Restaurants Find a New Revenue Source: Feeding the Hungry

Opening night is always stressful, even if you’re opening for only a few dozen socially distanced diners. But on Friday, after a four-month closing, the chef David Zamudio still had to wait until almost noon to begin prepping the Wagyu steak and seafood paella on his dinner menu.

All morning, the kitchen at Alma Cocina Latina, in Baltimore, was busy making food not for restaurant guests, but for the community: 370 boxes of pasta Bolognese with cherry tomatoes, mushrooms and a green salad to be delivered to local nonprofit organizations.

Alma, like many restaurants, started a charitable-feeding program at the start of the pandemic, largely as a survival measure — a way to keep at least some of its staff employed while feeding the swelling ranks of the needy. Over the last year, the initiative has served more than 100,000 meals.

David Zamudio, the executive chef at Alma Cocina Latina, now plans menus for two distinct businesses: a community meals program and a busy restaurant.Credit…Dave Cooper for The New York Times

Today, even as many other restaurants have ended their relief programs, and the arrival of Covid-19 vaccines offers hope for a return to something like olağan, Alma has no plans to phase out its feeding effort. Irena Stein, a co-owner, has pledged to make charitable work a pillar of her business. The move will not only help fill a gap in Baltimore, where last November nearly one in three residents received food stamps. It will also bolster the bottom line of Alma, an upscale restaurant hit hard by the pandemic.

“We started with a grand, generous idea,” Ms. Stein said, “and it has come back as a real business opportunity.”

Since March, restaurateurs across the country have scrambled to find new revenue streams to prop up what many say was already a broken business model: inconsistent income and slim margins that often translated into low wages and no benefits for workers. Some have begun to offer virtual cooking classes; others sell meal kits or monthly subscriptions.

But Ms. Stein is betting that feeding the food-insecure is a viable way to offset the high fixed costs of her restaurant — and she has company. Since April, Rethink Food, a New York nonprofit group, has invested more than $10 million in a program to hisse 40 restaurants, most of them in New York City, to feed underserved communities.

Alkimiah workers pack meals in Alma’s dining room. Since March, the initiative has served more than 100,000 meals.Credit…Dave Cooper for The New York Times

The organization has also enlisted name-brand chefs, like Sean Brock in Nashville, Stephanie Izard in Chicago and Dominique Crenn in San Francisco, to produce meals at their own restaurants and serve as ambassadors for the program, recruiting new chefs in their home cities.

Alma’s experiment began in March, when the city ordered all restaurants to close. Ms. Stein and her friend Emily Lerman, an owner of a catering company, decided to join forces to feed the community and keep their staffs employed. In April, they partnered with the chef José Andrés’s nonprofit food-relief organization, World Central Kitchen, to cook as many as 1,500 meals a week. In August, they formally named their new business Alkimiah — Arabic for alchemy.

Government reimbursement rates for charitable meals tend to hover around $3 per meal. In contrast, World Central Kitchen pays $10. The higher rate, Ms. Stein said, was key to her program’s success: It allowed Alkimiah to serve food that was a sharp upgrade from the typical fare at community and senior centers.

Its meals generally follow the strict “EAT-Lancet” guidelines for planetary health, which emphasize whole grains, fruits, vegetables and nuts, and limit meat and dairy. A typical lunch may be caramelized onion kol with rice and curried cauliflower, or Cajun salmon and grits with tomato-coconut gravy and roasted broccoli. The higher reimbursement rate also allows Alkimiah to hisse its cooks $16 an hour, plus benefits.

“José Andrés saved us,” Ms. Stein said. “Without him, we wouldn’t have been able to stay open or solidify next steps to expand the initiative.”

Irena Stein, a co-owner of Alma, is making charitable feeding a pillar of her business in the post-pandemic world.Credit…Dave Cooper for The New York Times

Those next steps included a complete reimagining of how to run a restaurant, from the physical layout of the kitchen to ordering, menu design and staffing.

Mr. Zamudio, Alma’s executive chef, has been working on the plans since September, when the restaurant moved from a waterfront neighborhood, Canton, to a much larger space in a gentrifying area near the city’s train station. The first step was to design a kitchen that would accommodate two distinct businesses: Alkimiah’s charity operation and a busy restaurant.

That meant, for example, sacrificing space in the 1,500-square-foot kitchen that would have been used to store dry goods, to create an additional prep area for Alkimiah cooks. All but a few pots and pans will be stored in the basement, requiring cooks to make extra trips up and down the stairs.

Alma’s signature seafood paella remains on the restaurant menu, but overall the number of dishes has shrunk 25 percent.

