Ralph Scamardella on the High-End Food Business (Podcast)

in terms of total revenue. We've previously spoken to several other restaurateurs, but this is the first time we've had a conversation with someone who is in the restaurant business at this sort of level in terms of being not just national but global. They have restaurants in Australia and Singapore and elsewhere. If you were at all a foodie, if you're interested in the food service industry, if you're interested in understanding what makes certain restaurants successful and others

not so successful, you're gonna really enjoy this conversation. With no further ado, my conversation with Ralph Scamadela. My special guest this week is Ralph Scamadela. He is a chef and partner with the Two Group, one of the most

successful restaurant and nightclub companies in the United States. The two group operates in New York City, Las Vegas, Los Angeles, Sydney, and they run three of the top ten grossing restaurants in the United States, including the single biggest grossing independent restaurant, Tao Asian Bistro in Las Vegas, which in did over forty two and a half million dollars in revenue. Scamadela oversees all of the chefs and concepts in New York, Las Vegas, l A. Uh pretty much. You probably have

eaten his food and not even known it. Uh. And last year Madison Square Garden purchased a controlling interest in tal Group. Ralph Scammondello, welcome back to Bloom. Thank you very much, Berry, pleasure to be here. So I did that intro. I should ask for a raise, You definitely should. So I've been looking forward to this conversation. I'm a little bit of a foodie and have eaten in some of your restaurants. But I want to go back, really to the beginning. How did you get interested in cooking?

Is this something that you were passionate when you were younger? Did you just kind of develop it later in life. I grew up in an Italian American home, so my parents were always My father worked, my mother was always home cooking. And I got a job working in a restaurant when I was very young, and a chef in that restaurant took a liking to me and just would help let me help out in the kitchen while I

was doing bus play work. I was doing way to work, and he encouraged me to go to school for it and really so that I had a knack for it, and he really guided me to go to New York City Community College and then uh, when I graduated high school, I went to Grady High School in Brooklyn. It's a tech vocational school. I wanted to be an electrical electrician, electrical engineer. I wasn't sure, but when I he encouraged me to go to New York City hotel and restaurant.

And when I graduated high school, his good friend of his was the chef at the Plaza Hotel in Manhattan, and he got me a job working at the Plaza Hotel. So it was like from being in a small restaurant in Brooklyn to the biggest hotel pretty much in New York or anywhere in America. Was unbelievable. So do you find most of modern chefs today? Are they going to restaurant schools like huminary institutor elsewhere or are they a

combination of self taught or mentored along the way. Where where are most of our I think most of them go to school? But there you know, it's not there's no one that's the one thing that's great about the restaurant business. Now there is no one path of success.

Right when I was growing up and you wanted to be a chef, and you wanted to be an accomplished chef, you had to do your internship and then you had to do you had to be a comee in a French restaurant, You had to work for a big hotel, you had to work for a great chef, and you had to go through this long, arduous path. Now you could develop the greatest hot dog, the greatest burger, and you can be recognized for so many things, different things. Not only is a chef, but become a successful business

person doing it. So I think that to be the most successful, school and education helps you not only with knowing how to roast the chicken, not just using that, but understanding the business. What to look for in the business, how to make the money, how to hold onto the money, how to spend the money correctly. So it's more than just the base technicals of cooking. You really have to underthink like an entrepreneur, not necessarily just a chef. I mean when we went to school, was you had to

take hotel accounting, accounting, beverage and inventory control stuff. Why do I need this? Like my kids would say to me, Oh, why do I need algebra in high school? You're never gonna but you do use it, and learning those skills, those mathematical skills and standing business is super important to be successful. So you've been working in the restaurant field

in New York City for a long time. Not too long ago, we spoke to Bobby Flay about opening a restaurant in Manhattan, and he described it as the most difficult place in the world to open a restaurant. He's never opened a restaurant Singapore. That's yeah, because the government is, you know, on top of you. But New York is pretty very restrictive, and it really comes from lots of people for years taking advantage of the system, like building

people not falling building permits correctly. These people that stole the gas downtown and like is he? That was one of my favorites, Carnegie restaurants. Who steals gas? What if it's not like millions of dollars and I get it man, and the risk is definitely not worth the reward. That that's totally asymmetric. Let's talk about some of the technological advances that we see in modern kitchens. How has technology changed?

Is it easier to run a big kitchen or is it just an additional complication using It's a little bit easier to run it. You know, you from the computer systems that help you control inventory, watch, purchasing to just managing the kitchen, managing employees payroll. Now, it used to be when I started at the Plaza tell my daily rate was two dollars and thirty six cents an hour. It's like fifteen hour, so you're really managing people on the half hour now, So technology of punging in, punching

out managing those people, but also the cooking techniques. That's what I was gonna ask. There's so many new technological gadgets that you could use, from from the souve days to down the road. How does that help or does it just make it more challenging. Uh. No, it does help out a lot, especially the Combie ovens where they heat, they hold, you can use less employees and the product.

