Stories of modern business.

Courier Weekly Friday 26 June 2020

Courier Weekly Friday 26 June 2020

Courier Weekly

We’re in Shanghai to find out how Camden Hauge is growing her restaurant empire, Courier columnist Colin Nagy explains why startups might want to hire newly available talent from the hospitality industry, and we go behind the scenes of this week’s edition of our email and newsletter.

CAMDEN: Last week, there was a flare up of [Covid-19] cases in Beijing, and immediately people started wearing masks more, taking temperatures at doors again. On the one hand, it feels back to the way things were, and actually more so because people are revenge spending in this way that's very helpful for our businesses.

DANNY GIACOPELLI: That's Camden Hauge, an American restaurant owner living in Shanghai. Camden's got a growing group of restaurants, wine bars and shops across the city, plus her own events agency there. Today on the weekly, we catch up with Camden about her growth plans. We also talk with Courier columnist Colin Nagy about the current state of hotels, and why startups might want to steal newly available talent from the hospitality industry. Then we've got a bit of a behind-the-scenes look at this week's edition of our email newsletter. All that's coming up right now on the Courier Weekly.

DANNY: I'm Daniel Giacopelli, and this is the new podcast from Courier. We're kicking off this week's show in Shanghai. I first caught up with Camden Hauge smack dab in the middle of the pandemic a few months ago, when her four locations Egg, Bitter, Bird and Kin were closed, like pretty much every other restaurant in the world. But since then, as other restaurateurs are slowly dipping their toes back in the water [and] thinking about reopening, Camden’s gone on an absolute growth path. When the world was pretty much locked down, she launched a completely new spot called Lucky Mart that serves konbini and highballs, and then a sixth spot called La Matcha that serves matcha drinks, and now she's launching another concept as well. I wanted to know what lessons she's learned during such a steep growth trajectory in the time when hospitality isn't exactly a hot industry to be in. Here's Camden.

CAMDEN: I arrived in Shanghai almost eight years ago now. I was working in London, actually at Saatchi & Saatchi in advertising, which I had fallen into because I had no idea what I wanted to do after graduating with a History of Art degree. After working there for two years – I loved the company, I loved the people but I really wanted a new challenge – and so I asked if they could send me anywhere else in their network, and they had an opportunity in Shanghai at the time. 

I went over to Shanghai under the pretence of staying for three to six months, but within the first month I absolutely fell in love with the city and decided that I wanted to stay. I knew that advertising wasn't for me, I'd always always wanted to do food. Ever since I was very little, I used to pretend that my kitchen was a restaurant, and I used to serve my family, asking my dad to help me print out little menus from our computer, which was super new at that time. I always, always hoped I could open a restaurant, but having grown up right outside New York City and living in London, I never thought it would be possible just because those two cities are so competitive. They're so saturated, and it takes so much experience and money to be able to open places there. When I arrived in Shanghai there were so many more opportunities and open spaces for new kinds of western or international dining.

DANNY: When we last caught up, you had a certain number of restaurants and now you have even more restaurants. You keep opening up, like once a month. It's a shocking amount of growth. So what's the status of the empire right now? How many restaurants do you have?

CAMDEN: Oh, man. Luckily, it's more reasonable than it sounds just because some of them are smaller scale. When we last spoke, I had just opened lucky Mart, which is a small konbini and highball shop, so a little bar that focuses on Japanese snacks. That was responding directly to the Covid situation trying to create a small footprint space and focus on one product that's a value, but a hero product that people get excited about. 

Following in the footsteps of that, a partner and I decided to open a little stall called La Matcha, which focuses just on matcha-based beverages. There's a huge habit here for people to drink milk tea or other fruit teas, different tea beverages throughout the day, but no one is focusing on matcha. In today's day and age – and I feel so guilty saying this – photogenic beverages and food rule the roost. This green drink is going to make it across everybody's screens and social media, and so we thought that this would be a good idea after seeing how well it’s doing overseas in places like New York and LA. We opened that in late April and yeah, it's going well so far. We have a little stall that's just outside of another restaurant, and we're doing delivery. We're opening a second location, hopefully within the next couple of months and doing a pop up in another city in China very soon as well. 

Two weeks ago, I opened another place, actually I can't say little as this is the biggest restaurant so far by square metre. It's a 200 square metre restaurant located within a beautiful boutique working facility run by a group called Anken, which renovates these gorgeous old factories and instals smaller offices within that bigger space. They wanted someone to come in and run their canteen for their workers, which has a gorgeous attached terrace, a roof garden that grows vegetables and herbs and things that we could use at the cafe, another roof terrace that's all turfed out for activities. It was just too good to resist, and the deal itself was amazing, and so we went in and opened Maiya, which means ‘rice valley’ in Japanese. Here, we're focusing on modern east Asian food and rice-based beverages. Things like mijiu, huangjiu, sikhye and baijiu – all beverages native to China and other places in east Asia that are currently under-represented and not heroicized. 

