842: Danny Meyer on the Pain of Eater Deathwatch; Playing Cat and Mouse with Sam Sifton

27:31That was something I had to contend with as a leader. But the fancier part of the restaurant was holding their heads in their hands while the more congenial, easier part of the restaurant was celebrating. So that was a tough one. And then the other three-star review, which I was really happy 11 Madison Park had finally been elevated from two stars. we had gotten two stars right off the bat from Ruth Reichel and then Frank Bruni had come back and give it another two star review and this time he gave it three stars. Great! That was wonderful. We had been wanting three stars for a long time but in that very review where he gave Eleven Madison Park three stars he managed to diss three of our other restaurants that and what's you know especially great about 11 Madison Park is it's outshining Gramercy Tavern Union Square Cafe and I forget what there's just a level of cruelty to that and critics can't help themselves sometimes especially if you look back 20 years which we're speaking about now but I think that we as writers and the definitely the critics we've had all four the New York Times critics on the show sitting in your seat like they understand the responsibility a little bit more than Frank Bruni had.

28:56This is obviously my opinion. I just felt that's like unneeded cruelty to deflect or transfer some of the energy to negativity towards the restaurant not being reviewed. It just seems that you're not seeing that as much these days. No, no, I don't think so. I mean, and again, as I was just saying, I don't mind tough reviews. Of course. I really don't. In fact, as I look back, of the toughest reviews we've had, I think in retrospect, we deserved most of them. And the good news is that what a review does, and this is why I want to see more reviews. I think it's great for the restaurant scene in New York because when restaurants, when restaurateurs and when chefs know that any day a critic from the New York Times could come in and it's going to matter, it ups your game.

29:49And it ups everybody's game. And I think that's good for the whole restaurant community. I don't want a situation in this city which has such a great restaurant scene where we're just reliant on influence. Of course. That's where this could lead. And the good news is I think Ligaya Michon's writing, you and I spoke about that last year, is as good as any critic I've ever seen. I just want more of it. Yeah. So this is an interesting topic because I have said the same. I think the New York Times is almost like a public utility for the restaurant industry, and there should be budget given to reviews.

30:26Now, since we had that, they've changed the model. And, yes, there's not a full LaGaia or Tejal review every week, but Mahira and Ryan Sutton, Mahira Rivers and Ryan Sutton are also reviewing in the Digest. Are you kind of feeling the smaller reviews are not full reviews? Do you have like a little bit of a mixed opinion about those? Well, I've never had one. But I have spoken with people who have gotten them and they feel let down because there's only two impacts of a review. One is does it do anything to or for your business? And the other one is does it do anything to or for the morale of the restaurant itself?

31:09Those are the two impacts it can make. But I'm making the case that globally the impact of reviewing restaurants, period, is a way to rise the tide for the entire industry because I think it keeps restaurants on edge. It gives restaurants something to strive for. That's what Michelin has done for years. You know, when I used to follow the Michelin Guide, especially in France, my very, very favorite thing to do was to go to a two-star restaurant that wanted three or a one-star restaurant that wanted two because they knew they were going to get inspected that year. And you could just feel that they were working that much harder, striving for something.

31:52And the New York Times is the best opportunity we have for that kind of thing in New York City. I just think, and I hear this as well as guests on and off the mic, that these digest reviews are a letdown. But still, they are stars awarded by the New York Times. And they're responding to this plea that I was making on the show years ago. It's like we need more reviews. I totally agree with you. Credible reviews, unbiased reviews, funded reviews. Yeah, I think there's one other way to look at that, though, Matt. And that is, you know, the Times has historically had fantastic theater coverage. And they cover off-Broadway.

32:29They cover off-off-Broadway. They cover dance. They cover Broadway. They found a budget for that somehow. Yeah. I think we know that food sells, food and puzzles have been very, very good for the New York Times. And I think that the shorter reviews could be more the reviews for off-Broadway productions, our restaurant version of off-Broadway productions. And, you know, the longer reviews can be, you know, the Broadway productions. And some of them are going to be really good and some of them aren't. But I do think that there's another way to look at it. I think when the big review is used for an off-Broadway production and it's not 52 a year.

