This is Bloomberg Business Week with Carol Messer and Tim Steneveek on Bloomberg Radio. Well, Jess, I love having restaurant tours on our program because well I love food, and sometimes if they're here in person, they bring us food and I can try it. It's really fun. But also I love speaking to them about the business, how much food costs, how tough or how easy it is to get employees, and of course customer demand. It can tell us just a lot about how the economy is doing
in different parts of the country. Very pleased to add with us this afternoon. John Fraser. He's a restaurant tour of Michelin starred Chef. He's the founder of JF Restaurants. They've got fifteen restaurants with more than four hundred employees around New York City, Long Island. They're in California, in LA, They've got places in Florida as well. He's also got a YouTube series called Silent Chef, which we're going to talk about as well. Chef John Fraser joins us on
a zoom from New York City. Chef, how are you great?
Thank you, thanks for having me.
Yeah, it's really good to have you with us. First, just give us an update on the state of the business. What are you seeing right now across your different restaurants and concepts.
Yeah, you know, it's really city by city. New York City, as everyone knows, kind of is a really seasonal business. Our New York City restaurants who were up from last summer.
For sure. We'll know in a couple of days kind of how much.
But we do see a bit of a little always in the second heading into the third quarter, and then we ramp up into the fourth which is by far our best around Florida. Also, seasonal dips happen in the summertime, and we're seeing really really strong demand across the hotel properties out in Long Island, as you know, that's that's where it all happens in the summertime.
It's the seasonal business, and we've been rocking.
We'll probably go until around the end of October and then we'll settle into the winter months.
Well, what about getting employees. If we were to speak to you two years ago, I know you would have said it's tough to find employees to uh, to work in the restaurants. Tell us about how tough it is to get those employees and then also tell us about food costs and if they're going done.
Yeah, Starting with food costs, I mean, we have seen a drastic decrease in our food cost as supply chain has gotten better.
You know.
Thankfully we're able to pass that along to our guests, and we're seeing that across all of our restaurants in all of our markets. The food hike, the food cost hikes were kind of universal. It didn't matter market to market. Eggs we're still, you know, wildly expensive. Gas was wildly expensive. That was all passed on to us and there for our guests. So from a food cost perspective, we're seeing
things drastically reduced. There still are some pockets, I would say, a lot of proteins like beef still very very high. I'm not sure that's ever going to get better, to be honest with you, It may just be a change in the way that we construct our menus, in the way that our guests actually eat. From a labor perspective, we are starting to see some uptick. We've we've hired on let's call re hired a lot of people that
were pre pandemic hospitality employees. So in other words, we're bringing folks in that who have had experience in the past, whereas I would send in the last couple of years we were training from zero, which is fantastic for us, and I think that that guest experience is drastically improved in that way. I still think that we you know,
hot topic. You know, when we figure out a sensible kind of reaction to our borders, that will be kind of the last domino for us to fall in order to equalize and be able to pass as savings on to our guests.
So in your view, do you really think the economy is slowing?
In my view, well, compared to what right compared to a year ago, were drastically up from last year compared to two years ago. Obviously, What I would say is what we're seeing is the sort of bifurcation of spending. We'll have some folks that join us who, let's say, are not big spenders, they're out for an experience, and then we'll have some folks who are clearly out to party and have a great time and who will have
a drastic spend. What I would say is, I'm starting to see a split of sort of people that are willing to kind of separate with those those dollars and people there's that are remaining sort of tight. But we have not seen a drop in reservations, which for us is kind of the tell.
And when you're seeing that split there, I mean is how do you sort of gauge that as far as particular segments where your restaurants are located. Do you see that more so in particular parts of the country than others.
It's across all of our restaurants, So we're in some pretty major, pretty major cities, but we're seeing it across guest spend, right, So we're able to gather the data based on the average guest spend and we say, well, wait a second, why is it a few bucks less? And then we go into like individual checks and what you'll see is people that are celebrating. Our corporate spend
is drastically higher than it was last year. I think that might be a you know, as a response to return to work vis a vis couple of days in the office those few days, people are heading out to spend quite a bit more than they would Let's just say if they were in the office five days a week and had five days of spend but we're also seeing a lot of corporate gatherings small to medium sized groups as well. That's sort of like sweet spot between eight and eight and twenty. A lot of those types
of bookings are coming through. And you know, it's not just families, it's a lot of corporate and workforce spend.
Hey, go back to chef what you were saying about immigration and border policy here and connect back to what you see at restaurant. At the restaurants, well, you know, I.
Can only speak from my experience, and it's anecdotal, right, I'm not coming from a place of data, But I can tell you who our applicants are, and I can tell you where they're from. What we used to have is quite a bit of Latino applicants, especially in the back of house, and that has changed. We are now not as not employing as many, and a lot of those that we are employing our first time hospitality employees.
