Recipe for Success

More than 300 restaurants have opened in metro Detroit since 2014. Can they all survive?
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The Roman Village restaurant has been thriving for well over 50 years. Family owned and operated, it opened in Dearborn in 1964. Other locations have been added over time under the name of Antonio’s Cucina Italiana — in Dearborn Heights, Farmington Hills, and Canton Township — and another one is slated to open in Livonia this spring.

Antonio Rugiero, CEO of the restaurant group, and one of four sons of the late owner, says there’s no secret to the success of his restaurants: It comes from hard work and a philosophy his father drilled into him when he was nine years old and began working in the family business. “My dad’s mentality was if you want it done right, you have to do it yourself,” he says. “Our message is it’s traditional, old-school recipes that have been handed down, and people love it.”

Just to be sure the operation runs smoothly, Rugiero’s mother, affectionately known to all as Mama Rita, is still very active in the kitchen. “Mom goes from store to store,” Rugiero says, “and she can open up a pot, smell or taste a sauce, and tell you if it’s right on the money or if there’s something wrong. After 52 years, that sauce hasn’t changed.”

Nowadays, Mama Rita’s sauce and the entire menu have a lot more competition to reckon with. “I remember the days where no one would go to downtown Detroit to open up a restaurant,” Rugiero says. “They were worried there was no traffic, the crime, whatever the reasons may be. Now it’s flipped.”

Has it ever. According to one estimate, more than 300 restaurants have opened in metro Detroit in the last three years. Another report concludes that as many as 35 dining spots have opened in downtown Detroit alone since the beginning of 2016. Surprisingly, there’s no way to glean any official statistics in a geographical area or category of food consumption, specifically fine dining.

A representative for The NDP Group, a market research company that’s been tracking the food service and restaurant industry for more than 40 years, says, “We only have a full-service count. We don’t break out fine dining because much of fine dining is independent, and the category may be underrepresented. Fine dining only represents 1 percent of industry traffic.”

The National Restaurant Association, the world’s largest food service trade organization, only provides an overview of the restaurant industry in each state. The most recent numbers for Michigan are as follows:

16,110 “eating and drinking place locations”in 2015;
322,600 employees;
$15.4 billion in projected restaurant sales in 2016;
421,500 restaurant and food service jobs in 2016, which is 11 percent of employment in the state;
By 2026, that number is projected to grow by more than 10 percent, which would add 43,600 additional jobs, for a total of 465,100 positions.

Antonio's Cucina Italiana
The restaurant sector has been a bright spot in metro Detroit’s economy in recent years. The offerings include Parc at Campus Martius Park in downtown Detroit, above; Antonio’s Cucina Italiana in Canton Township, pictured; and Bill’s in Bloomfield Hills; below.

It all means that the restaurant business in Michigan is booming — which is anything but a surprise to Jerry McVety, who launched his Farmington Hills-based food service consultancy more than 30 years ago and believes Detroit’s growing reputation as a destination for fine food and dining is long overdue.

“We’ve had great restaurants for years,” he says. “We just haven’t had recognition because the east and west coasts really dominated the culinary scene. But it’s not happening anymore. There’s a couple of reasons. Of course, the economy’s good in Detroit; the auto industry is really thriving. But also, I think we have more foodies in Michigan than ever before. We’ve got people who have more desire to eat out and try different things. 

“A lot of Generation Xers don’t have kids at home anymore,” he adds. “There are also empty-nesters, finally free of their kids being home, and this is a big thing for them, going out to eat. It’s easier for them. I know some couples that eat out every night at a different restaurant. And the millennials, that’s their lifestyle. They work. They eat out. That’s the whole thrust of who they are and what they enjoy.”

Ron Hoffman, whose Grosse Pointe marketing firm specializes in the hospitality sector, says a longstanding recipe for success has helped restaurants. 

“I look at the restaurant business in this city just like the auto industry,” he says. “They were failing. Why were they failing? Because they thought they knew what product the consumer wanted, and that’s what they kept manufacturing. Pretty soon the consumer wasn’t buying it. So they regrouped, put out a product that the consumer wanted, and guess what? They flocked to the front door. Same with the restaurant business; they’re finally listening to what the consumer wants.” 

It turns out that many of these newborn foodies are also inspired by what they’re seeing on an array of cooking and chef shows on The Food Network, among others.

“They’ve changed the whole road map of the culinary world,” says Bill Roberts, proprietor of the Roberts Restaurant Group, which features six fine dining destinations in Oakland County — Town Tavern, Bill’s, Streetside Seafood, Café ML, Roadside B&G, and Beverly Hills Grill.

