in that area could still get fresh barbecue every day.
Speaker A:We've seen that a lot, but in different parts of the country now, things are opening up.
Speaker A:So that's changed a little bit.
Speaker A:Is that a good business model for barbecue, those.
Speaker A:Those ghost kitchens, or is it just something that kind of was trending for a while and it's going to go away?
Speaker A:Predictions?
Speaker C:You two ghost kitchens, I think are still progressing.
Speaker C:And it's.
Speaker C:You got to understand, it's an avenue for a restaurant who say selling New Orleans style food, but they can have a ghost kitchen with barbecue.
Speaker C:So they have dollars still coming in without the full service overhead.
Speaker C:So it's an opportunity for some of these restaurateurs to make more money.
Speaker C:I think barbecue is always about an experience at a restaurant.
Speaker C:So, I mean, from that point of view, no, but I think there's a place for barbecue.
Speaker C:Ghost kitchens.
Speaker B:Yeah.
Speaker B:I'm a little bearish myself on the future of ghost kitchens as I think they'll be around.
Speaker B:I don't think they're going to disappear.
Speaker B:I think the delivery services will still play a function, and as you say, that can be a nice little added revenue stream.
Speaker B:But it goes down back to what you said, which is the experience of a barbecue restaurant.
Speaker B:I think that, you know, people love going and hanging out.
Speaker B:I think that what you're seeing with increasingly is barbecue places that are sort of combo indoor and outdoor, that tend to have large patios or grassy areas, picnic tables and things like that.
Speaker B:So I think that that's going to counterbalance the COVID era tendency to want to do delivery.
Speaker B:I mean, barbecue is always a good food for delivery because compared to a lot of other types of foods, it holds up well.
Speaker B:You can take a.
Speaker B:Take out of a pound of barbec or whatever and take it home and eat, you know, eat it 30 minutes or an hour later and still pretty good.
Speaker B:But I do think you lose out on that.
Speaker B:That experience or aspect that it's always been, I think, so important for barbecue.
Speaker A:So that leads me to another question.
Speaker A:I don't know if you guys have seen the ads on tv, but Domino's, perhaps not the world's greatest pizza chain, but probably the world's most successful pizza chain.
Speaker A:I'm guessing they went out and bought a ton of gift cards and coupons for other local mom and pop restaurants because the.
Speaker A:The food delivery services, you know, they were just killing them on the percentages that they were charging, and it was killing their bottom line.
Speaker A:And that's the whole preface of the television commercial, but it's actually true.
Speaker A:So I find that interesting because to me, but me, it's just me, I would always go get my own food.
Speaker A:I would never do a delivery service.
Speaker A:When my daughter lived in Seattle, in New York, she used those services, but it ended up, you know, a $10 hamburger ended up costing her 23 bucks.
Speaker A:So I wanted to get your thoughts on those.
Speaker C:Well, I can appreciate what they're doing, but.
Speaker C:And I don't understand this whole delivery service thing because they're taking 30%.
Speaker C:Most people that are making money in a restaurant are not going to make money off that.
Speaker C:To me, it's, you know, they say, oh, well, you're going to get customers that you wouldn't have gotten before, or, you know, this is extra money, but it really is somewhat of a wash with the delivery services.
Speaker C:You know, the gift cards might temporarily help out, but there needs to be a company, and I would like to be that company that can do it and only take 10%.
Speaker C:Yep.
Speaker B:Yeah, I've written a lot about the Delivery services.
Speaker B:And I just don't think the model works on any side of the equation.
Speaker B:I feel like in a lot of ways it's sort of like Groupon was a while back, which is being people would do Groupons because it seemed like a good deal at first, get additional traffic into the restaurant.
Speaker B:But then you realize those weren't loyal customers.
Speaker B:You didn't make much money off of them.
Speaker B:There's no way as a restaurateur you can make 30%.
Speaker B:You can, you can do it with a 30% haircut.
Speaker B:If you look back pre pandemic, a lot of the pitch from the delivery services to the two restaurants was you can add additional sales without adding more staff, without having to, you know, it's just sort of like free additional money, which works, if that is just what it is, a little extra bonus.
Speaker B:But once it becomes a significant part of your business.
Speaker B:Now, you know, restaurants are having to put up whole counters and have people whose entire jobs it is to pack things up for delivery and everything else.
Speaker B:So it's no longer found money.
Speaker C:And the takeout products alone are so expensive with gas going up.
Speaker C:So you have all of, you know, all the to go items that cost so much just to pack it up.
Speaker B:Yeah.
Speaker B:And on the flip side, none of the delivery companies are making money.