So I'm not sure if there was a move around the United States and move back home to their home countries, but I can tell you that the hospitality workforce is severely understaffed, and that would make a huge chunk for us. It has to be sensible but it has to be soon and that would probably mark a drastic change in your guest experience, its being better and the price that we have to charge.
That's so interesting to hear, and because I think that part of the conversation often gets lost when we talk about immigration policy, because it's so polarizing when you have Democrats and Republicans fighting about it, and it actually sounds very clear from you. I'm wondering if you do any work in telling your local legislators about this, if you've partnered with any other restaurants to talk about this, because they're serious economic implications here.
It is polarizing, and I think that you know, I'm a small business owner and I'm not coming at it from a political point of view.
It's simply spaces that we need filled.
We do some work with our local folks in each one of our markets. We do a lot to work also in some of the training and onboarding of folks.
You know.
Unfortunately, you know, the hospitality industry is one it is the largest employer in America. But our voice is not quite as unified as I think it probably could be nationally, and that could just be you know, a difference between states and and and also the competition in between.
You know, small businesses.
Talk to us about your YouTube series.
Sure, yeah, thank you.
So, you know, during COVID, for the first time, I had some some some some free time in probably twenty years, and I was looking around the media landscape of on the food scene, what's happening. And what I was finding is a lot of what was out there didn't speak to me. It was a lot of sort of how to, a lot of you know, uh, a lack of why, a lack of why cook this way or why why this produce? And and I felt like that storytelling it's inside of me. It's how we were in our restaurants,
it's how we construct our menus and our concepts. But I didn't see it in the media. And so I wrote some short stories and I was lucky enough to get linked up with Jose Andres Media who who was a co producer and produced these.
These pieces.
You know, it's storytelling in the very simplest way. There's no talking, there's some music and ambient and it's sort of the chef's journey. The chef's journey is about community, and it's about bringing people around a table and I'm lucky enough to be able to be connected with these incredible farmers and fishers and winemakers and cheesemongers, and I really wanted to tell their story, but in a way that was perhaps not loud and ambasticking in your face,
but a little bit more subdued. It was about connectivity and mindfulness.
How do you do this in a way that without without talking?
Well, I think the visual is is quite impactful.
We really spent a lot of time thinking about the best way to tell a story without words, and hopefully what that does is it brings a viewer in and they fill in the story. I mean, I would throw the question back to you, have you ever made a recipe off of something that you saw on television?
I have, yeah, but it always requires me to go back and like google it because it's just the way my brain works, like inspired by it, you know, right?
And I think that that's kind of what this series is supposed to do. It's supposed to inspire you to lean into where did those tomatoes come from? And how are they being used? Not necessarily how to treat the tomato and cut one inch and that sort of thing, because I frankly quite boring. I want to know where it comes from and what was the life cycle of
the tomato, not necessarily one inch or two inches. I find that actually most people would would say no to that answer that they don't cook from what they see on television.
It's it's entertainment.
And the style of entertainment that we're hoping to bring here with our partnership with Calm is one of mindfulness and connectivity.
Yeah, once I get my cooking back caps back on, I will currently be doing this. I'm curious how you pick a particular food for each segment.
Right, So what this series does is it focuses on a very small radius of locality. So within a couple of miles in Long Island, there's a small town called Southoldt and inside of that there's a biodynamic form called KK. There is an oyster fishery called Little Ram, and there's a cheesemonger called Coptapano. And what I really wanted to do is sort of bring you into this place it's very special and dear to me, and show you kind of what happens within a very small radius and a
very intense kind of time as well. Summer of one year ago, basically summer of twenty twenty two.
Hey, John, before we let you go, I am not very good in the kitchen, I gotta be honest. However, I loved the Bear, and I'm wondering if the popularity around the FX series The Bear has led to an increase in people just like wondering what happens in the kitchen, you know.
I think I think there's a lot of conversation around also not only sort of the personality of a cook or what happens during a service. Yeah, so it's beyond the kind of recipes and sort of the action, but also the kind of the people that are producing those things and the kind of pressures that they're in.
I'm thankful for that story to be out there because I think it's one that's it needed to be told.
But also when you've got like a good look in dude cooking and screaming and yelling, there's like great inspiration that hopefully will come to more folks joining us.
John Fraser restaurant ur and chef. He's the founder. If you have restaurants, we love it when you join us. Thanks so much.
This is Blueberg, all right, Tim, So the hype in artificial intelligence, as we know, is everywhere. But what about when it comes to the intersection of AI and retailers. Well, there is a company that is powered by AI that is aiming to bridge that gap and makes selling easier for companies, especially when you're talking about Bloomingdale's, Macy's, the gap back to school purchases obviously starting up right now
and then also ahead of the holiday shopping season. Joining us now is Perva Gupta, co founder and chief executive officer at lily AI, joining us on zoom from Palo Alto, California. Thank you so much for joining us. Talk to us about what your company is and what you do, just to set the scene here.