DANNY: That's incredible. Last time we caught up for the magazine, I asked you, you must have a really good layer of people managing all these things, because you're growing this restaurant group, and that must become even more important now having really good managers for each of these things. I know you also said you were launching a hospitality umbrella group itself to help manage all of this. Has that happened yet?

CAMDEN: Yes. Very excitingly, on the fifth anniversary of Egg itself (June 8th) – Egg being the first restaurant that I opened – we did our first all-group meeting under the Happy Place Hospitality Group umbrella. I've made a few key core hires, which I'm thrilled about, because hopefully it can help me cut out some of the work that I was doing, and that other people will do much better given the time and focus. That will also create more efficiencies in the back end. So I'm really excited to be able to have an umbrella group where we can promote all of the work we're doing across every venue in a more organic way: centralising social media, in addition to all the venues’ social media, but also centralising talent is super important from now on, just because it's become a lot harder to manage as a single person.

DANNY: What's the state of Shanghai right now in terms of reopening post-pandemic? Is everything back to normal? Are people shoulder-to-shoulder, lined up on the train, and in restaurants?

CAMDEN: Everything is both back to normal, and yet incredibly sensitive at the same time. One weekend we're doing a huge food and beverage festival, where we have 40,000 people walking down the streets, all gathering in this giant Piazza outside of a shopping centre. The next day, I'm flying on an aeroplane, and all anyone has is their mask and a little QR code to show. Things seem super normal, but then last week, there was a flare up of cases in Beijing, and immediately people started wearing masks more, taking temperatures at doors again. On the one hand, it feels back to the way things were, and actually more so because people are revenge spending in this way that's very helpful for our businesses, but we also do realise that the second that there are more cases detected, people start to retreat, and are sensible about the ways that they interact with people. 

DANNY: During lockdown, you mentioned you had to take the temperature of customers and staff and report to an app. Every different district of Shanghai had competing policies of what you can and cannot do. Has that all ended? Is it like a free-for-all now in terms of restaurants, what you can do?

CAMDEN: It basically is a free-for-all. We don't have to take guests’ temperatures, we don't have to have social distancing in the venues, we don't have to restrict any ingredients or types of dishes that we serve. Our servers are still wearing masks just to be conscientious to our diners, to make them feel as though we are being as hygienic as possible. Everything else is pretty open to be honest. I think only in the big central spaces, like if you enter a shopping centre, they might still be taking temperatures, and they might still ask you to wear a mask, but things are surprisingly back to normal.

DANNY: Next, we're in the US to catch up with Courier columnist Colin Nagy. Collin is also one of the founders and authors of an always excellent email newsletter called Why Is This Interesting? One of his recent editions really caught my eye. He featured Reilly Brennan, a partner of Trucks VC, a venture capital firm focused on the transportation industry who we also incidentally had on the Courier Daily a while back. In the newsletter, Reilly wrote about a road trip he took with his family across the US. They drove 3,000 miles during the pandemic, and learned a lot about the hospitality industry. So I thought we'd get Colin on to talk about what those lessons were.

COLIN: Reilly wrote an interesting article, and it encapsulated a lot of observations that I'd been having as well. He basically went on a road trip across the US with his family, it was for essential travel, and wrote about the masks and the precautions that they were taking. The interesting thing was how they really only felt safe interacting with big established brands.

When you get out of certain areas, New York, LA, etc, there's no mask-wearing in America, which is terrifying. I don't think a lot of people have even seen this fact. What Reilly was saying is how the big established brands are the ones that actually have a lot of the operational and safety protocols in place. He almost had the opposite of the all-American road trip experience, which is kind of sad. You know, you want to go to the cool diner, or the roadside place, but instead, he wanted to be at the Holiday Inn and the Starbucks. He wanted to be at the places that he knew were going to have all the proper safety measures. I think because Starbucks temperate check their employees every day, because they have all of these safety protocols, and because they’ve been able to operationalise all of the things to keep people safe, it seems like that brand has had an acceleration in terms of somewhere people want to go. Before Covid, you would never have heard me say this, I'm a typical Courier reader in my support for boutique coffee shops and artisanal brands.

DANNY: Yeah, in the piece he mentioned that some of the key safety mechanisms for big food brands were 1) cashiers handle money, but those people are separate from the people who handle or transfer food to customers.

