.How Santa Cruz Restaurants Are Navigating Tough Times

Restaurants are suffering right now, the places where people rendezvous, where people go to spend time with friends, eating, drinking, hanging out. The heart of our community. Places that can no longer conduct business as usual.

Many have decided to shut their doors and ride out this storm: Bantam, Vim, Verve, the Bagelry, Oswald, Shadowbrook, Cafe Cruz, Gayle’s. Others are staying open however they can, hoping to keep employees solvent and their business alive.

A lot of people, even in a sophisticated town like Santa Cruz, might not be aware that the restaurant industry is the second largest private sector employer in the country. Or that in 2019 California’s restaurants boasted sales over $100 billion, and provided 2 million restaurant and food service jobs. That figure will plummet this year. The National Restaurant Association last week estimated that as many as 30,000 California restaurants could close permanently because of the virus-related closures and widespread layoffs.

We can grasp the impact for the waitperson in the restaurant, the barista in the coffee shop, the fry cook in the fast food shop, and the chefs we glimpse in the kitchen. But the people in danger now from restaurant shutdowns aren’t just chefs and waitstaff. They include kitchen workers, winegrowers, cleaning services, bakers, janitors, bookkeepers, recyclers, bar suppliers, and especially the huge network of food suppliers. That means growers, fieldworkers, truck drivers, and farmers. In a community like ours, surrounded and fed by organic farms, it’s not only a large network—it’s personal. They are family.

Even the earthquake of 1989 is dwarfed by the exponential fallout of this current crisis. We asked seasoned veterans of our local food business to explain the hidden costs of the current shutdowns; they asked to remain anonymous when doing so due to the fragile nature of everyone’s businesses right now.

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There’s a social aspect to the toll on the dining scene. Without social interaction—the freedom to chat with the bartender, to share plates, to meet and greet friends in a cozy atmosphere—dining experiences flatten. Barceloneta, a relatively new tapas restaurant in downtown Santa Cruz suspended operation early on in this crisis. Sharing food, drink, and conversation pretty much defines tapas.

New restaurants are going to struggle, one chef/owner veteran of the restaurant trade notes. They don’t yet have a “baked-in” clientele, and they have initial debt incurred to set up in the first place. Table service restaurants are having a harder time, he believes, while more traditional to-go restaurants, with less square footage and fewer tables, may be able to adjust more easily.

A small business may have an advantage in terms of a lower overhead, but their resources for creating revenue to meet that overhead are also smaller, notes the owner of a tiny carryout cafe. There are several other factors that might increase resiliency—the type of cuisine, and its adaptability, for example. A larger business would be more vulnerable in terms of staff reductions and fresh inventory losses. She has been able to retain her small staff thus far. “That is why I am staying open, to get them a paycheck.” Otherwise, she notes, unemployment is the only option. Shuttered restaurants have been feeding their laid-off staff and giving them remaining inventory.

The impact of all this is tremendous—and not simply on the restaurants, but for those out of work who live paycheck to paycheck. The high rents in Santa Cruz bode worse for those who will try to live on unemployment. The creative solutions restaurant folks are scrambling to put in place take extra energy and induce extra stress. Those who rely on in-house dining have the hardest path. Even if things went back to something like normal in a few months, catching up might no longer be possible for businesses that run on a very small margin. Many restaurants will be closed permanently when we all wake up from this bad dream.

The owner of a landmark restaurant is considering options. “Not knowing the full impact that closure would have and how long it and its aftermath will endure, we chose to plan for but not to initiate new services for to-go pickup or delivery. It’s too early to determine if we stay out of that arena or jump in.”

Trying to help as many of his 140 employees as possible, he says he can’t continue it forever. The fine-dining segment of industry needs a big staff, he explained, to provide the expected services of food, beverage, ambiance and overall experience. That includes receptionists, website monitors, janitorial personnel indoors and outdoors, office staff, hosts, food servers, bussers, bartenders, pantry workers, cooks, dishwashers, and maintenance staff. And the supporting businesses include meat and seafood suppliers (and those that fish or butcher for them), vendors, farmers, produce companies, lounge musicians, liquor companies and wineries, and linen suppliers.

At one coffeehouse cafe, changes have come swiftly. Some product is made in-house, other foods are purchased from outside suppliers, all of whom, including landlords, will be impacted by the downturn in business. Kitchen operation has been reduced by over half, the owner says, which means eliminating positions and reducing hours amongst the people who need the money the most—the ones working two and three jobs to support families. It’s tough to know how the retail landscape will settle in over the next months and years. The hospitality industry is the lifeblood of a tourist beach town. Any degradation in the vitality of that industry will affect our quality of life.

Fine dining and on-premise alcohol retailers might be particularly vulnerable, he notes. The experience of being there—eating and having cocktails in-house—is the large part of what patrons desire.

A winemaker who also grows his own grapes has reduced his operation to immediate family plus three longtime crew. Farming does not stop, he points out, and for that he needs extra workers. He cannot shut down to conserve cash.

“We have to farm,” he says.

He has restaurant accounts, too, and “if they’re not doing any business, we’re not doing any business. And right now we are both not doing much business. We are doing about 50% normal business and still paying out 90% normal payroll.” He says he cannot continue like this.

One bright spot in the supply chain miasma is the online purchasing strategy being used by more and more restaurants, and organic growers. Popular with people who feel uncomfortable venturing out of their houses, the online buying/delivery option is on the rise. “I really think that this pandemic is moving everyone over to online shopping and we will be different at the end of this,” a top local organic grower says. He is currently experiencing “crazy demand with online ordering and farmers market pickup or home delivery that we had not been tapping into before. We should have done this years ago,” he says.

The downside is that his orders from restaurants are down by 95%, and even though online orders and deliveries are up, he’s worried about the exposure his employees have with market and field work.

Things are changing. Fast. And we’re learning to think in a whole new way about our food, how we consume it, and what it means to us. So support this town’s dining scene by patronizing the restaurants listed here that are continuing to provide takeout during the quarantine. And when this is all over, we’ll all go out to eat!

Coronavirus Coverage

For continuing in-depth coverage of the new coronavirus and its effects locally, visit goodtimes.sc/category/santa-cruz-news/coronavirus.

To learn about action you can take now, whether you’re seeking assistance or want to find ways of supporting the community, visit goodtimes.sc/santa-cruz-coronavirus-resources.


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