You don't really lose anything in a product. If it was years ago, you would have to have a whole crew prepping and then putting it in oven, taking it out, cooling it and reheating it. There. There's technology now where you make items, you cook them to a certain temperature, you'll hold them at that temperature and then you really reheat them and serve them out. So especially for big banquets. We do a lot of banquets in Vegas. It's been

a big, huge help for us. But some of those, like Suvie techniques, I think those some of that is come and gone. I think that in the beginning, when it came in, it was a cool idea and a lot of chefs used it, but I think it's gotten to the point where it's overused. I don't really like using it for red meats or heavy meats. For chicken and certain vegetables, it makes them great, but you've got to use some of those techniques are you have to really understand how to use those and what the outcome

is going to be. Not just to say oh, it's suvied and that's gonna make it great. That's just not the not the case. Let's let's talk a little bit about the cooking aspect of being in a restaurant. What does it take to make a great chef? Well, that's uh. Firstly, you gotta have passion for it. You know, you gotta want to do it, and struggle through learning, self learning,

taking instruction, taking a lot of criticisms. We also have to like any artist or artists in I like to say, forget about artists, but you have to learn all the techniques of proper roasting, proper grilling, proper stain, proper cutting, and a lot of I think that's some of the things that get lost is really understanding all the basic techniques and knowing how to use those techniques and combine them.

How does that differ from someone who is passionate about food at home and it's a pretty good chef on their own. What does it take to transition to actually being a head chef in a restaurant? Uh, cooking and being a chef, to me are two completely different things. Chef has to be a good cook, but a great cook can't always be a great chef. There it's a chef is a person who runs the business, who runs

the back of the house, runs the kitchen. Has to know what all the other employees are doing in the kitchen, has to know, like if you're on the STA station, everything that's in that state station, what your musing plus is, what your recipes are. You're correct, You're executing those recipes correctly, over and over again. It's at home, you're you know, when I cook at home, I make grilled chicken, I'm making it famili and the kids in the family, and

that's it. And when you're in the restaurant, you may you may be making hundreds of them. So if you come in at eleven thirty on Tuesday, you want to come back at a elemit thirty on Friday, have the same exact experience that takes a chef, somebody with skill who knows how to teach, who knows how to set that kitchen up correctly, and make the teach those techniques and set up the musing plus correctly. So so it's really a matter of organization and running a team more

than just being a skilled correct. Huh, they're they're interesting. So when you're you run a number of restaurants, how do you spot talent? How do you identify who's going to be a good chef, either to hire or promote. It sounds like a really challenging thing. Talent. You know, that is a tough one because there are there are people, like I said, who can't cook, and then when you put them in a roll over responsibility just a mere fact of the anxiety of having to watch over other people,

be responsible for other people. It takes a lot for for employees and people to get over. One of the things is you'll see somebody who's working. He's a hard working They're a hard working person. They're consistent, they cook good, they come up with specials, they come to you, they interact with you. You see how they move, how they just you know, there's a lot like watching a great

basketball player, a great baseball player. They have a feel and a style and lots of moves and and you pick up on that, and a lot of these people can once they get to the next level, just dealing with the anxiety and stuff on them. And I think we try to teach them a little by little of Okay, you're a great cook, you do a great job on your station. You've really done a lot of these things.

Now let's teach you how to be a chef, because I always say to guys, if you're a great whatever sote guy, are a great grill guy, you can only make so much money. You're not gonna pay the saute man the same way you would pay the sus chef for the executive chef. So for you to grow into not only make more money for yourself, but grow the business and educate yourself and maybe do whatever you want

on your own, you have to overcome these challenges. What are the differences and responsibilities for the sioux chef versus I assume the executive chef. The buck stops with them. There's charge of everything from ordering to food quality to what the recipes are. The next uh lieutenant, the Sioux chef, what do they do? So chefs do everything. The chef does as little as possible that those guys are always working and those uh that used to be When I was a Sioux chef, I made sure the chef had

very little to do. I mean the chef, the executive chef has final say over the menu, the food the He's the ultimate. They are the ultimate, and what the food quality is, what the dish looks like, tastes like, when it's executed, and the viability of running that business. They're responsible for food costs, are responsible for labor costs. We also make all our chefs responsible for the facility.

So it's taking care of the equipment, managing that equipment, because buying a out, you know, a blender item makes this ovens a forty dollars. These days, it's not like you buy an oven for six hundred bucks, put it in, it works. Everything's so expensive. So you mentioned taste. How do you two questions on taste? How do you make sure a dish is consistent not only from meal to meal, but you have restaurants all over the country. How do

you keep that consistent? And when you're designing a dish, are you trying to be as broadly focused as possible or or are some dishes designed for a special niche niche audience and a special bunch of It's definitely a little bit of both. At the answered the first question. When you get a recipe at home, you look at a recipe and it's a cup of this, a teaspoon

of that. One of the things we try to do is really measure everything out, so someone's on the line and it's a spoon of this, a spoon of that. It will always be the four ounce later will be. It's never a pinch or season to taste. I think salt and pepper, and you really see it. You'll go to we have restaurants in New York where the food is seasoned here and people go out to Las Vegas and have the same dish. Oh, it didn't taste the same.

It didn't. The taste of that clientele in Vegas is totally different, different age, different demograph, level of salt, different level of pepper. And then you go to Los Angeles and it's different again. They everybody had all their you know, McDonald's does the same thing. Big corporations will see what people like to eat and how they like dishes seasoned or levels of seasoning, and they'll they'll play up to that. You have to adapt to the local. Huh, that's fascinating.