COLIN: I think they've been great at mobile and online ordering, ensuring all the procedures for that. Even the drive-throughs at a Starbucks, there's no direct hand-to-hand contact. There's a very granular level of operational sophistication, which is comforting. A lot of these brands, which might have potentially fallen out of favour with large swathes of the public, are now finding new favour because of these decidedly unsexy operational things that create a positive impression.

DANNY: He said in the piece that the small, off the map diners that you read about were either closed or generally had no safety protocols. Do you think – I mean, we’re saying Starbucks could benefit from this because they have the bureaucratic means to enforce safety protocols across all of their locations – but can't individual diners duplicate these protocols as well?

COLIN: I think that small businesses can, and I've seen great examples of small businesses that do this. The problem is, it is just catch as catch-can. It's very hard to know which ones do and which ones don’t. No way am I saying don't go to small businesses, because obviously you want to support small businesses. It's just that when someone's going to that Starbucks, they know what experience they're going to get. It's not an ad hoc sort of thing. I think that people can certainly build this reputation among their customers as a small business just by having these really enforced standards over and over and over. I guess my point is, it’s almost defying a lot of the laws of marketing. It's no longer the beautiful plants and the Kyle Chayka airspace aesthetic that attracts people, it’s the decidedly unsexy operational things that are making a brand stand out to me, or making me want to go there. Starbucks is an interesting brand, but I haven't really gone there since I was in high school, and that was like the only option where I lived. It’s funny to find this reversion, and I think Reilly was astute to see that as well, with a lot of retail.

DANNY: You just wrote a really great piece for our friends at Skift about why companies might want to poach hospitality workers because they have a number of really interesting skills that can be useful across different industries, right?

COLIN: I really felt it was necessary to write this piece because, with the column and Skift that I've been doing for six years, I've had the good fortune of coming across really, really talented people that I think are oftentimes unsung heroes. In a lot of ways, when they do their job right, it's invisible. You go to an incredible hotel, everything's perfect, the flowers are perfect, the bed is perfect, the presentation and the restaurant is perfect. These soft skills are things that are under appreciated in the market. 

While writing about how hospitality has been decimated, how places like the Hyatt and Hilton have all laid a ton of people off, I wanted to show how the attributes that go into a great hotelier: attention to detail, the ability to interface and have the emotional intelligence to handle lots of different situations, and also the soft diplomacy, are applicable to other industries. If you look at private banking, selling to high-net-worth individuals, overhauling the customer service experience in a place, examining every touchpoint that a brand interfaces with a consumer; when you look at all of this stuff, the hospitality mindset and these attributes are really, really incredible for that. In some ways, what I wrote was a love letter to the industry and how much I really care about these people and their work, but I was also trying to create the desire for other industries to hire them. So I wish they would send that article with their resume when they're applying for something. 

DANNY: Is there any evidence on your end that this is actually happening?

COLIN: I've heard a lot of anecdotes from people working in industries that have a lot of interaction with clients, in sales and customer service, saying that they've had great experiences hiring people from hospitality. I'm just really hoping that other industries that are not as affected by the pandemic, or that are creating growth will look to tap some of these people in. There are certain skills learned by hoteliers, like the art of omotenashi, the Japanese word for addressing things before they need to be addressed, that make for a really wonderful experience; one that could easily extend into the world of retail, customer service, banking, or sales.

DANNY: When we last caught up on the Courier Daily podcast a couple of weeks back, we talked about reopenings of hotels; what that might look like. Now, obviously, hotels are reopening. I mean, here in the UK, at least on 4 July, they're allowed to reopen restaurants, bars and hotels. Do you think any of the things you predicted back then will come true in terms of safety protocols or prices?

COLIN: I'm just observing some of the reopenings here in the US. I've actually been pleasantly surprised by some of the big, iconic hotels and restaurants. I've been hearing very good things. I think it requires a lot to make this entire thing, social distancing, not seem like a big deal. The art here is about making the safety protocols, the social distancing, all seem invisible. I've heard stories of The Breakers in Palm Beach, which is an iconic hotel, and the overarching consensus is that none of their social distancing measures feel obtrusive, but integrated into the experience. It's not too over the top. Ultimately, you want to feel like you’re having this reemergence into hospitality, you don’t want it to feel like you're checking into a clinic or a viral ward. 

DANNY: A sterile Swiss sanitarium.

COLIN: There's a finesse that’s required. Getting the balance of the diligence, the operations right. I really think that on the luxury side of the market, people are probably going to opt for badge value, or go for the big known names. Claridge’s got through the Blitz. That hotel has been through all of these trials and tribulations, and I was heartened to see how they took in all the frontline responders. The most iconic names are the ones that are going to have the trust for people to start coming back to. This is something that I'm ruminating on writing about in the next couple weeks.