Speaker B:If you look at their annual, quarterly and annual reports, they're all bleeding, hemorrhaging money with no sign of ever being profitable.
Speaker B:So the only reason they're making it is they're really, you know, or they're, they're subsidizing the business to drive revenue.
Speaker B:So it doesn't look like they're ever going to get to a model where they can go from 30% to 10% haircut.
Speaker B:They can't make money at 30%.
Speaker B:So I just don't, I don't see long term how it's going to, to be a major part of the restaurant industry.
Speaker B:I think it will fade out and become more of a niche specialty.
Speaker A:But would you say, and I don't know the functions of this, but with the delivery service model, they're guaranteeing their drivers so much and then the drivers can get tips.
Speaker A:I'm assuming where I live, your delivery service is a guy with a Ford F250 pickup.
Speaker A:The dogs are only on one side of the cab, you know what I mean?
Speaker A:They're charging the restaurants.
Speaker A:There's a fee to the person and then there's a tip on top of that.
Speaker A:So there's really no reason unless their labor costs or delivery Costs are so high that they shouldn't be making money on that in my simpleton mind.
Speaker B:Well, I think there's a lot of marketing, there's a lot of technology overhead.
Speaker B:There's just a lot of, you know, a lot of expense to it.
Speaker C:Insurance.
Speaker B:Insurance, Yeah.
Speaker B:I mean, and there's a lot of risk too because right now they're sort of like Uber and everyone else is, they're, they're making.
Speaker B:Their labor force is independent contractors and there's a lot of, you know, move in government regulations to try to make those people be treated more like full time employees.
Speaker B:Things like insurance.
Speaker B:Yeah, they have to cover them.
Speaker B:So I don't see those.
Speaker B:Yeah.
Speaker B:Even with what seems to be like a lightweight cost model now, they aren't making money.
Speaker B:I don't see the cost going down anytime soon.
Speaker B:In fact, I see them going up on the company.
Speaker B:So I'd be.
Speaker B:It's one thing to get scale and then be able to squeeze out a lot of costs because you're so efficient once you get to scale.
Speaker B:But if they aren't scale yet with the.
Speaker B:Considering how many, how omnipresent delivery is now, it's hard to imagine there being more delivery cars on the road increasing scale beyond where they are today.
Speaker A:Yeah, I just, you know, I'll trust the old independent pizza store that's got its own guy named Bob with a, you know, with a Caprice or something that's driving.
Speaker A:He's got the little thing on top of the roof and you know, he's there when he pulls in.
Speaker A:But the, but the rest of them, I don't know, I just, I think it's one of those things where people saw an opportunity and they tried to do it and they raised money and they were going to do it and then.
Speaker A:But they didn't think it through very well.
Speaker A:That's just.
Speaker B:And I think there has been a ton of venture and private equity money pouring into that market.
Speaker B:So if you had a good story, you could get billions of dollars in investment.
Speaker B:But, but turning that into a long, long term profitable business, it's going to be a different challenge.
Speaker A:Absolutely.
Speaker A:So where are we going to be in a couple years in barbecue?
Speaker A:Where do you think we're headed?
Speaker A:Let's just say Covid is put to a place where we can all deal with it because it's probably never going to go away completely.
Speaker A:So we've figured out how to do stuff and we're doing that right now.
Speaker A:But where's the world of barbecue going to be?
Speaker A:20, 24?
Speaker A:2025.
Speaker C:I think you're going to see a lot more restaurants opening.
Speaker C:Yeah, I think the perception is that it's a less costly restaurant to operate, which not necessarily is true, but I mean, it's the American way.
Speaker C:And I don't know.
Speaker C:I think it's going to continue to grow and I think you're going to get some really good players in the market.
Speaker C:There's going to be some strong competition out there.
Speaker C:And, you know, just like L. A, I think you're going to see it pop up more heavily in areas that just didn't have it before.
Speaker C:And, I mean, even in Portland, is there great barbecue in Portland?
Speaker C:I know there's a few places, but it isn't really.
Speaker C:There's not a strong presence.
Speaker C:I think that there's a. I think it's going to expand more throughout the country in the next few years.
Speaker A:Yeah, there's.
Speaker A:In the Portland, Vancouver area, there's more now than there was five years ago.
Speaker A:But then some of those people that started, they didn't have any experience in the restaurant business and they just thought they could cook.
Speaker A:And I'm being a smart ass, but that's my job.
Speaker A:They just thought they could cook a good rack of ribs or a brisket.
Speaker A:So they opened a restaurant and some of these people came from other industries.