Never would have guessed that. So you mentioned you cook at home for the kids. What do you eat at home? How different is it from what you're cooking in the rest Well, first I have to do all the work myself. When I'm at the restaurant, there's always somebody can say, get this, get that. Cleanness, pats you with like an assembly line with the kids peeling potatoes, nothing like that. And I'm not always but I you don't. Again, my my wife and I elait this, and then my son

will only eat certain dishes. My daughter, who's thirteen, will only eat certain dishes. So I try to make a little bit of everything for everybody. But now the summer is great, so it's all about barbecue. It's a salad, one vegetable and then grilled meat and grilled fish. That's why I like the summer makes life easy. Let's let's talk a little bit about life in the kitchen at a big shop like yours. Um, what's it like being a chef? I would imagine the hours a pretty brutal.

Hours are brutal, but I think that anybody who's in any profession has brutal hours. I don't you know, talk to a lawyer or an electrician or somebody. They're always working lots of hours. They're working hard. Huh. The one thing about the restaurant is that It never closes right, even if the you close for dinner or service ends at eleven o'clock, there's always somebody there's cleaning, is putting stuff away, getting ready for the next day, checking mesu

plats for the next day. The chef is always forecasting for tomorrow, looking at what he needs, for what they need for tomorrow, who's coming in this day and age employees.

Employees calling out is always a big thing. So we're always jumping in and helping out on the line and moving How do you balance that with a personal life If it's that, it's tough, but you know, one of the things that we do is that unless there's some big circumstances where got people have to work six days a week or work a double shift, we really focus and emphasize that everybody takes it two days off, every

takes their vacation. When you take your vacation, you make sure you leave your phone home, don't answer emails, don't reply to email if you are answering those emails, So that downtime and off time is super important. I'm a strong believer in it, and I make sure that the whole team follows that rule. So years, many years ago. I worked in a kitchen um as a short order chef and a waiter in a bartender in college, and I always noticed that some kitchens would really well oiled machines.

Everybody knew what they had to do and it was pretty clear how things ran. How do you scale that up to an operation the size of yours. If you're doing forty million dollars in sales and just one location, this is really a military type operation, isn't it. It is a military type operation, But we definitely take that same focus that you said. It's a small mom and pop and we take every station and we break it down.

So if there are seven stations in the kitchen, each station is responsible for nine dishes or eight dishes, so you can really focus in on a soux. Chef will walk around and make sure they taste and monitor those. So as the food comes up, it's a huge past. The line is about twenty five ft and everyone is putting up the dishes that they're responsible for that part

of the menu. So if you compartmentalize all the food, it's not like you'll go there and make the salad, then run to the other side and make the noodles. Then run to the other side and make the fish. Every single person has a set of responsibilities the measing, plus lists and things that they have to be ready, and we monitor and check those things before service, enduring services plus meaning everything in its place, sliced. As an order comes in for pattie, you're not slicing the radishes,

you're not slicing the chicken. Everything is ready to go and it's assembled. When when the order you mentioned there are seven stations. What are the seven stations? Uh, there's garminer, pastry and tow would be dim some grill, hot apps, saute and walk in the kitchen, and then there's a sushi station which is a free standing and um, what do you think are the biggest misconceptions people have about how restaurants run? And I asked this having as again a person who goes out to eat a lot I

and was a waiter. I'm always surprised at the comments people have for two waiters and it's like, oh, you've obviously never worked in the kitchen. Otherwise you've never asked I wanted a big misconceptions The chef is actually cooking every dish. That's oh my god, what have he don't know. And it's impossible for especially in a restaurant of our size, that the chef is cooking every dish. But he's he's

creating every dish. He's coming up with it, and he's monitoring and working with the team as they produce it. And for us, like someone came in one day and we had the lobster delivery. Came in and there were probably foeces of lobster and somebody said, oh my god, I thought you used frozen. Why would you think that

we used frozen. We get it delivered twice a week from Maine, you know, we take it, we break it down, we we we cook it, and we get it ready for that service, and we do it fresh every single day. So there's a lot of misconceptions about how those things get done. What does it take to create a new dish, what does that process like? So usually one of us will come up with an idea, all I have an idea, or the chef will have an idea, and then we

we kind of collaborate on it. For if it's seasonal now summer and spring is great, lots of different products come in and we'll test those out and I'll make something, or the chef will make something, and then we have a couple of corporate chefs will come in and then everybody will collaborate on that dish and add a seasoning or take something away and really try to maximize not

only the flavors, but the execution of that dish. Where are we going to pick it up from, how is he going to get How is it gonna look and taste exactly the same way we just made it. So that goes a lot into the thought of how to make a dish, like is it coming out of the station where we're holding the means and plause? What do we have to make ahead of time? What can we make at the moment, and how can we get that same experience over and over and over again each guest?