DANNY: Finally, on Courier Weekly today, we check in on what's been going on in our weekly email newsletter. To walk us through some of the stories you need to know is our features editor, John Sunyer who joins us now. John, we talked about everything from fashion to forest bathing in this week’s edition, right?

JOHN: Correct. It's a very diverse lineup this week.

DANNY: Very eclectic.

JOHN: Yeah, with regards to fashion, we've obviously been reporting on it quite a lot in the past two or three months. The industry is undergoing a huge amount of change. One new little sub-trend we've been thinking about the past couple of weeks is the idea of a two-tier system being developed in the fashion world. The smaller, independent, slightly more sustainable brands that we love covering are developing a new business model based on the idea of only producing clothes when they know the exact demand for that item of clothing. The model is brilliant, but it does require two things from customers. The first of which is a lot more patience. So you see this product online, you log on, you say, ‘Yeah, I want that in a size medium, blah, blah, blah,’ and then you might have to wait a month or two to see if it passes the test, and it actually gets manufactured. 

The second thing is a slightly higher price point. Of course, with economies of scale being wiped out and brands only producing what there’s demand for, the price point needs to be a lot higher. So we’ll wait to see if this two-tier model actually takes off, but it's definitely an exciting prospect. It does also mean however, that the department store level of clothing is going to disappear forever, and this is something we've heard from multiple brands over the past few weeks.

DANNY: Elsewhere in the Weekly, we looked at the macro picture of black-owned businesses, which is really fascinating, because we’ve mainly been looking at a micro scale picture of businesses owned by black entrepreneurs in the past couple weeks: their successes, their struggles. The National Bureau of Economic Research put out a report earlier this month about just how vicious Covid was on small businesses – full stop. 3.3 million small business owners just evaporated from February to April, but when you look at the same kind of drop in African American-owned businesses, it was a 41% drop as opposed to the 22% for all businesses. So black-owned businesses had the largest plunge of any demographic group during the pandemic in those two months.

JOHN: Yeah, it's kind of as though we need to give listeners a trigger warning. There's not only black-owned businesses that are really suffering. We went stat-heavy in this piece. Latino business owners have dropped by 32%, Asian business owners by 26%, and also female-owned businesses by 25%. So not all businesses are equal in the eyes of Covid-19, which is hugely upsetting.

DANNY: Yeah, and there are a few reasons for why that was. I mean, number one was that a lot of black-owned businesses aren't operating in industries that are considered ‘essential’ during a pandemic. So lots of them weren't allowed to be open, and thus they were destroyed. Obviously, there are other institutional, systemic racism issues at play as well, in so far that a lot of black-owned businesses don’t have access to small business loans in the same way that white-owned businesses do. It’s harder to get bank loans if you're a black person – full stop. At the same time, it's great to see a lot of these initiatives taking off to support black-owned businesses, including one that we’re launching. The Courier Fresh Fund was announced a couple weeks ago, and there will be more details on that coming up in early July.

JOHN: Finally, we ran a piece about coffee shop economics. It’s well known, for example, in London alone that there has been a 700% rise in the number of independent coffee shops in the past decade. However, in the past 12 months, only 44 independent coffee shops have opened in the whole of the UK. So things were hugely slowing down then, and then obviously Covid-19 hit. We checked in with a few people about what that has meant for the future of the coffee industry.

DANNY: I know you checked in with Jess Elliott Dennison up in Edinburgh, right? She was our former startup diarist last year, or maybe the year before.

JOHN: Yeah, she owns a really cool space called 27 Elliott's in Edinburgh. It's a cafe/restaurant. Since Covid-19, she's already moved away from operating a traditional cafe-style space. Moving forward, she told us it’s going to be simply impossible to continue with eight tables in a coffee shop and people having a flat white and spending an hour and a half with their laptop. That's just not going to happen, and she’s already moving towards a takeaway model and canteen-style approach to the store. Ideally people will buy something and walk straight away, or they might sit down for 10 minutes, but no more than that. But she says that the traditional cafe model cannot continue how it is at the moment.

DANNY: I don’t like the quote she ends on, but it’s kind of a funny quote. She said that ‘the thought of opening a hospitality business right now, in London especially, makes me feel sick’.

JOHN: That kind of says it in a nutshell. While we have been living in an age of the ‘peak flat white' as some people call it, that may be about to end. We're going to be keeping a close eye on what independent coffee shop owners are doing in the next kind of three to six months.

DANNY: That’s it for this week’s edition of the Courier Weekly podcast. As ever, any questions or comments, just shoot me an email at daniel@couriermedia.co. I'm Daniel Giacopelli. Courier Weekly is back again next week.

You might like these, too