One recent afternoon in South Boston, a woman with a headset ran a meeting on Zoom from Shy Bird, toggling between two screens she’d set up on the table of her booth. Across the room, amid the scent of rotisserie chicken, a half-dozen colleagues clustered around another table staring at their MacBooks. They’d been there for six hours.
Around the corner, Irene Li’s team at Mei Mei was finishing up another production cycle. One worker scrubbed down the $30,000 automated dumpling folding machine, while another pushed a cart of just-packed containers into a massive cooler. Meanwhile, on the other side of the storefront’s huge glass wall, diners tucked into plates of dumplings. The sun was setting, and time was ticking: The entire operation was shutting down at 6.
The two restaurants are not all that alike, at least to the casual guest. But three years after the start of the pandemic, they are both indicative of just how much the restaurant industry has been reshaped by COVID.
Prior to the pandemic, about 90 percent of full-service restaurants in the United States generated 90 percent of their revenue using just a single method: sit-down dining. But the pandemic forced a reinvention. Today, 87 percent of restaurants plan to expand their “non-core” offerings — bottling sauces, selling retail goods, offering cooking classes — according to a recent survey from the payment system Square. The survey respondents also reported that 20 percent of their revenues are currently coming from products and services, instead of dining alone.
“In an uncertain economy and an increasingly competitive business environment, businesses are realizing the importance of multiple revenue streams,” the report found.
So maybe a restaurant can be a factory now. Perhaps it’s also a co-working space. And a retail storefront. They’re “multi-hyphenate business models” to use Square’s phrasing, and their methods are varied. But that’s increasingly the point. They’re seeking to answer a question prompted by the pandemic about what a restaurant is, and what it can become.
“When we opened Mei Mei, so many years ago, it was about running an experiment,” said Li, who got her start with a food truck. “And in a lot of ways, we’re still doing that.”
During COVID, the Fenway restaurant that became Li’s mainstay was struggling. So she shut it down to build a dumpling factory with table service instead. It opened last month, with big manufacturing capacity, space for classes, and limited dine-in hours: Thursday through Saturday, noon to 6 p.m. That’s a reflection of what her workers want, and of a drastically different business model.
Li estimates that in a few years, her dumplings will be in freezer cases from coast to coast, and the wholesale business will account for 80 percent of her revenue.
“Now we’re putting manufacturing like right at the center of what we’re doing rather than having it be a side project,” she said. “This feels sustainable in a way that, you know, restaurant life is not.”
Eli Feldman’s “Work From Shy Bird” program is another pandemic innovation.
As the Kendall Square restaurant’s cofounder planned out its new outpost in Southie, he knew remote and hybrid work wasn’t going anywhere. And perhaps more importantly for his clientele — young people with roommates — he knew “working remotely kind of sucks.” So when the new Shy Bird opened last December, he created a tiered co-working concept that lets diners camp out on their laptops for the day: $23 gets you unlimited coffee and a breakfast or lunch item; $36 — the “All Day Affair” — tacks on an aperitif and snacks.
On a recent visit, Feldman toured a guest through the space. On the bar, beneath the racks of wine bottles, there’s a basket of Post-its, rubber bands, and pens. A small placard offers printing help to anyone who might need it. There are even whiteboards, extra chargers, and a set of second screens.
Co-working’s “not world-changing” in terms of revenue, Feldman said — it brings in 3 percent of the restaurant’s business — but it makes better use of his space and staff during the slow midday, and reclaims some of the elements that co-working chains coopted from restaurants in the first place, he jokes.
“It brings energy to the restaurant during this time,” Feldman said.
Shy Bird and Mei Mei are hardly alone.
Before the pandemic, said restaurant consultant Sara Fetbroth, independent restaurants typically dabbled in catering or private dining or partnered with a delivery service only after they became established. Now, she said, operators know they need a full slate of offerings out of the gate.
This is partly a measure of the times. Labor shortages and minimum wage hikes are dictating staffing decisions, while soaring food costs and supply chain woes cut into revenue. Typical dining hours and even nights of the week have been altered by hybrid work schedules. And inflation makes finding new sources of revenue all the more important.
In a recent survey, the Boston-based point-of-sale system Toast found restaurants are now offering an average of seven service models (things like takeout, dine-in, curbside, or drive-through). Some sites reported they used as many as 11.
“You can’t just think you’re going to open a cafe or coffee shop and that’s going to be the end of it; you have to be building in these layers to your offerings,” Fetbroth said.
There are examples of reimagined efforts cropping up all over town: Steel & Rye in Milton turned a former private dining room into a bakery that turns out loaves, Danishes, and scones six days a week. The beloved Cafe Sushi restaurant in Cambridge no longer offers dine-in seating, but relaunched in December as Cafe Sushi Shoten, a retail storefront with sushi takeout and Japanese pantry items. As the father of three young children, co-owner Seizi Imura said it made sense from both a labor and lifestyle perspective. “We do miss seeing guests,” he said. “But people want to be with their families.”
Shortly after COVID shutdowns closed restaurants in March 2020, Clover Food Lab launched a food box program — a quick e-mail to customers resulted in 900 signups — which they’ve continued ever since. Food box subscriptions now account for 25 percent of their business.
“We always wanted to be more of an omnichannel company,” said the chain’s founder, Ayr Muir. “The pandemic really accelerated everything. It became a question of how do you meet people where they are because people’s habits keep shifting.”
Business models have been evolving up the food chain, too.
In the early days of the pandemic, when their restaurant clients were closed, produce wholesaler Katsiroubas Bros. began selling vegetable boxes directly to customers. Last year, they spun out a new offshoot to the company, Morrissey Market, delivering its restaurant-quality meat, seafood, and produce to customers with a day’s notice. And now they’ve flipped the script entirely: instead of delivering produce to restaurants, Morrissey Market sells prepared meals from local outfits like Revival Cafe + Kitchen and Clover, providing an additional revenue stream to restaurants in the process.
President Torry Katsiroubas Stamm said 85 percent of the parent company’s business used to be delivering to restaurants. That’s now more like 70 percent.
“You used to think you were diversified if you delivered to the Cheesecake Factory and Sonsie,” she said. “Now you look and say, what else can you do?”