Profits, Non-Profits, and The Dream of A Better Way: A MAD Monday NYC Recap

“If you’re an independent restaurant owner, and you’re working 80 hour weeks, and you’re trying to make payroll and you’re stressed out of your mind, and your family’s mad at you because you’re never home, there’s very little time or energy or resources at the end of the week to go, ‘hey, let me work on zero plastics in our restaurants.’

You could almost feel the breeze generated by so many heads nodding in agreement with Edward Lee’s words. The chef of 610 Magnolia and co-founder of The Lee Initiative had just given voice to the frustration of an audience whose members wanted to make their restaurants socially and environmentally sustainable but also needed, um, to stay in business.

Can a restaurant really do well and do good at the same time? That question lay at the heart of our recent MAD Monday. Co-hosted with YETI on a warm summer night in Brooklyn, the debate brought Lee together with writer Mark Bittman and restaurateur Erin Wade to discuss whether–and how—an industry with notoriously low profit margins and notoriously high failure rates can also reduce its carbon footprint, eliminate food waste, ensure its workers are treated equitably, and remain open and responsive to its community’s needs.

When moderator Jamila Robinson, editor in chief of Bon Appétit magazine, opened the discussion by posing the good-and-well question directly to the speakers, each one answered affirmatively, which would have made for a pretty boring debate had it not quickly become clear that their versions of ‘yes’ held varying degrees of tentativeness, honed by first-hand experience.

“The answer is sure,” responded Bittman. “But the question is to what degree?”

In fact, Bittman has enough doubts that he’s trying to take the need to make a profit out of the equation all together. As a journalist who has long covered all of the  health, environmental, and social problems surrounding food, he began during the pandemic to imagine solutions. “I wanted to see if I could put together a restaurant that did everything right,” he explained.  “Source great food from great farms, and treat workers up and down the food chain right. Pay a living wage. Cook really good food. And make it accessible to everybody.”

It’s that last point in particular that drives him. Because he believes passionately that nutritious food should be a right, just like public education, Bittman designed his values-driven restaurant to operate on a sliding scale, with those who can afford to pay more doing so. Which means, almost necessarily, that his Community Kitchen will have to be a nonprofit. “Restaurants have enough trouble making money as it is, but if you’re gonna start selling food on a sliding scale,” he said, “Then you have a real issue.”

At the other end of the spectrum, Wade had the fewest doubts that the two goals could be reconciled. As the co-founder of Homeroom, a Bay Area restaurant specializing in macaroni and cheese, she has proven that progressive leadership and worker equity can go hand in hand with profit. “A lot of what is broken particularly within restaurants is you have these very outdated values that  are about winner-take-all versus collaboration, cooperation and meaning,” she said. Intent on doing things differently, Homeroom adopted practices  like open book management and restorative justice that encouraged collaboration and gave workers agency–and did so while pushing the company’s  financial performance to the top 1% of restaurants. ”I don’t think it’s true that doing good and being profitable are really at odds,” she said. “But they have to be in conversation with each other. And that takes a lot of extra work and thoughtfulness.”

In this particular conversation, Edward Lee fell somewhere in the middle. Although he has several successful restaurants under his belt, he is also launching an ambitious non-profit one in Washington, DC because he has aims for it that can’t easily be met with a conventional business model. “There are many restaurants out there that are doing good and doing well,” he said. “But the difference between them and a non-profit like this one is intentionality.” Instead of focusing on making money, he added, “our main focus is on data and research.”

The restaurant, which does not yet have a name, will be fine dining, but has goals that go far beyond Michelin stars. “It’s built around three pillars,” Lee said. “Zero gas emissions, zero plastics, and waste reduction.” Reaching each of those goals is intended to be a gradual process driven by the team’s own research, which it will then make available to other restaurants. With plastics, for example, Lee intends to ban single use from day one, and experiment with ways of getting rid of the rest entirely. “We want to not just do it but show you: how much does it actually cost; what processes did we use; what worked, what didn’t work, where did we fail, where did we succeed? How much extra labor does it cost to do these things? My thinking is we’ll go to the extreme, and let you decide. If you only want to do 10% of what we did, fine, that’s better than nothing. We’re going to show you the breadth of what we can do and then leave it up to you.”