33:11Yeah, no, it's not. That means that there's a whole lot of restaurants that are not only not being reviewed at all, not being re-reviewed and therefore not being kept on their toes. Yeah, the re-review process is a great point. And it's a good point, too, to say that, you know, more reviews and thinking about off and on and off Broadway is a good way to look at it. And we would all benefit from more reviews, just like straight up. So totally agree with you. I think it's fascinating when writing about restaurant philosophies and many things that you've written about in Setting the Table. And like there's definitely some like I would say restaurant business terms that I was unfamiliar with because I haven't worked in restaurants myself.

33:54But breaking the rule of three, I think, is really interesting. The three tradeoffs. Talk about that because I think listeners of the show, we have a lot of industry, they'll understand the three tradeoffs. But you kind of think about it in a different way. Well, at that point, I was writing about Shake Shack and I was writing about my realization that we were doing something which I called fine casual. which was certainly different than fine dining, certainly different than casual dining, certainly different than fast food. No one I've ever met has said Shake Shack's fast. But the rule of two is something that anyone who's ever dealt with an architect or a contractor has heard.

34:41When you design your ideal restaurant or your ideal apartment and then you go, okay, how much is this going to cost? And your jaw drops. I've heard all too many times the architect will say, well, you wanted it to be that nice. And then they'll say, look, there's only three salient issues. How long is it going to take to do it? How much is it going to cost? And how much quality do you want? And they'll go, which two of those three things do you want? Because you can only have two of them. You really want it fast and high quality, it's going to cost you a lot more money. You can only have two of them.

35:18You really want it to be inexpensive and high quality. It's going to take longer. Yeah. Right? So they go, like, which two of those three things do you want? Quality, speed, or price. And fast food, I came to realize, is genius at that. They go, you want it really fast, right? And you want the price to be really low? Yank it in all natural beef like they serve at Shake Shack. And I realized that we were breaking that rule of two, but maybe we weren't because it still is the rule of two. But implicit in the rule of two, I had always heard that it has to be one plus one plus zero. And what I learned in retrospect, it wasn't my plan, but I learned in retrospect that we were doing a Shake Shack.

36:11It was still the rule of two, but we were kind of going 0.65 plus 0.65 plus 0.70. So compared to fine dining, we were using patla frita beef and Valrhona chocolate for our chocolate shakes and all the best ingredients we could get. We weren't going to be as inexpensive as fast food, but we were going to be a lot less expensive than if you sat down and had that same - Tavern burgers. Burger at Union Square Cafe or Gramercy Tavern. Same thing. We weren't going to be. So the quality price, there were going to be some trade-offs in there. But the thing that I felt best about was that it didn't cost any extra money to be nice to people.

36:57So if you talk about hospitality, you weren't going to get 100 % of the service. You weren't going to get a waiter or waitress. You weren't going to get a tablecloth. You weren't going to get flowers. There wasn't going to be a pastry chef in every single restaurant or a sommelier, right? Yeah. So you weren't going to get all the service. You were going to have to go to the window and get your own food when it was done, which was going to save you money. But we were still going to give you the smile and the welcome and the hospitality. And so that's how we arrived at this. And that's why I call it fine casual.

37:31And in retrospect, I said, why is Shake Shack working so well? We didn't invent burgers or fries. We didn't invent the experience of going to a shack to get a burger. So why was it working so well? And that's what I figured was the reason. Yeah. I mean, there's a lot of either ors in this mentality of the restaurant world. Yes, for one thing, no. It's like, yes, chef, no, chef. You're kind of breaking a lot of that in this book where it's about compromise, but it's about just having this creativity and being creative with the resources you're given. So I see that. I want to actually talk about Shake Shack.

