How do you operate a popular restaurant in NY?

I must confess that I am a fan of Balthazar. For those who have not heard the name, it is a french brasserie in the SoHo neighborhood of New York. I think their onion soup is sublime, fries are delicious, and profitroles are absolutely the best. However, this is an operations blog, so, here fittingly comes an article from the NY Times magazine, nicely describing why Balthazar is so good.

For starters, I knew that the restaurant business is extremely competitive and labor intensive, but this article is eye-opening in a few aspects. First off, the restaurant is literally a 24 hours a day operation:

For now, everything is quiet at Balthazar. The last guests from the night before left just a few hours ago, and the nighttime porters are still finishing their thorough scrub of the restaurant. But the delivery trucks are starting to arrive all over again, idling on Crosby.

Second, the sheer volume of the food they serve is impressive:

By the end of the day, the rotating staff of six cooks behind the line will have produced 111 steak frites, 90 French onion soups, 88 Balthazar bar steaks, 69 burgers, 68 omelets, 62 goat-cheese tarts, 56 chicken paillards, 51 chicken clubs, 48 seared salmon fillets, 46 heirloom-tomato salads, 45 sides of fries, 44 chicken-liver-and-foie-gras mousses, 43 duck confits, 40 grilled dorades, 39 steaks au poivre, 39 eggs Norwegian, 38 steak tartare appetizers (plus 16 entrees), 32 escargot, 32 moules frites, 29 grilled trout — the list, pulled from the P.O.S. terminals, goes on and on and on.

 

The day referred to in the article is a relatively slow one with 1247 people eating there (normally it is 1500). Mind you that the restaurant has only 180 seats, so the table turnover is essentials. Accounting for less than 100% utilization, each table has to be turned about 10 times, multiplying that by 90 minutes average dining time means that all tables are completely busy for 15 hours a day!

Third the margins – here we can get only an estimate, but it is impressive:

During the busy season, Balthazar spends $90,000 a week on food to feed some 10,000 guests.

So the cost of food is $9 per customer. Average check I reckon, is no less than $50. That does amount to a quite a markup, that allows decent pay for waiters, food runners and bus boys.

The key to all of this – is, not surprisingly, a careful process design:

Step 1 begins at about 6:30 a.m., when Diógene Peralta and Ramón Alvino, the prep cooks in charge of potatoes, each grab a 50-pound case of GPODs, from the Idaho company that sources Russet Burbank potatoes, known for their consistency, and place a massive plastic tub on the floor behind them. This morning, Alvino is flying, his left hand’s fingers imperceptibly rotating the potato between upward strokes of the peeler, blindly flipping the naked spuds over his shoulder into the tub. I pull up my phone’s stopwatch to time him for a minute, treating each potato as a lap: his slowest is 10.7 seconds, his quickest 6.4. … The potatoes that are peeled today won’t be fried, actually, until tomorrow, and then refried — but that’s another guy’s job.

 

The same goes for steaks, all of them are cut and pounded to the same size to simplify timing at the grill. Another layer of process design comes from the menu:

…the menu was created to distribute work evenly without creating a pileup. The plat du jour, for example, is rarely a grilled dish because the grill station is already so busy with steaks and burgers. “The menu was written for balance”

Despite all of this and Balthazar being a “well-oiled potato-chipping machine” I still like it a lot. But the power of good process design cannot be overestimated.

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2 thoughts on “How do you operate a popular restaurant in NY?

  1. As a resident of the Northeast, I visit New York City fairly frequently for dinner. I have never eaten at Balthazar, but I definitely understand their “machine-like” operating style. Looking at the menus of places, you can tell that many of the options utilize the same basic ingredients, just prepared in a different way. Additionally, the bulk of the variation of dishes comes with the sauces, because it is easier and cheaper to produce large quantities of sauce as opposed to keeping many different ingredients on hand.

  2. I find it very interesting to see how important operations management is in the restaurant industry. This industry is so competitive and Balthazar must work practically 24 hours a day to maintain its competitive advantage. As a consumer, I find it surprising to learn how logistics plays such a vital role. The bottleneck of this process seems to be the seating capacity of the restaurant. I am wondering if Balthazar ever compared the effects of increasing seating capacity to reduce the pressures to turn tables at such a rapid pace.

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