Thank you so much for inviting me. Jess, It's so nice to be here.
Yeah.
So my company is, it's called lily AI. We are working with some of the largest brands and retailers. But let me ask you a question. I'm sure you shop online all the time, and I do.
I've gone through this.
Have you gone through an experience when you're looking for something as simple as a navy blue sweatshirt and you are getting no results or you're getting even worse. Adalypsticks and slippers, and so it's not that they don't have navy blue sweatshirts. That's a basic search. But the reason why that's happening today is because the way that the product, the way this product or the way the products are described at retailers are in the language of midnight French
terry at leisure. So like, that's why you're not finding it because it's not called navy blue sweatshirt. It's not labeled in the language that us as consumers use. And so that's what Lily AI does. We are using AI to bridge the gap between retailers speak and consumers speak in retail and this is the perfect type of problem
that AI can come in and help solve. To understand the language of the consumer, use AI to extract those attributes out of the images of the product catalog and then help the consumer experiences.
Okay, so you got to explain to me, like I'm a five year old, how AI is being used here and how it's training itself. It's retraining itself. Take us through the basics.
Absolutely. I'm also happy to go a little bit further up here with all the hype in AI to sort of also a sept the context. I mean AI is being used for years now. It literally started in nineteen fifties, and fundamentally, AI is when machines are mimicking human intelligence, right, and recently, generative AI is all the hype everybody's out of chat GPD. That's one type of AI. There are so many other types of AI, like computer vision, natural
language processing, all of those types of things. And so now coming back to your question around how we use AI, we have basically built we use a type of AI called discriminative AI where we have created a lot of clean training data where merchants on our team over the last few years have manually labeled all of the products and added a lot of the language of the consumer on every single product.
To do that kind of process seems very patient.
Yes, it's a very very difficult process where you almost have to create the definitions in fashion in a very very clean mathematical way, where you know our merchants know the difference between boho and Boho chic, for example. Right, it needs to be really really clean data for AI to understand all of the different types of language that our consumers use or just overall consumers use. And so
it's it's it's not an easy thing. It's a very very difficult labors process that we have gone through to be able to create all this clean training data which we then fed to our AI engines which now do which are now doing a really good job of predicting all of these attributes on these products, which is basically the images. So in short, we have built the technology that can extract attributes in the language that consumers understand out of images.
So how do you how do you build these relationships with the biggest retailers out there, including Bloomingdale's, Thread up the Gap? How do you do that?
Yeah, it's it's been a super exciting journey for us where we've had the we've had the pleasure of working with some of the most iconic brands and retailers in
the world. It's the The overall pitch of Lily is as simple as you know, going to any of these sites where we are able to show in the search bar, do some searches and show to anybody that there's so much that is there's there's so much money being left on the table, which is a like lots of revenue for the business, but also from a consumer experience, perspective, there's so much that can be done to to make sure that your consumers have a really good shopping experience.
And so it's not that difficult to sort of explain to some of these large brands and retailers the opportunity here, because this is like a search example like this for example, is very easy to understand. I think the bigger picture for all of these brands and retailers is also and they get it, is that this kind of a gap between the merchant's speak and the consumer speak not just impacts their on site search, but actually impacts their entire business.
So all the way from when they are forecasting demand about a product to when they are doing all the advertising, you know, for their entire catalog, to when they're selling the product on their e commerce store, throughout the entire retail value chain. Because the fact that that navy blue sweatshirt is is not called that way, is not understood that way, and it's understood in different ways, it has
a massive impact on the entire business. And so that's the other thing we are able to drive and make all of these brands and retailers understand, which makes our job a little bit easier are.
You able to gauge shopping trends?
Absolutely? You know, that's that's that's a super exciting part of our business. You know, trends, especially in the lifestyle category, make a big part of what what keeps the consumer, you know, going back to to just shopping. And like this summer, Barbiecore was a massive trend. Before that, there was quiet luxury, and as we are heading into the New York Fashion Week, there is going to be like, uh,
there's going to be sturdy comfort. Uh, there's there's all sorts of trends, and we are in the business of operationalizing these trends, and so like if if we take Barbiicore as an example, that trend became a trend, you know, even before the movie came out, and so like feb March is when that start, when when that term started
becoming a massive trend. And so we were able to help all of our customers attribute their entire catalog appropriately with Barbiecore, so that when consumers were searching for these things, they were absolutely able to find thing that they liked.
Well, thank you so much for your time. We'll have to have you back again to talk about the shopping trends and the consumer. Pervagupta, co founder and chief executive officer at lily AI.
We'll have more coming up.
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