Espresso: Why Michelin Stars Make F&CK ALL ££ - Unruly Pig founder

0:00Because you're employing a large number of chefs, so you have high labour costs, you have high ingredient costs. It's a difficult gig to make money at Michelin. The customer arrives, let's take the order. Well, hang on, the kitchen's already got eight tables. I want to just store them a little bit there and get them a bit. Oh, f*** that, no, no. But it was just ignorance and stupidity. And I look back with embarrassment, but we can't be all things to all people.

0:31Espressos is sponsored by supply chain software gurus Unleashed. it talks to your e-com and accounting software it's helped islands cut admin time in half get granular clarity on your margins know where your stock is don't miss availability brands like candy kittens tiny rebel and trip all used unleashed and so should you one of your learnings from law was you actually understood the business and i think what we're saying the place here before was i don't know what not to not to shout out it was called something it was called something else and amazing uh restaurant and amazing amazing restaurant did really really well and we were basically saying whilst we were having lunch is that um a lot of these big celebrity chefs they have their michelin star as their flagship but they'll actually make the money off the pub or the yeah uh or the bistro for example it's you know by its nature the standards Michelin set a high standard.

1:30With that comes very high labour cost because you're employing a large number of chefs at a skilled level, and that's difficult in itself these days, and therefore you're paying more. So you have high labour costs, you have high ingredient costs because you're tending to serve, not always, you've got various examples of Michelin stars who are selling not serving turbot, but let's go with the turbot or the lobster. are serving high-end ingredients. It's a difficult gig to make money at Michelin. It's not impossible. There are obvious examples, many up and down the country. But I was rather taken, we were just briefly touched upon at lunchtime, that a very accomplished, lifelong restaurateur, David Moore, at Pied -à-Terre in Fitzrovia, is just saying, look i would like a staff buyout because the lease goes in about five years and i just can't make any money at this and it's very difficult and that's because of change covid dynamics massively increased costs energy costs labor costs food costs whatever but what one does see and my my analysis is very shallow because you can cite an example to suit whatever case you want to put forward but what i do see is a number of high profile chefs opening either bistros or gastro pubs because i have to say it's easier to make money jesus christ i think my team would crown me but those developments i think may speak for themselves that it's very difficult indeed to make money at a michelin unless you are packed lunch and dinner every day um and once um but doing something like the unruly pig i mean we're doing 36 000 40 000 covers a year so for i think some chefs would say it's very difficult to deliver really high-end quality with those numbers christ knows how those magicians do it but they do what as in the niche in people no no I mean it's just that we would do those numbers a year so let's go Saturday night so typically what would a bistro do a year?

3:54I know we're kind of plucking numbers up because the bistros tend to be higher volume let me put some flesh in your typical Michelin restaurant on a Saturday night probably does 45 to 60 right we do 100 to 120 right now with that comes you know it's it's a difficult gig if you're producing high-end quality food um with quasi michelin expectations i hesitate to say that but you get my drift um but my point being we're getting over 100 covers on a saturday that's 100 average spend per heads whereas in the michelin they're getting say 40 to 60 albeit they're charging probably double i've never run a michelin restaurant i don't know that dave will be giggling his pants off now saying he doesn't know what he's talking about and look he's bullshitting but broadly speaking even those that charge at a higher rate my understanding is the volume's not there The volume isn't there necessarily because volume and Michelin quality sometimes don't go together automatically.

5:04Not always there are notable exceptions. But it's really hard. But basically your Michelin requires a level of staffing and a level of skill that's really expensive and often a quality of ingredient that's also very expensive. That means it's very difficult to make lots of money. I was listening to a podcast completely tangential here, but a podcast about how Porsche became successful. Right. Really interesting. And they basically, it's called Acquired. They go into loads of, they'll go into all the companies. They did Nike. They've done Uber. They go right into the details and it's sort of three, four hour podcast episodes.