“It’s a hard job, but all of a sudden it became glorified on TV. And when we had that great slowdown in 2008-09, you had a lot of people losing their jobs and, as time moved on, they decided to become entrepreneurs. You know, food is the original ‘Ma and Pa’ kind of a business. Everybody cooks, everybody likes a drink, everyone thinks they can do it better than what they see.”

Bill's

But the cold, hard truth is they can’t. 

A recent study by CNBC concluded that around 60 percent of new restaurants fail within the first year, and nearly 80 percent shut down before their fifth anniversary — which means the vast majority of recently opened restaurants in metro Detroit are challenged, for a variety of reasons, starting with a lack of experience. 

“The economy is strong,” says chef Zack Sklar, “and I’m getting calls every week from a lawyer, a doctor, a real estate guy, and they all want to be in the restaurant business. They see it’s appealing, it’s sexy, and it’s fun. And they’re going to get their buddies together and put a million bucks into this or that. And everyone thinks, how hard can it be? … They don’t realize it’s the hardest business there is, and the reality is most people aren’t cut out for it.”

McVety agrees. “Many people get in the restaurant business,” he says, “and they put every cent they have into building the brick and mortar and then they don’t have enough money to put in the register to make change for the first sale. You can’t do that. You’ve got to go in with an understanding that it’s going to take a while — and I mean a while, nine months to a year or 18 months — for you to really be profitable.”

So how does anyone stay in the game? 

Sklar and his team at Peas & Carrots Hospitality in Bloomfield Hills operate four local restaurants, including Social and Beau’s Gallery.

“We are super dialed into our customer base,” Sklar says. “At Beau’s, one of the early complaints was it was way too noisy. So we must have spent $12,000 on noise issues. Then the portions were too small, the prices too expensive, (the) menu (was) hard to read. We fixed it all. It’s all about the people who are signing your paycheck — the customer. My sales for Beau’s are up 50 percent from last year. Fifty percent! That’s unbelievable. It’s because we changed the menu (and) we listened to our clients. And so certain restaurants you can fix, other restaurants you close.”

Sklar has had that experience, too. Au Cochon, his French-American restaurant in Birmingham, closed last November, just over a year after it opened and only a few months after the shuttering of its sister restaurant, Arthur Avenue, which lasted 11 months.

“We thought we had two really great concepts,” Sklar says. “Reviews were phenomenal, people loved the food, but we didn’t have the traffic and I don’t know why. But that’s just business. When we first started, we opened up if we just felt good about an area and thought there was a niche. Now we’re actually putting together what we call our location calculator, which takes all these different things into account and spits out a score. So there’s a plethora of things we do. You just gotta have more winners than losers, that’s the key.”

London Chop House
The London Chop House in downtown Detroit has benefited from a nearly $300-million renovation of Cobo Center, thousands of new office workers, and added attractions. // Photograph by EE Berger

Other restaurants that have closed in recent months include La Rondinella in Eastern Market and Coach Insignia atop General Motors Co.’s world headquarters at the Renaissance Center (the lease expired on Feb. 28). Detroit-based Epicurean Group, which operated Coach Insignia, is looking for another location in Detroit for a restaurant, and will open the Nomad Grill in Southfield in March.

Another notable restaurant that closed in recent weeks is Tre Monti, located along Big Beaver Road in Troy. Owned and operated by the San Marino Club, a new restaurant is planned for the space by the end of the year. 

Apart from closings due to misjudgments in the marketplace and expiring leases, developing and retaining a reliable staff is critical to a restaurant’s long-term success, says Justin Near, president of Near Perfect Media, a public relations, marketing, and branding firm in downtown Birmingham. His company represents 20 different restaurant brands that, collectively, have more than 65 locations in southeast Michigan.

“Everyone’s shorthanded right now,” Near says, “so it’s hard to retain quality staff while maintaining a standard of service that any restaurateur would want for his establishment. There’s also a lack of training, so combine that with the shortage of chefs, as well as applicants for every other position, and it hurts the quality of the guest experience. Proper training, for both the front and back of the house, is going to be a big factor in who makes it. And with the glut of very similar concepts, these restaurants are going to have to make themselves stand out, and the service side is the way to do it.”

Of course, Rugiero has known that for most of his life.

“The owners of these corporate (restaurants), they’re betting on a concept,” he says. “And as many of them open, they fail and they’re closing left and right. And it’s because they’re corporate. They base everything on numbers and percentages, and if things aren’t looking right, they just shut the doors. 