Although the new entity will be non-profit, “we have to model the restaurant to be profitable,” Lee said. “Otherwise it’s a stupid experiment.” But having the immediate pressure of turning a profit removed will allow the project, he believes, to make the kinds of changes that take time to work, like banning tipping—another one of his plans for day one.

Yet going nonprofit hardly frees a restaurant from harsh financial realities. Just like Wade, who could get no one to invest in Homeroom at the start (“not even my parents!” she said with a laugh) both Bittman and Lee are facing obstacles coming up with the funding for their projects. In Bittman’s case, a self-confessed lack of understanding about what kind of help–and how much money–he would need to launch Community Kitchen has meant the project is still “at least a year out” from having its first location. For Lee, the label itself generates problems. “People hear ‘non-profit’ and they think it’s a soup kitchen,” he said. “You can see their eyes glaze over.”

A key component of his initial concept also proved an obstacle. After co-founding The Lee Initiative with Lindsey Ofcacek several years ago to help train women for leadership roles in the industry, Lee intended the new restaurant to similarly platform women by putting them at the helm of a high-profile kitchen. But he discovered that few investors were interested in chefs they had never heard of–especially female ones (who statistically face much greater difficulties attracting investment than their similarly experienced male counterparts). “I have to say the last four months have been the hardest time of my career,” he said. “I probably get 30 or 40 no’s for every yes.” At the moment he is therefore pivoting, he said in a separate interview, toward opening the restaurant himself, with a succession plan that will still advance women chefs.

Both Bittman and Lee’s projects are intended to repair some of the industry’s larger problems simply by showing it can be done. “A lot of people are  following the wrong paths, because they don’t know of different paths that they can follow,” Bittman said. “They think, ‘oh we’ll never have a regenerative sustainable food system because you can’t make money that way’ or because you need chemical fertilizers to grow lots of food, or the United States needs to feed the world, all this other bullshit, which is not leading us in the right direction. So what’s the right direction? Well, we don’t know. But like Edward said, we’re just going down a path that looks like it might be promising. And if we need to make adjustments, we make adjustments.”

For her part, Wade thinks that kind of project can fill an important role. But she cautions against relying too heavily on nonprofits. “I think that fundamentally, the thing that will make the greatest impact is having businesses that are sustainable, and that also make money. That’s how you’re going to get the most change in this world.”

Asked how to fix an industry in which doing good can frequently seem at odds with doing well, the panelists floated different ideas, from showcasing businesses that are doing things right, to stronger government  regulation. But they all agreed that education was key. “I don’t know about you guys, but I never learned anything about business ever,” Wade said, questioning why chefs and restaurateurs weren’t getting the education they need. “What does it mean to teach people to be financially literate? What does it mean to teach people how to be self sufficient? And how to open a business? This is what drives our industry. And yet we don’t teach people how to do it.”

Lee, who intends to provide that kind of training for the staff at his nonprofit restaurant, heartily agreed. “I think it’s criminal that young kids pay incredible amounts of money for cooking school,” he said. “They’re taught to turn carrots into flowers, but they are not taught P&L sheets.”

None of the panelists—or the audience, for that matter— believed that  achieving the kind of change the industry needs is going to be easy. But by the end of the evening, a shimmer of hope floated through the audience. “To try and move this huge industry of independent restaurants is an incredibly difficult task,” Lee said. “But change doesn’t happen because one person or one policy waves a magic wand. Change happens because millions of people do millions of tiny things. That’s what creates momentum.”

Illustration by Sofie Kampmark.

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