That is, how how often do you change up the menu? The bulk of the menu is kind of static because there's hits, those big famous hits that everybody loves, Like going to a def Leppard concert, you gotta hear those ten songs. That's all that people want to hear. And then there's about a certain percentage that we swap in and out every year, but there's always special So once

a year. We change the menu, and it's probably teen per cent of it that goes on and goes off based on seasonality, and something's work and some things don't work. But specials are always ever changing. We run four or five specials a day. Let's let's talk a little bit about the business of running a restaurant. You have some really big operations in New York, in Las Vegas, in Los Angeles. I think I saw a list that three

of the ten top grossing restaurants were talent groups. How do you make sure that every customer experience will hold the seasoning aside for regional difference. We call them guests, though every every guest gets the same experience no matter where the restaurant is. I think it's for us. It starts with finding the right employees, are people and teaching them hospitality. I think that you can you have to

find good people. Right. You can teach anybody how to cook, you can teach anybody how to do any of the basic skills that you need for the restaurant business. But finding the right people, finding a good people who are into the hospitality business, who really want to give the best guest experiences. The most important thing that we do finding the right people. What does it cost to open a new restaurant in a city like New York of

Las Vegas these days depends on this square foot. It's probably two thousand dollars of square foot, three thousand dollars of square foot. That's several millions, seven million dollars, right. What Why is the failure rate so high for restaurants? I don't know if this is anecdotal, but I always here are gone within three years or some number like that.

One of the things that just because you make the greatest souffle or the greatest steak, you have to to me for us anyway, The real estate is the most important part of the deal, right You have to have the right space in the right location at the right rent, and one wants all those If you're paying exorbitant rent and you have a snowstorm, something happens business, you know, like so you have to plan for those things. You

have to plan for war. When the business ebbs and flows and the rent is constant, pay them regardless of what happened. People in the Hampton's doesn't matter. That's it. I think one of the things that's one of the biggest misconceptions is someone That's why going to school and understanding the business end of it is super important. Understanding projecting out, Hey, I can do forty dollars a week in business, my rent factor is six percent. I can

always make money. If I do forty thousand a week and I dipped the twenty and my rent is seven, I can still make money. But if my rent is double that and it's and my rent fact that goes up to you're gonna have to make care your in trouble. So so real estate costs in in a big city is the most challenging thing I think. So yeah, what about overseas? I know you guys have places in Australia and you mentioned Singapore more or less the same concept

or you're not dealing like San Francisco, New York. The rents have to be crazy. But in in Sydney and in Singapore or in a hotel, so we're in star In in Sydney and Marina based sands, so we do have rent deals, but the hotel or all partners, so it's a base rent and a percentage rent, so it's manageable. So it doesn't matter you're someone, it always managed. Is that true with most So there's a sort of odd thing here in New York that there are a lot

of big hotels that have restaurants inside. Some are fairly famous named brands, and some are lesser known entities. Is that financing structure similar where the hotel is subsidizing the rent because they want the space there for guests or how do they Each one is individual? But I think you find more and more now that the individual operator puts up very little of their own cash and the base build or the hotel will finance the whole project.

There'll be a partner and you'll get less of a percentage on the front end and less a percentage on the back end, but they'll finance the whole project for you. So that becomes fine, actually attractive. There's little risk when you're a little risk less risk. There's always risk of you know, getting employees not making money, signing to a deal that may not be as lucrative as you want, doing all this work and finding out three of the net is nothing. So why is it that so many

people seem to be attracted to investing in restaurants? Is it just a hobbyist thing? It's like a movie or Broadway show. Right, it's like the worst investments in the world. Don't go that far. We're looking at the money. I mean well, I mean it's super sexy, right, and it's it's action, and it's people, and it's the The afrodisiac of opening a restaurant is great. Man. People come in, they see you, and people who wanted to stand it for the business or very are smart about investing. And

I don't know, it looks easy to everybody. I guess the restaurant it makes hard and it's done the the machine. That's it. Oh my god, they charged in twenty seven dollars for a chicken. I go to the store. Its five dollars. How is that possible? Yeah, it's so not true, but that's what people think. So if you had to decide the most important job in the restaurant, not counting

the chef, who do you sign that task to? Well, you know, I always say that every single person in that restaurant matters, from the person who sweeps outside, receives the delivery and puts it away, And think that every single person in that chain has a a very important part to play in a guest experience. Coming in coming up to a restaurant that's dirty on the outside, you know you want it clean, you want it sharp. Every single job in a restaurant is important. I have to

totally agree with you. We had a very nice meal the other day at a very nice restaurant. I won't mention and the bus boys, I don't know if they were trying to break the dishes, but they were just and it was just one of those little things that I noticed that chief a really nice restaurant. They should teach these guys not to slam um everything down. It should be more gentle, because half the restaurant's had whipped

around every time, and that happened throughout. I was shot people, and it takes away from the experience, Like is the bus way important? Yeah, sure that that person is very important. From the same way, you walk in and the major d or the host greets you and says a low and then the server comes over and takes your order in the chef and the the person who received those goods, did they take care of them that they put them away the right way so the food doesn't spoil everything.

