July 7, 2011

Competitive Restauranting: Running a Restaurant in San Francisco

Arnold & Porter Advisory

As proprietor of the acclaimed French Brasserie-style restaurant Absinthe, in San Francisco's Hayes Valley, Bill Russell-Shapiro is well-known for his success as a restaurateur. In addition to Absinthe, which recently made the San Francisco Chronicle's list of Top 100 Bay Area Restaurants, Russell-Shapiro's Absinthe Group also owns the adjacent Absinthe Private Dining for meetings and parties, Arlequin Wine Merchant, and Arlequin Café & Food to Go, which benefits from the same chef as Absinthe, Adam Keough, but offers his more casual fare at lower prices. In 2010, Russell-Shapiro and two of Absinthe's near-legendary bartenders, Jeff Hollinger and Jonny Raglin, restored the last of the Barbary Coast saloons in San Francisco's historic North Beach district and re-opened it as Comstock Saloon. Comstock was recently featured in GQ Magazine as #9 of the 25 Best Cocktail Bars in America, and in Esquire on its list of the country's best bars. We sat down with Bill and his Director of All Operations, Eric Vreede, at Comstock recently.

Q:So, what's new in the restaurant business?
A:Bill: We've just opened a new restaurant, Boxing Room, on Grove Street in San Francisco's Hayes Valley. We're serving Cajun-style food from a young Bayou chef, Justin Simoneaux, who came over from Moss Room at the Academy of Science with his General Manager, Zach Pacheco. When it comes to restaurants, San Franciscans have the best of it all - endless choices and high quality. Nobody has to go back where they don't feel welcome or didn't have a really good meal. That's a constant good pressure on those of us in the business. People want fair prices and they also often want experiences that are lively and fun. The pop-up restaurant scene reflects that, and is a cool addition to the basics of full-service restaurants.
Q:How did you get started in the restaurant business?
A:Bill: I was an urban planner very heavily involved in politics, and intending a career in that. My wife made me aware that I was giving time that should have been for our family to organizations, meetings, dinners and so-called strategy sessions. I gave it up and wanted to find other work; my lawyer (at your firm) introduced me to a fellow in the barbeque business who needed a partner with some organizational and business skills and financial resources. We ended up making a very popular BBQ sauce, originally in his bathroom sink, and I learned about the business hands-on in his 24-seat place at 6th Avenue and Clement Street. In other words, for me it was all by inadvertence, with only a stint running a college snack bar as background. But I learned by doing -- and by making mistakes.

Eric: I came at it the opposite way. I always loved and worked in restaurants. I had restaurant jobs in college, worked in a restaurant in Washington, D.C., after college, met someone who introduced me to the people who opened Post Ranch in Big Sur, and they brought me out to run the dining room there, Sierra Mar - (Bill: - where Eric built and oversaw the largest wine list in California, literally thousands of wines). That's where I met a friend of Bill's, who introduced us, and I moved up here in 1997 to help open, and then manage, Absinthe.
Q:What are the keys to a successful restaurant?
A:Bill: My highest priority is the well-being of those who work in our business. Everything else, quality of food, service, etc., is a product of good working conditions and respect for those doing the work. If they enjoy their work, you'll get better food and you'll feel it at the table. The quality of the food is, of course, very important, but customers must also be treated well, which means giving them what they want to the extent possible, including substitutions and off-menu items, with service that's both anticipatory and responsive, professional and unpretentious. The experience should be enjoyable - that's it in a nutshell.
Q:What are some pointers on ordering wine?
A:Eric: Don't hesitate to rely on the sommelier, but give him or her guidance, including price range. Least expensive wine tends to have the highest mark-up. It's fine to bring your own wine, too, but expect to pay a corkage fee. One of the great things about wine at Absinthe is that it charges only $5 corkage for wine purchased at Arlequin, our wine store two doors down.
Q:What are some of the latest trends in cocktails and can you share the recipe for one Absinthe or Comstock's signature cocktails?
A:Bill and Eric: We knew you'd ask that (handed us a note from Comstock Saloonkeeper Jeff Hollinger, which follows):

The latest trend in cocktails seems to be a return to simplicity and classics. More and more, cocktail lists are showcasing classic cocktails, such as Manhattans, Sazeracs and Corpse Reviver #2's. Comstock Saloon's list, for example, features only classic cocktails.

Below is a recipe for San Francisco's most important and historically relevant cocktail, the Pisco Punch. This drink was created by Duncan Nicol around 1893. Duncan was the last owner of a bar called the Bank Exchange & Billiard Saloon, located at the corner of Washington Street and Montgomery Street, where the Transamerica building now stands. Duncan's recipe was a secret, which he took to his grave. In honor of the secrecy of Duncan's recipe, Comstock Saloon has developed a tincture known as "Nicol Juice," which is a blend of high proof spirits, kaffir lime leaves and other secret ingredients.

Pisco Punch
1.5 oz Pisco
.75 oz Pineapple Gum Syrup
.5 oz Lemon juice
4 dashes Nicol Juice
Lemon peel, for garnish

Combine Pisco, gum syrup, lemon juice and Nicol Juice in an ice-filled shaker, and shake for 20 to 30 seconds, or until well chilled and frothy. Strain into a chilled flip or punch glass, add a single large ice cube and garnish with the lemon peel. Enjoy!
Q:What are some of the challenges that lie ahead for restaurants?
A:Bill: Providing quality and good value in an incredibly competitive environment while regulations and expectations add to costs. We in San Francisco pay people more than in any surrounding city, and with more benefits, and that's good; in fact, it's great. So we must find ways to fit that in with less than sky-high prices, and it's difficult. I'd hate to see people who live around our restaurants unable to afford to eat in our places. So we're trying hard to hold on to the less expensive parts of our menus, and to open places with varying prices. The highest quality simply costs more. It's interesting to see how menus that appear to offer great value often, for example, with small plates, end up with meal costs that aren't great value. I'm sure all our colleagues are doing what we're doing - trying to figure out how to navigate these conflicting goals. Our restaurants do it by offering occasional choices on portion size, maintaining a part of the menu that is simply not expensive, while others parts are, and finding unusual cuts and sources that permit value pricing based on creativity, not reductions in quality. Our wine store Arlequin does the same.

Eric: The restaurants that I admire are very food focused and rely on the fundamentals that I believe are essential for restaurants to excel: quality ingredients, a thoughtful wine/bar program, a knowledgeable staff, and the right timing and pace for the occasion. The challenge is maintaining all that quality while meeting costs and fees that rise and rise – when menu prices cannot.
Q:Aside from your restaurants, what are some restaurants in the Bay Area that you like to frequent?
A:Bill: Prospect, Swan Oyster Depot, Canteen, Cotogna, Lupa (on 24th Street), Oliveto (in Oakland) and Poggio (in Sausalito).

Eric: Delfina, Cotogna, Piccino (in the Dogpatch Neighborhood), Range and Slanted Door.
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