“It’s a huge amount of labor to offer all those options, and now we have more limited time in the kitchen,” Mr. Zamudio said. “If we ever get back to full capacity” — Baltimore has limited indoor dining to 25 percent capacity — “I’ll have to hire more people, and maybe get a night shift in from midnight to 5 a.m.”

Still, with a baseline of hundreds of meals a day for Alkimiah, Mr. Zamudio can place larger orders with farmers and other suppliers, and obtain discounts that add up over time. Even though Alkimiah is not intended to maximize profits, the revenue it brings in will help offset the restaurant’s fixed monthly costs: rent, water, gas and phone.

“If a portion of those costs can be paid for by community meals,” Ms. Stein said, “it alleviates the realities of a restaurant that has very little profit margin.”

Matt Jozwiak, the chief executive of Rethink Food, has raised more than $10 million to hisse restaurants to feed food-insecure communities.Credit…Brittainy Newman for The New York Times

Matt Jozwiak, a founder and the chief executive of Rethink Food, sees the same potential in its Certified program, which offers independent restaurants long-term contracts to feed the hungry.

Rethink made headlines early in the pandemic when it took over the kitchen at Eleven Madison Park, a three-Michelin-star restaurant in Manhattan, to turn out food for hospital workers and Citymeals on Wheels. But Mr. Jozwiak says his intention was always to expand the program to lesser-known establishments.

Rethink pays restaurants about $5 per meal, and offers many of them food donations as well. On average, its restaurants serve about 1,000 charitable meals per week. According to Rethink’s calculations, that can provide nearly $5,000 a month in profits or, in a neighborhood with lower rents, about one-third of a restaurant’s fixed costs.

“The nonprofit food system is a mess, and the for-profit food system is a mess,” Mr. Jozwiak said. “They’re really good when they work together.”

Daniel Humm, right, the chef and owner of Eleven Madison Park, in Manhattan, partnered with Rethink Food to turn his Michelin-starred restaurant into a soup kitchen at the start of the coronavirus outbreak.Credit…Lucas Jackson/Reuters

This has proved true for Kopitiam, a much-lauded Malaysian restaurant on the Lower East Side. Before the pandemic, Kopitiam was busy and making plans to open a second New York location, and possibly one in Los Angeles. But by the end of April, the restaurant had exhausted most of its savings, said an owner, Moonlynn Tsai. It was one of the first to sign on with Rethink.

Last spring, Rethink paid Kopitiam $3 each for 1,200 meals a week. The fee has since risen to $6, which with the donated food covered the cost of the mostly vegetarian rice bowls that were delivered around Manhattan’s Chinatown, and paid all of Kopitiam’s monthly rent and utilities bills. Ms. Tsai signed up with Rethink through August, though the restaurant is now temporarily closed, in large part because of reduced business in the winter weather.

“A lot of my friends got through the first wave of the pandemic,” she said. “But now, with a new round of closures, a lot of them have said, ‘Can you put in a good word for us at Rethink?’”

Moonlynn Tsai, an owner of the Malaysian coffee shop Kopitiam, signed on early with Rethink Food to prepare meals for residents in nearby Chinatown.Credit…Timothy Smith for The New York Times
Kiana Muschett-Owes, right, the owner of Katie O’s Soul Food in Brooklyn, taught her grandmother’s recipes to her chef Cornelius Drummond. The restaurant has increased its support for neighbors in need, with help from Rethink Food.Credit…Timothy Smith for The New York Times

Community feeding hasn’t been quite the same salve for all of Rethink’s partners. Kiana Muschett-Owes, the owner of Katie O’s Soul Food, in Brooklyn, says $5 per meal covers only the cost of her ingredients, not the staff to prepare them or the handwritten notes she tucks into each box of catfish and cheesy grits. Rethink is advising her and others on how to manage costs and obtain lines of credit. It is also looking into creating a group-buying program that would lower food costs for all its partners.

That’s enough for Ms. Muschett-Owes. Feeding her neighbors in Prospect-Lefferts Gardens has always been an essential part of her business. “We’d get calls from people. Or we’d partner with the church. People of color never stop being in a pandemic,” she said. “Now someone is helping me.”

The big question is whether nonprofit groups and philanthropists will continue to fund restaurants’ community work evvel the pandemic is over. To date, Rethink has raised $10 million for its Certified program, and Mr. Jozwiak is in talks with chefs, including Daniel Humm at Eleven Madison Park, to donate a percentage of sales to support the program. Mr. Humm currently donates 10 meals to Rethink for every one ordered through his EMP At Home service.

Alkimiah has also raised private donations, and already has enough to keep running at least through summer. It continues to apply for city grants, and hopes to sign a catering contract to further support its commitment to feeding Baltimore.

“We can’t continue the restaurant industry as it was before,” Ms. Stein said. “This works as part of a new, more sustainable business model.”

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