38:06Last time we were here, I was like, I have so much to talk about. I don't want to get into the history of it. I think our listeners will know the history, but you should obviously read the book. There's some wonderful lines about the culinary, like the development with Carrie Heffernan and kind of getting this burger together. But also, it grew. And I worked in a magazine off the park in 2004. So I was in that line when you had opened. And I was very aware of Shake Shack being this very special place with branding and with very cool, like the burgers. And I was into the fries personally. I want to actually jump forward to that really interesting time where you took on a small private equity investment.

38:45And that was the last investment you took before the IPO, which truly is remarkable. Just the fact that you IPO'd from that small investment, that small of a beginning. I want to ask you about that moment in taking on investment from PE and really how you kind of squared it because it felt like you were torn in that moment a little bit. Yeah, well, it was a really important inflection point for me because I hadn't wanted to grow Shake Shack in the first place. It took us five years to open a second Shake Shack. That's remarkable. It's so true. So when we did open our second Shake Shack on the Upper West Side and the lines only got longer at the first, because one of my hopes was we could cannibalize the line because that was the biggest complaint that I got.

39:38Remember, back then we didn't have the app, so there's no way to skip the line. And when the line only got longer, I said, uh-oh, we got a tiger by the tail here. We better do something. And then we were profitable. So we were able to open a third and a fourth. We opened in the theater district. We opened on the Upper East Side. We opened at Citi Field, which didn't require any money, which was great. As a sidebar, that section is fascinating, how you worked with sports and how you pivoted from football to baseball. Sorry to interrupt. Just read that, listener. It's a great section. Thank you.

40:11I enjoyed writing that, too. It's very cool. That's a whole other thing that I really learned about, which is captive audience dining. Yeah. But we'll talk about that next time we're together. But then we had at this point so many team members who were really good, who were really ready to grow. But we didn't have enough money to open a bunch more shacks in New York City at that point. And it was time – we had just grown to Miami and it was time to think about where else we might grow. Miami, Washington, D.C. And so we needed some money to do this. We didn't need a lot. We raised$20 million. That is a lot of money, but in the scheme of private equity, it's not a big, big debt.

40:57They wouldn't even talk to you for under 100 in those days probably. And the other thing that I wrote about in the book is what could possibly go right was that 11 Madison Park was – it wasn't about to go out of business like Tabla was, but it was floundering in a big, big way. And so at that point, I felt badly that Tabla was not providing a return for its investors. 11 Madison Park was not providing any return for its investors. And so I decided to give the first Shake Shack to the investors of 11 Madison Park. Pre-IPO, post-IPO. Thank you very much, friend. And so what that did, I only gave them that business.

41:45I didn't give them the IP to the whole thing. You gave them that physical business. But what that also did was that gave those investors the opportunity to invest in each successive Shake Shack. And then we created one company out of that. And so those investors did quite well investing in Shake Shack. And those investors joined the private equity investment. So, in fact, we raised$25 million. $20 from private equity. And five from the investment pool. And, you know, Randy Garuti, who was leading the company at the time, did such an amazing job running it that we never needed to raise money again.

42:24We just organically grew the business based on its own profits right up until we had 65, which is the number we had at the IPO. And then that's when we raised a lot more money. Yeah. Randy Garuti, a real unsung hero in the restaurant industry. You know, he was friends with my writing partner, Dookie Hong. and Duki always spoke so highly of Randy and just in general, a guy who just was on the scene at restaurants all the time and of course, innovating with Shake Shack and on the culinary level and the space level. And that leads to a question about 80-20. This idea that all Shake Shaps should have 80 % like kind of consistent, scalable and then 20 % personalized per venue.

43:05This is a pioneering idea. And I think you see it now all over Fast Casual. I think Sweetgreen comes to mind right away with like location-specific specials and just personality in each space. But you really pioneered this 80-20 mentality. And that was a – again, a lot of the problems that I was solving and that I continue to solve are problems of my own making. It's like I'm the one that was so afraid of being seen as a chain guy that I asked myself, whoever wrote the rule that every link in the chain has to be identical. And so something you wouldn't see out of chain businesses because it's inefficient to make each restaurant look a little bit different or have a slightly different menu.