And it's every single thing matters everything. It doesn't it has a big impact on the experience. Um, do you have any thoughts on this tipping or not movement that seems to be gaining It's it's you know, it's difficult because tipping in upstate New York or smaller counties where it's super valuable to the employee, and whenoun employee or waiter gets serving gets stiffed in one of those, they're

not making any money. In New York it's different. There's the yell of people coming in, the amount of business that we do, so paying a server thirteen fourteen dollars an hour is very tough on the restaurants in New York and I believe in the end it's it's changing the face of the restaurant business in New York City, and certain restaurants with servers will be elite kind of high end restaurant because most people won't be able to

afford it. I mean, you think we're better off just keeping tipping as it is and not ye, I could totally see that. So when you want to go out for fun, what sort of what are you looking in in a restaurant when you're dining out? So I have different if we go out to eat as a team. We go to look to see an experience. Who who's doing something in Asian food, who's doing something in Italian food?

Or the dishes interesting. If I'm going out with my family, it's someplace where my kids can destroy and have a good time and I don't have to worry about them and just have a nice glass of wine and relax. So it's all about what we're trying to do and what we're trying to accomplish. Will go out and as a team and will we went to that in steakhouse cult and so ten of us went out. We ordered

everything on the menu. We tried everything. Literally, how many ten people just bring us two of these like I'll always go like, there's a green salad, we don't want that, but bring everything else? Do people recognize you when you

go out? You have to have other people in the restaurant industry say some people, I mean, because nobody ever try to be as incognito was possible, not that anybody would know me, but you know, the restaurant business very incestuous in the city, so service could have There was a bartender there and a server that worked for us in town. Something knows automatically does that mean you get better service or it depends on what depends. But they had a good time at town or not. I don't

I don't know. But so when you are looking at a restaurant, what what would it take to get you to invest in a restaurant that wasn't part of your group? What would you be looking for? I know you probably are precluded from doing that, but but if you were thinking about that, like, what what sort of things catch your eye as a potential investor? Want to things the concept? What the concept is and what it's driven by. Is it driven by a steakhouse? Is it a concept that

goes across all different genres? Is it a businessman restaurant or is it specific to a ethnic cuisine? What's the location and what what is the P and L say? What do the multiple say? Are they do they have

the right scale? Are you charging enough? So if it's only sixty seats and people say well we can do three million a year, three million a year at sixty seats, how much money are you gonna make off that investment if you leave you if you took that half a million dollars and lifting in a bank and made two percent on a CD, you would make more money and it's safer. You have to have the right size restaurant with the right concept and the right location and enough

scale to make that investment worth it. So most of what I see with the Towel group, there's there's tow the whole run of Asian restaurants. Um, what are you do in terms of steak and in terms of Italian we do Lava, which is an Italian steakhouse. We have one in New York, one in Las Vegas, one in Singapore, So that kind of encompasses the Italian Italian American kind of food from New York, New York neighborhood food with steak. And we have Legacy, which is a seafood restaurant in

the Moxi Hotel, Tao Beauty, and Essex Vandal. So it's lots of different concepts, but Tao is definitely our biggest concept that we have and it's the most famous. And um, when you when you go around to restaurants in Manhattan is part of the back of your head always running those numbers, like what they're doing first, seeing what ideas I could steal and take it make our own, because

you know you're always looking to improve yourself. Anyone who says we do everything perfect and we do everything great and we do the best food, the best guest experience is just fooling themselves. You're always looking where I'm always looking for that edge and seeing what people are doing. Is there any innovation and to see kind of business are doing and in a location, is it's sustainable? Is it? Is it gonna be a threat? Is it gonna be something?

Who or part of that concept that maybe there is something there and they can make something of it. You know, you're always thinking when you're looking and seeing what's going on. Interesting. Can you see where they're investing the money in right that they spend money on five in flowers and no money on linen and linnen? Is that really where you want to go? So I'll interesting? Can you stick around a little bit some more questions for you. We have

been speaking with Ralph Scamadela. He is chef and partner at the Towel Group. Be sure and check out our podcast Actually is where we keep the tape rolling and continue discussing all things fine dining. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. You can check out my daily column on Bloomberg dot com. Follow me on Twitter at Rick Halts. I'm Barry Helts. You're listening to Masters in

Business on Bloomberg. Yeah, welcome to the podcast, Ralph. Thank you so much for doing this. I find this topic absolutely fascinating, not only because I like to cook a little bit and I certainly like to eat um, but wherever I go, I'm I'm burdened with that mathematical knowledge of looking around and saying, it's a really good restaurant, but how the hell are they making any money? If a Friday night, this place is half empty. The food

is great, where is everybody? Do you ever have experiences like, yeah, Thane having a great time doing a show also and it's great. Uh. You know, when you not only look for the food experience, but you always look for the business experience of like, what's going on? What are they doing?

Why aren't they busy? Why are they busy? That's lots of you know, people will look at taw and say, oh my god, they're so busy, let's open up right next door, and they don't because is it the business in the areas I think too is especially it is the destinations. Destination is a special experience. No one's walking by and saying, oh, let's pop in for a snack. Everyone's going there, and it's a completely immersive experience. Right.