Speaker A:There's one guy I know, I interviewed him one time, he was an engineer and he had a very successful engineering career, but he loved barbecue.
Speaker A:So he went to Texas and took a barbecue course at A and M or something, came home, opened this restaurant.
Speaker A:I went in there.
Speaker A:He spent a lot of money on decor and all this, all the accoutrements of this, but the barbecue was average at best.
Speaker A:Okay, he's gone now.
Speaker A:That restaurant is boarded up.
Speaker A:And I'm going to hazard a guess that just to get the doors open, he probably spent three quarters of a million bucks just to do that.
Speaker A:And it's gone now.
Speaker A:We have some other ones, that couple of young guys up in Vancouver called Smokin Oak.
Speaker A:They've done a tremendous job.
Speaker A:One of the guys comes from Texas.
Speaker A:They're both under 40.
Speaker A:They.
Speaker A:They work hard, Smokers are out front.
Speaker A:Even when Covid hit, their business went from in house dining exploded into takeout.
Speaker A:I mean, they just.
Speaker A:They were almost working harder doing the takeout because there was such a demand for it than they were when it was, you know, in house dining.
Speaker A:So.
Speaker A:But is there room for more here?
Speaker A:Oh, yeah, yeah.
Speaker A:It's.
Speaker A:You know, most people don't think of the Portland area as a large metropolitan area.
Speaker A:But we've got, between Portland, Vancouver, we've got a couple million people.
Speaker A:So there you go, you know, can't service all those with, you know, one rib shack, so to speak.
Speaker B:Yeah, I think barbecue will just continue, I agree, to get bigger and bigger.
Speaker B:Yeah.
Speaker B:Ten years ago I may have a little less optimistic about it, but.
Speaker B:But now just the momentum just seems to be growing behind it.
Speaker B:There's more money behind it.
Speaker B:The restaurants are becoming more professional operations, I think, by and large, bigger, larger scale operations, both from the chains, but also from what I call the well funded independence.
Speaker B:I think you'll see a lot more variety in barbecue.
Speaker B:It was interesting, Daniel Vaughn, when he did his top 50 barbecue joint list just recently for Texas Monthly, is talking about how just making really good slices of brisket is, doesn't, is doesn't separate you from the crowd anymore.
Speaker B:It's like everybody makes a great, you know, a great brisket.
Speaker B:So now everyone's having to do something new and different.
Speaker B:So I think you'll see a lot of variation, experimentation, as each restaurant tries to do something to differentiate themselves, to stand out on social media, which is increasingly driving stuff and have those big wow plates and to bring all those fusion elements we were talking about into, into barbecue.
Speaker B:So I don't know what it'll look like, but I think it'll be very different and very bigger and even more diverse in five years than it is now.
Speaker C:It'll be fun for us.
Speaker B:Yes, definitely.
Speaker B:Think there should be a lot of good things to eat.
Speaker A:And I can expand my universe.
Speaker A:I don't think it needs too much more expansion.
Speaker A:It needs to get part of it to go into the black hole and not come out.
Speaker A:Anyway, Robert, it's been great.
Speaker A:Again, tell us about your book really quick and when it's going to be out.
Speaker B:Yeah, the book, it's called the Lost Southern Chefs and It'll be out February 15th.
Speaker B:It's from the University of Georgia Press, but you can get it Amazon or any of your favorite booksellers near you.
Speaker B:At least you can within a month or so.
Speaker A:And you've got my address right for my book.
Speaker C:And Happy Valentine's Day to me.
Speaker B:I'll write that down.
Speaker A:Okay.
Speaker C:So are you doing a lot of traveling, Robert?
Speaker C:Are you just sitting tight as of now?
Speaker B:Sitting tight.
Speaker B:I was out and travel.
Speaker B:I had a very busy festival season from say, May till through November of this past year.
Speaker B:I was traveling a good bit.
Speaker B:Helped host a barbecue festival here in Charleston.
Speaker B: have anything booked yet for: Speaker B:As far as sitting in, it's hard.
Speaker C:To book things when they're gonna fall apart.
Speaker B:Right.
Speaker B:Watching in waitings.
Speaker B:Hopefully we'll get back out there when the weather warms up, but I'm anticipating just sort of sitting tight for, you know, through the winter at least.
Speaker A:There you go, Robert.
Speaker A:Thank you, Leanne.
Speaker A:Thank you as always, my dear.
Speaker A:We'll be back next week with another edition of After Hours here on Barbecue Nation.
Speaker A:Until then, turn it, don't burn it.
Speaker A:And go out and be nice out there.
Speaker A:Would you?
Speaker A:People be nice to each other.
Speaker A:Take care.