43:55But the 80-20 rule was let's have 80 % of every Shake Shack, and we're doing this with daily provisions right now. Let's have 80 % be exactly the same and let's have 20 % be something that is tailored to its community. Because I wanted – when a Shake Shack opened, when a Daily Provisions opened, I want people to say, that's my Daily Provisions. That's my Shake Shack. So for me, a good example is when we opened in New Haven, which was probably our 20th shack. I should know that, but about 20. We – the 80-20 was this. The 20 percent was that we found reclaimed wood from the bleachers of the Yale Bowl.

44:39That became our walls. Our menu, you know, we would – our concretes and our custard was full of baked goods from favorite bakeries. We had a special hot dog called the Handsome Dan. And the Handsome Dan was with fried shallots and cheese sauce. And that was so successful there that we ended up taking that same menu item to other shacks. See, that's the beauty of it. The great thing about the 80-20 is it also fuels innovation elsewhere. You find regional specialties that you put on other menus. It's like an incubator for ideas. Exactly right. So cool. And I got to ask you, how proud of you are you when you fly Delta and you're walking by?

45:22Because like that is, it's just part of flying Delta is like, do we want Shake Shack or not for a lot of people? A lot. Well, I'm not only proud about it. We worked hard on that because getting that burger – in fact, we fought it. For a long time, we said we can't do a Shaq burger on an airplane because people are going to feel let down. It's not going to taste the exact same way. And we came up with like five recipes to propose to Delta. Let's do a patty melt. Let's do a burger with Swiss cheese, anything. Yeah. So they would know it was Shake Shack, but they wouldn't say, I don't love the Shaq burger anymore.

45:59And Delta kept pushing back to their credit. Yeah. And they said, we want a Shaq burger. And we figured out how to do it. And so it's not just pride that we figured it out, but having had it now about six times. And if you ever see some weird guy like watching you eat your food, that's me. Because I'm looking at every row to see how they're enjoying it. And are they dipping the crinkle cut potato chips into the Shaq sauce? And do they enjoy the brownie? It's incredible. And also like before you even board the plane too, and I guess that was my original question too, is like when you're walking through the terminal, that like shack is there.

46:35Like that's, like getting into airports was probably an extension of the idea that you had with baseball stadiums, right? Yeah, it's exactly right. It's hard. It's really hard working in airports for a lot of reasons. Number one is that those are always, and this is for any brand, they're licensed deals. So there's always a company that airports require to do all the food service. And what's also hard is that if you're an employee there, you know how much fun it is getting to the airport? Do you know how much fun it is going through security? Now imagine if you did that every day for your job.

47:12And by the way, you've got the breakfast shift, which means you're doing it at 6 in the morning. This is a reminder just never to be an asshole to anyone at the airport who works there. Like for real, like TSA, restaurant workers, it's just such a bad look. Just please don't do it. You're so right. It's like, especially JFK, it's far out there, man. Yeah, JFK is a tough one. This episode is brought to you by Wayfair. There's a moment every fall when I want my kitchen to actually feel like fall. And it usually comes around the time of my first pot of chicken soup. When I wrote Food IQ with my buddy Daniel Holtzman, we spent a lot of that book pushing people past their comfort zone with recipes for sous vide, homemade pasta, and boss-style braising.

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50:37Download the new PayPal app to get started. See paypal.com slash protection terms. So I want to close this. Danny, the book is terrific. We're linking to the show notes. I think anyone who has an interest in restaurants as a guest or as somebody who works there, I mean this fully by the book. It's a required reading. I just want to close and talk about the fries because you write very candidly about the shack fries. And I think that's something that has been part of internet lore. I feel Eater and Grub Street were particularly tough on the fries. You made a pivot. And then something happened after the pivot.