It's it looks great, food is good, the service is great, but the feel and the vibe of the place, it's it's all about going out and having the experience. So there's a restaurant group on Long Island. I won't mention their name, and they just opens up this immense restaurant, Mediterranean restaurant, of which there are a number of on Long Island. Um uh Chima is, Juan Lamani is another one, and so a third one is Giant Place of MP Taverner is a third one. But this giant place opens

up and we walk in and it's just gorgeous. It's spectacular, and we sit down for dinner after making reservations. We family members in from out of town, and I'm shocked. Everything is mediocre, And I know the restaurant group, the rest of the restaurants are actually really good. It looks like they put in five million dollars building this place. So leading up to the question, when a restaurant opens up. How long does it have to kind of adjust the dials and trim the sails and get it right. My

wife is like, we're done with that. We don't have to go back there. I'm like, I think you got to give it a couple of times. You know, people will say six months. If the service is really really good and the food's okay, people will give it a second chance. If the services really bad and the food is okay, people won't give the restaurant a second chance. Really, I think you gotta the food comes second to the service,

second to the service. I think interesting and initial reactions to people coming in and saying I think he sometimes you could take three months, depending depending upon how far they're reaching right what kind of cuisine it is. Is a real simple cuisine and they're executing it poorly? Or is it real simple cuisine and the buying poor ingredients? I mean, you could if you go out a lot

and you're somebody like you who knows the difference. You can tell the difference between a really good steak and a real bad steak, and steak is the easiest piece of fish or quality of the produce, and you're saying here they built this restaurant's great, and they're using crumby tomatoes and they're using really poor fish, and steak quality isn't good. You know that they're cutting back on the most important thing. I think that's one thing that we

never do. You may like or not like, but we buy the best ingredients and let them speak for themselves because people will always be able to tell that apart. There's a restaurant two or three times before I write it over really, so I'm two x and then you're you're done. And I always noticed a favorite restaurant, the food will be really at a high level for a long time, and then it starts to falter. And you always wonder is this an aberrational meal or is this

the beginning of the ends? Because all restaurants seem to have a natural lifespan with hand. You know, you go to Smith Lenski any day of the week and you know you're gonna get a good steak, and they've been there for a million years. But that sort of longevity really seems to be the exception, isn't it? In this day? And as yeah, I think one of the things is not only the location and the rent, which kind of

squeezes things down. But I think they own their buildings, so that might take them what they most places when they're in trouble. Instead of buying a prime steak, that's I mean, we pay twenty one dollar a pound for primes like week, so what does that translate to fifty dollars of steak? I think people will buy less equality ingredients to make up the difference in perol, make up

the difference and profitability. And I think that once you start doing that, the guests will notice that, especially if you go there three times a week or once a month and all of a sudden you're eating the same thing and you know it's different. Let's say maybe it's an off night the next time you go and it's bad. That's it, all right, everybody has an off night, So yeah, it's there's one thing when it's when it's a one off,

then when it's really that. That's something about reviewers. They'll come in and if they do it over a two week span or a month span, that's different coming in on one time when the place is busy and maybe just getting a bad experience. How do you how do you judge any business? You know, It's not like it's a movie where it's been seen a hundred and fifty times and everyone's vetted it. You're you're having somebody make the meal. You don't know what happens in the kitchen.

They're bad experiences, absolutely, but you have to. It's one of those things where you have to give it three or four tries before you're actually or go to a couple of dinners and say, you know it, really, from beginning to end is a bad experience, or from beginning to end it's a good experience. So so let's talk about reviews a little bit um setting myself up to

get shot. In general, I think the better reviewers and let's let's include the New York Times, the Wall Street Journal, New York magazine Time Out will go at least two x. But here's the bigger question. I remember back in the day a review in in a major paper, and I would say the time still has this power that's at that restaurant is jammed for months and then it starts to attend. You eate. But it's not the same sort

of hammer it was twenty years ago. That wouldn't Mimi Sheridan or Brian Miller or one of those big reviewers and John Marini when they would come in, that would make or break it. Now you take the subway and there's five reviewers. Everybody's a Yelp guy. Everybody's something terrible. Forget ye reviews. And at one point in time that the goats was great. I think Google kinda took the power.

Is looking to drive advertising centers, right, I can't say something bad about somebody who could possibly advertise with you. And that's what Yelp does it. You know, I guess there to me a lot of those outrageous reviews. They just trying to drive traffic to the site. Right, So you get on either and those guys and they just have they hammer us like to no end, and it is impossible to get some bad meals. Yes, is it possible that everybody there's a great job but us impossible.

We wouldn't be where we are. You know who we are, and with this reputation, the success speaks for hammer us. But they're trying to drive. If you went and said something bad about uh, some small Italian restaurant or some small Asian restaurant, would anybody care? No, But if you say something bad about towers says something good about town. It drives traffic, That's what it's about. What about speaking of clicks? What about Instagram and people photographing dishes? Does

how significant has that become? Does that affect presentation of people aware at of of that subsector of diners who want to take everywhere? Everything is the Instagram moment? Everything, I mean a lot of some of what we do is geared towards the Instagram moment. But I always say, if people will take pictures of something, that's great and Instagram and that's great. But a lot of the stuff you see on Instagram is almost inedible. Right, stuff on

the giant towers makes no sense. What are you gonna eat? Like something has got five thousand ingredients with cheese poured over it that nobody nobody, So so you're you will put you as on the fence with Instagram. No. I like Instagram. I think for me it saves me probably five six thousand galleries a day A Right, you don't have to go on need You can look at a picture of it and kind of figure out what's in it. You can pick up an idea and the description of

