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Sunday, 25 January 2009

Business Success Stories

Talking to Mario Batali

Chef Mario Batali discusses celebrity, his biggest mistake, and cautions about the possible perils of opening a restaurant in this economic climate

As the owner of 14 restaurants, the author of six cookbooks, and a familiar presence on several TV shows, Mario Batali has entered the rarefied ranks of what is known as the celebrity chef. Born in Seattle and trained at Le Cordon Bleu in London, Batali became known to millions as the host of the Food Network's Molto Mario and Ciao America as well as an intense culinary opponent on Iron Chef America. Batali, who recently kicked off his PBS television series Spain…On The Road Again (with his friend Gwyneth Paltrow), spoke with BusinessWeek's Stacy Perman about starting a restaurant in a bad economy and keeping it going in an industry known for its high failure rates (, 4/16/07). Edited excerpts of their conversation follow.

You opened your first restaurant, Babbo, in 1998. Having just opened your 14th restaurant in September, do you find that it is easier or harder to open another eatery given your track record? Is there pressure to outdo yourself?

It doesn't get easier. You can predict a lot of snafus and be prepared for them. That said, each location is different with a different set of dilemmas and problems that arise.

How did you make the switch from chef to restaurateur?

I still like to think I'm a chef. That said, I realized as I was moving in and around the kitchen, it was kind of the financial center of operations. All of the decisions that you make affect the bottom line.

Then would you say that there are a particular set of skills in being a chef that is directly translatable to being in business?

It happened naturally, but I have a business partner, Joe Bastianich. We each have a different perspective, and we've learned a lot from each other about the front of the house and the back of the house and wine along the way.

What do you account for your success?

I think at the end of every month when someone looks at their credit-card bill and looks at the name of a place and how much they spent there, whether it was $220 at Babbo for two or some place else, they equate it with remembering the experience. [If they think,] yes, it was worth it, they will go back at any price point. That is what keeps people coming to our restaurants.

What do you think of the phenomena of the celebrity chef?

It certainly worked for me. A funny thing happened socially 20 years ago. [Back] then people went out to a show and got a bite or to a game or the opera. Now, there is a fascinating amount of information on how to cook. What happened is suddenly cooks are the performers and actors. People make reservations at restaurants a month in advance—at mine, I hope. People send fan letters. They call us celebrity chefs and there is a brand recognition in what we are selling and making. It is free publicity but it takes a lot of time to make those shows. The only real celebrity chefs are Wolfgang Puck and Emeril Lagasse. Paul Prud'homme was the first. I'm on the B-tier. Julia Child was a famous cook but she was not a restaurant chef.

What were some of the biggest lessons you learned along the way?

Clearly the people are the true gold supply in a restaurant, and they are not as quickly or easily replaceable as you may imagine. I'm talking about everyone from the coffee maker to the bartender to the captain. You have to have everyone committed, and you have to commit to them.

What would you say was your biggest mistake?

Letting people get lured away by people offering them 10% more. The big lesson is that you do not have to make all the money—you can share a lot of it.

What would you advise a young restaurateur wanting to open a restaurant in this economy?

I would advise them to wait. This bailout could be a disaster or a bump in the road. But if you have the capital and the real estate, proceed.

Customers are not looking for exotic, hot restaurants—now they want comfort, something they can afford. There are still lots of people with disposable income. Our restaurants are still all up compared to last year.

What would you say is a reason to open a restaurant?

The main reason is because you love the business of making food and beverage available to customers. They come in and you treat them like special members of your family or a fan base. It is evident to anybody who talks to me that I love to go to my job and that I am not looking at the clock to see that there are only two more hours until I can go home. I look at the clock and say, I should have gone home two hours ago. You have to love it, or it's a job and then you should do something else, because owning a restaurant is fraught with risk. The first year failure rate is 70%.

Why is the restaurant business such a risky venture?

I'd say it is because most restaurants are usually undercapitalized. What happens is lots of people come over to your house for dinner and they say you should open a restaurant. But opening up a restaurant is so much more than just being a good cook. That is the hard thing for a lot of people to understand: it's about purchasing up the volume without compromising.

For example, there's somebody's Italian aunt who is a great cook. Somebody says we'll back you in a restaurant—it is every mom and pop's dream. They get a critical review and they do one full seating and all of sudden they have twice as many people coming. Suddenly, auntie is tired of trying to figure out how to make more lasagna and she makes compromises, she let's others do the work, and they don't pick it up or don't capture it the way she has and suddenly her great food is lesser food. It happens in no time. There is no time to properly manage things, and the customers recognize that immediately. They come in less and less, and the hot restaurant six months ago is no longer hot. It's not an indictment, but if you don't carefully keep a watch on things, you can go from a really good cook to just O.K.

How have you avoided that fate?

I've not avoided it at all. There are a lot of angry people out there on the blogs masked by anonymity. They are the most vicious people in the world. I've developed a real thick skin, but every time I'm feeling real good, I go on those blogs.

*Perman is a staff writer for in New York.*


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