51:14Let's close with that story. Yeah, the pivot. This gets to the, you know, as proud as I am of, I think, helping to pioneer fine, casual part of our industry with Shake Shack. That you can take a fine dining ethos of how do you source ingredients? How do you cook things? How do you design your restaurant? How do you hire people? How do you train people for hospitality? Really proud of that part. What we have had to learn over all these years is how to marry that with the systems that chain restaurants have historically been so good at. And there's been a convergence of those two. I think chain restaurants have learned a lot from fine dining in the last handful of years.

51:56And fine dining has had to learn a lot from chain restaurants. Absolutely. That said, you can't take the fine dining out of Danny Meyer and the concern I have about let's make it better tomorrow. Let's honor the work we did yesterday, but let's find a way to do it better. And some of the fine dining critics were weighing in on Shake Shack, which was kind of unheard of. Since when does the New York Times give a full review to a burger stand? But they did. And one of the comments in that review, that was Pete Wells and Ed Levine piled on a lot in Serious Eats. And they were saying, can't one of Danny Meyer's fine dining chefs teach him how to make fresh French fries?

52:40These frozen fries are just – and so Randy and I convinced ourselves that they're right. Let's listen to them. Over time, I mean you pushed back forever in your mind. You knew that you were doing it right, but you still conceded. Well, so conceding was the toughest thing. And I guess in retrospect, that was our moment that Coca-Cola had with real Coke or whatever that was. New Coke, yeah. New Coke. Yeah. We went to fresh fries. We converted all of our shacks. At that time, there were about 35 to making fresh French fries, which is not easy at all. It changes all of your equipment. It changes the way you lay out your kitchen.

53:23And we said to ourselves, this is going to be a game changer. We know people love our shakes and our frozen custard and our burgers. Now we got to get the critics to love our fries. So we switched to fresh French fries. Sometimes they were amazing. Sometimes they were horrible. And the reason is that potatoes, like any other fruit or vegetable, has a season. That is it. And frozen fries are a great example of where frozen can be better than fresh because they're frozen at their peak level of ripeness. Sugar, starch content never changes. Fresh fries, if you're serving them all year, that means that there are many, many months in which those potatoes were cold stored somewhere that did change their sugar and starch content.

54:10And it becomes soggy. Well, and the reason is that frozen fries are also – they're always coated with something. And that coating is like a raincoat. And it seals the heat in and it seals the oil out. And fresh fries, the oil gets in and the heat gets out. And so they could really be soggy. They did not retain their heat. And we got so many complaints from the people who mattered the most, which was our customers. Of course. And we were really stubborn about it. We finally threw up the white flag. And, of course, we said, if we're going to change back, we got to at least have improved something.

54:51So we were able to source a non-GMO frozen fries. Yeah, yeah. So at least we could say, well, we made them better. You made them better. They're back. And I'm sure there was a lot. And our business just shot up after that. Yeah. So the lesson I learned is sometimes the critics aren't always right. I listen to critics. I really do because, and I'm not just talking about professional critics like guests in the restaurant. We welcome people telling us how we can do better. But you got to realize who are you listening to? Because sometimes if you take in the wrong voice, you're missing the many voices.

55:26Danny, I hope you can come back. I wish this could be a regular segment. So much respect. And again, by the book, I'm a huge fan of it. Thank you so much for joining. This is Taste. Thank you, Matt.

55:41This is Taste is hosted and produced by Eliza Abarbanal and me, Matt Rodbar. The show is edited by lead producer Clayton Gumbert and supervised by Pat Stango, director of media production and development at Penguin Random House. Thanks to Shalia Harris and the production team at Penguin Random House. Theme music by Steve Rydell. Episode portraits by Louise Zergon Pomeroy. Logo design by Ellie Skirzat and Ian Dingham. Visit Taste Online at tastecooking.com and make sure to subscribe to our newsletter to keep updated on all cool things in the world of taste. Fall has never looked or tasted this good.

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