the dishes there. I personally like Instagram. I just think that for it too, what the average person likes on Instagram doesn't really translate to what a good meal would be. Really. I was reading that too long ago that there are some specialty ice cream makers out of Brooklyn who have

redesigned their labels to make them more Instagram friendly. People are literally snapping photos in the frozen food aisle of your favorite I think that that's but that's one thing about the restaurant business now, there is no one path to success. Right guy can come up with something Instagram and Instagram like um, black tap. I mean Instagram made them those those shakes and instagramming those achs and and

they're great. I mean, it's unbelievable. They do a great product, but they were struggling in the beginning and they hooked onto Instagram, and Instagram helped promote their business. So when you go out to eat, tell us some restaurants you like, Where do you go in New York? Where do you go in that are not too group restaurants? Where do you go in Los Angeles? Try not to go anywhere else. And you know, I try to conserve as many. You know, my favorite place in l A Is Republic. I don't

know if you've been there. It's the old Librey of bakery. The food is really good. The chef is great, and it's seasonal and it's fresh, and it's non threatening. I like and where people don't have to think so much when you're eating and just order something and it's the food is good, the service is good, and the ingredients are really fresh and well made non threatening. To tell us about some other memorable meals you've had anywhere in

the country, anywhere in the world. Well, one of the play Hong Kong is one of the dishes that we have on the tow is a snapper in the sand, and we had it in a place in Hong Kong and this guy with the server was unbelievable. It had like these big fishing boots on white fishing boats and we went over picked the fish out. It was like dancing in the food and the dish was like unbelievable. So I went into the kitchen and there were three cooks on a walk and I just was trying to

talk to him. Nobody said, I don't know, nobody ever stops here. I don't know, you look like you belong in the look belong right. You could put out a chef coat and pretty much go anywhere. But people said, nobody stop, nobody stopped right into the White House if you want, and uh so they weren't really saying anything. And I went down the block. I bought a case of beer, brought into the kitchen, gave each guy like four or five beers, and they told me how to

make this dish. Right there. I was like, that was a great experience, cheapest acquisition cost that that's amazing. How about in the United States? What other meals have you had that are memorable? You don't strike me as a gastronomic sort of no, you know, I look at food and I say to myself, what what some of those long meals where you go to uh those tasting dinners. I don't have the patience to sit through one of those.

I don't knock anybody's food food in a restaurant business on any level, from the guy who sells the halal guy in the street outside to to you know, per se. It's all hard work getting people to come in, guess to buy the stuff. But for me, I don't like sitting there for four hours and eating and drinking and it's,

you know, seven courses paired with a wine. If I get a good one contail and a really good bottle of wine with dinner, I'll always pick a wine that will go well with an appetizer and an entree, seven different wines. By by the time you're on your seventh course, with the seventh point, you're either drunk or tired. Everything kind of tastes the same. And it doesn't to me, it doesn't make any sense. I was in Barcelona in September and we went to this one miss three Michelin

star rated restaurant. I'm not exaggerating. When it was twenty courses. They were all tiny little things. But even still after the tenth it's like, all right, I'm good, Wait, we're only half way, and the wine just kept flowing. It was it was at Barcelona is some of the best food in the world. It was amazing. But last time we went to Japan, we went to four three star Michelin restaurants. Each one was worse than the next. Just going on to so, you know, to a sushi place,

do you are you picking food out of you? Just do and say to the chef, give me what you got, give me what you got and you're happy with that. What do you like for sushi here in New York? We went to Nedda, but you know, I like to um sushi by Gary. He's always good man. He always does a good job. Simple, it's fast, it's clean. Sushi Seki on twenty three is very good. Also tell us what else? What about Italian? What do you do when you want to go out for Italian and not always

cooking home? You know there's something really good. Yeah, cook at home, but there's some really I live on Staten Island and some really good restaurants on Staten Island just to Tian Italian American. It's a place on New Door Plane and pizza jove that the pizza is great. The Italian food is great. Two guys from Italy in a small place, but they do a great job. What do you think it? Concepts like quality meets quality Italian any of that run. There's some some pretty good, some good. Yeah,

they do some pretty good. They do a good job. I don't like knocking anybody because I get We get knocked all the time, but I know what it takes to get it done, so I always go out for the experience and what about Chinatown. You have a go to Flushing and work your way. I'm born and raised in Brooklyn, and when I do go back to Brooklyn at the Seventh Avenue. Eighth Avenue in Brooklyn has a great Chinatown. So I used to go to Queens to see the Mets play, but since it's so bad, I

don't go out to Queens anymore. But Brooklyn has great Chinese food, and so to Staten Island. It's some really good Chinese restaurant. So I'll go to Brooklyn and when I want to get my Chinese Chinatown fixed um. And then the last restaurant question I wanted to ask is what do you do when a dish comes out and you just don't like it? Send it back? Well, if something is up in the past and it's not right, it doesn't look right at to send it right back

to the cook and send it the first thing. I'll send it back and then turn around and yell at the zus chef and make them to go back there and make it with them. So no hesitation. I know basically are are very uh fearful. Maybe that's right. I'm with you. If something is overcooked, back it goes which part of rare was confusing to you? On a steak, this is somebody else's shoe, not that I ever say that to the makes mistakes right, see this, I think I got the wrong wrong steak. I ordered it rare.