“We don’t do that. In a family business, we work through it. You tighten the dough, and you make adjustments. You figure it out and work with it until you get it right. The competition is good. It makes you work at making sure you present the best you can and that your food is top-notch.”

What Rugiero neglects to mention is his secret weapon: The demanding and exacting presence of Mama Rita, ensuring every item on the menu is executed to perfection. “Otherwise,” he says, laughing, “you’ll hear her yelling in the kitchen, she’ll throw a fit. But you don’t cut those corners. At the end of the day, it’s the consumer. The customer knows.”


Lunch, Anyone?

Restaurant consultant Ron Hoffman is excited that Detroit is finally coming into its own as a culinary destination city, like New York City and Chicago.

“We’re getting there,” he says, “but we’re not there yet because we still don’t have the lunch trade, and if you can’t do lunch, it’s very hard to make money in this business. You gotta have the lunch trade to pay your fixed costs and make your money on dinner.”

Or you can just focus solely on lunch, like Zaid D. Elia, who opened The Fountain Detroit last spring in downtown’s Campus Martius Park. 

“It’s a 40-foot shipping container that we converted into a full bar and restaurant,” he says. “It was the first venue that we opened in Campus Martius Park and it became nationally ranked as a power lunch spot. We served over 125,000 customers in a three-and-a-half-month period.”

The Fountain Detroit will again be open for business this spring, and the expectation is that last season’s attendance numbers will be matched, if not exceeded.

Elia is also co-owner of Parc, a restaurant in Campus Martius that focused on the dinner crowd when it opened late last year, before introducing a lunch option in January.

“It started off awesome and it’s going to build very strong as we promote it,” Elia says. “A great lunch business is predicated upon convenience, affordability, and overall time. In today’s market, office employees don’t have the traditional hour lunch break that they had in the past. So from the time they sit down to the time the food has to arrive at the table in a fine dining establishment like ours, it’s around 23 minutes.”

Serving speed is critical, but that’s only part of the equation.

Joe Muer Seafood
Joe Muer Seafood has been a mainstay at the Renaissance Center in downtown Detroit. In April, a Joe Muer Seafood will open inside the DoubleTree by Hilton in Bloomfield Hills.

“Location is everything,” Elia says of Parc. “(It’s important to be) in the center of it all, where people can come down from their office and shoot right back up when they’re done. They don’t have time to park their car, go into the restaurant, wait to be seated, eat, get their bill, get back in their car, and drive back to their office. Having 50,000 or so employees within one block of your location is key.”

Joe Vicari, CEO of Andiamo Restaurant Group in Warren, says restaurants located along high-traffic corridors or set in urban districts are more expensive to operate, but it’s worth the investment. He says the secret to his longevity — he opened his first eatery, a Ram’s Horn in Warren, in 1984, and his first Andiamo in 1990 — is due to quality food, sterling service, and consistency.

“What I hear from most people when they come to an Andiamo’s or a Joe Muer Seafood is they know what to expect,” he says. “The food and service is very consistent, and there’s not a lot of surprises. The second thing is to always maintain a high standard of quality. We continue to buy the best product, and all of our core items are made from scratch. We make all of our pastas by hand at all of our restaurants. We age our meat and cut our own steaks, and when the economy got hard, we never changed. We continue to provide the same quality food, no matter what.”

With 10 Andiamo locations in the region, and one in Las Vegas, Vicari isn’t slowing down. In early April, he plans to open a Joe Muer Seafood at the DoubleTree by Hilton Detroit Bloomfield Hills (formerly the Kingsley Inn). The 250-seat restaurant will offer a raw bar, a sushi bar, a piano bar, private dining space, aquariums, and an open kitchen. He says it will be just like the Joe Muer Seafood inside the Renaissance Center.

One other fine dining restaurant, which opened in February, hopes to take advantage of a location at 12 Mile and Orchard Lake roads that once housed the popular Tribute eatery. Called Chef’s Table XII, the new space includes a small bar, a walk through wine cellar, a spacious dining room with colorful murals, and a menu that offers steak and seafood.  

There are around a dozen entrees on the menu, along with six or so appetizers, two soups, and five salads. The wine list, meanwhile, centers on modern American selections.

The overall goal of a fine dining restaurant, Sklar says, is to ensure what is known in the business as “14 meal periods.”

“That means we have a clientele for lunch and for dinner,” he says, “seven days a week.”

Two reasonably priced meals every day and night of the week, for completely different customers. In the highly competitive restaurant business, that’s as close as it gets to a recipe for success.

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