5:46But they were talking about the gross margin of BMW versus Porsche versus Ferrari. Right. and i think bmw was these numbers are off but as ballparks i think bmw is about 30 percent but the volume's super high ferrari is um is i think they put a 50 markup on again these is the volume's tiny whereas porsche are really clever because they're in that sweet spot where they've got much higher margin than bmw but they've got a but the volume's still there but but it's still premium. But there's high margins. Yes. And I think that's the art, isn't it? That's the art. And there are people who are much more adept at that.

6:26If you look at somewhere like Hyde in London, I don't know what the covers are, but you know there's a lot. So it can be done, but it requires a very slick operation and a lot of investment. And for many, it's difficult. Yeah. And I'm not saying this is a port, like this is a port, this restaurant at Bony Church, but it seems that you've got that balance in terms of the volume and the quality. you're the best pub in the uk that food i had for lunch was i think it's fucking better than some of the michelin star restaurants i've been to absolutely stunning and i think you could win easily win win a star um but what have what what is the art of getting those numbers right uh do you do you think from what you know it's it's constant battle and we've we've evolved and we've cut those numbers and we've um you know when we started out i mean my god like we made so many mistakes and we're back to where we came in i mean dave went through hell i put i ended up putting him through hell unintentionally we had a far too big menu and we were just pushing through the numbers and we weren't controlling flow and etc so controlling flow flow flow of customers it was almost like um the customer arrives let's take the order well hang on the kitchen's already got eight tables I want to just store them a little bit there and get them a break.

7:43Oh, fuck that. No, no. We didn't say fuck that. Yeah, of course. But it was just ignorance and stupidity. And I look back with embarrassment, but that's what we did. But over the years, and I have to say, it's Dave and Carl being right again, saying, look, we can't be all things to all people. I get you want it to be an accessible pub, but Dave has always led the charge on reducing the menu whilst trying to keep it offering as big a choice as we can because it was a painful lesson for me because I think Christ but it's so obvious now if you have a more limited offering it enables you to achieve better rate of consistency of delivery because it's self-evident really isn't it but the poor chap he had to fight a bit on that one you know and so over the years we have cut and doing less has become more but you still get a customer increasingly less but you're coming and there's nothing on this menu i can eat you've only got six main courses you know but sometimes you because you want to build a business and you want to try and keep the customers happy and you don't want to be in the position of my predecessor and not making money the temptation was trying to be well we can do that but we can do that but we can do a burger well dave doesn't want to cook a burger who doesn't love a burger it's everyone's guilty pleasure but we used to have a burger it was a really nice burger with you know it was glorious but in fact but over the years we we've cut that back and and we've cut our covers back because we've understood, I mean, he was always on this, Dave was always on this mantra and he was right, that, you know, you just cut back a little, less will be more because you'll achieve a better quality and you'll have overall happier customers.

9:42And, of course, that will mean that the choice is more limited and you can't keep all the people happy all the time. So are you focused on repeat custom? Yes. so how because both i mean we're very lucky because the the australia dam top 50 gastropubs is a great thing and all of us are in in the uh whether it be the national restaurants or or the gastropub list will say the same thing they do bring food tourists and we do get people traveling from down from leeds to eat with us because we're the number one gastropub but we are heavily reliant upon and proud of the fact that the majority of our clientele are from Suffolk or have a Suffolk home so the truth is we are proximity to London means there's a heavy amount of second homeowners here down the road in Orford 58 % in second homes I think it's higher in Alba up the road and so our main catchment is is East Anglia Suffolk in particular but at the weekends very much London but we do get some numbers traveling to us I wouldn't want to over egg that on it are they coming in the thousands from the Orkney Isles of course they aren't but we do get occasional surprises we do get people coming from North London for example midweek which is which is a joy and that's the joy of this list and what it has done for us the gastropub list and latterly the rest of all thank you so much for listening to that espresso I hope you enjoyed your morning coffee and are ready for the day let's be having you boy and please do subscribe follow the podcast share this espresso on whatsapp if you liked it and also there's a link to our newsletter in the show description i spend 15 hours toiling and writing this bad boy it's full of wonderful wisdom from the biggest names in food and drink you're not going to get these in a business book so please subscribe and thank me later