This is meaning, well, can can I get a rare steak? But there are a lot of people that really seem to be hesitant to send stuff back, you mean in the kitchen or as a diner, as a diner unless it's really really bad. It depends on like if we're with the crew of getting people will send stuff back if it's not right. With my family, it's pretty you know,

order stuff that I know is safe. Like when you go out to eat, people say, if you go, if you go somewhere, what do you want to My first instinct is always the word something safe, especially with a big group of people, because you don't know, and like what do you mean by safe? Like just a piece of grilled chicken or nothing to not on the fancy end of the menu, not on the fancy or end of the menu, so simple, and and the bread and butter, because you know it'll be done, will be a good meal,

it'll be a safe experience. But if I'm going out for a dining experience, it's totally different. I'm going out going out with friends and we're hanging out, we're partying. It's always a safe experience. Does does being in the business ruined that that people think? When you eat with a bunch of people, everybody's looking at you like what what does he say? What? It was like, No, it's I just try to eat. Yeah, I just eat, man, I I really really enjoy eating, so and trim. How

do you manage to keep the calories? Just? First, you gotta exercise. You gotta make smart decisions about what to eat, when to eat. When we would work on dishes or work on the menus or opening too Chicago very soon, so that's coming in September, and right now that we're working on dishes, so well, I would take four or five bites, six bytes, seven bites, eat half the dish, and I only now it's one or two bites, just to get tested at how it's doing to the next one.

It's really about how many calories you consume in a day. Let's um, that's really quite interesting. Let's let's jump to our favorite questions. I want to see, uh see how how you run down these relative to to what this is the speed round? Absolutely, So, what do you think is the most important important thing that people don't know about your background? Important thing that they don't know about

my background? It's the loaded question that you know. I um, I just a regular guy, born and raised in Brooklyn and just worked my way up and worked hard that I think that when people see success or you're working in a restaurant, always got this, always does that, and no one gets anywhere without working hard and paying your dues. And I definitely paid my dues over and over, overpaid my dues. I'm waiting for that check to come back to the refund um. Who was some of your early mentors.

You mentioned the one chef that took a liking to you when you were young. Yeah, I don't know if he's still alive. It was an old Sicilian guy. But I worked in a restaurant called The Scene many years ago. Chef there was chef named Joan ev Pik, an old French guy who was really back in the day that was one of the few four star restaurants in New York from the New York Times and when it really

really was something and he was a strict disciplinarian. He was the guy who really talked made me understand what running the kitchen was and how everyone should look and behave and perform. And it was all about dressing right, looking right, and where the white hat and the neckerchief and stand there and just that was what the day is. Where you got screamed at from the minute you opened the door then you went home. Man, you were just like hammered every minute of every day. And um, what

chefs influenced your approach to cooking? Who did you who did you think about? Who affected In the early eighties I worked with when there was a restaurant hotel on the west on the east side, the Westbury Hotel. It was a restaurant called a Polo and Roger Verge was the consulting chef and Daniel Bleu and crew came from Leon and those guys with those that team was one of the really first people who exposed me to a different world of how French food was and the seasonality

of it. And back in French restaurants were always like this is it, this is these are the dishes duck all orange in the middle of the summer, in the middle of the winter. They were more seasonal food and really taking a farm approach way way back when. I don't want to transmitted in the eighties though I was only like two years old. Though when so you mentioned you don't have time to read books, You're so busy at the restaurants. So what do you do for fun?

What do you do to to keep enter? Now it's the summer, so I like to hang out in the backyard and have a nice glass of wine and go into pool. And but I like enjoy playing with my kids and do a lot of charity work and helping others really gives me a good sense. And we taw Group and tow Cares that were involved in a lot of different charities. How Cares that's the charity and what sort of what sort of groups do you guys like to work with? We think in uh, the breast cancer

research and breast cancer walks, we do a lot of that. Um. I'm actually my charity and the part of TOW Cares. I'm on the chairman of the board of Eating two, which is a school and a facility for people on the autism spectrum. So I do that work and we have another charity called pop Earth is works with people on the autism spectrum, so I do a lot of that work. And Um, since you joined the restaurant industry, what has changed and is this for the better or

for the worst. Every single thing has changed, like now getting rid of plastic straws. I think a lot of it is for the better, sure, especially the way employees were treated. I think back in the day, you could, you know, yell at, smacked, hit, and all of it was wrong. It's almost like, you know, the trail of an abusive parent. You abuse the kid, the kid grows up to be an abusive parent, and that was really what was learned, yelling and screaming. Yeah, I think it

definitely had to be broken. It better today the restaurant industry has had a little bit of its own meat too. Movie. Yeah, I think it's way way better today. People will respect each other respect. I hate to use that term diversity, but women in the workplace and just different people in the workplace, and the way you treat people and treat people with respect and treat yourself with respect so you

can treat other people with respect makes a lot of sense. Um, what is it that has you most excited about the industry today. It's dynamic, it's ever changing. Maybe I said it a couple of times, but the way to make money and the way to get your point across and get your dish across is changed so much. And it's just you could come up with something that's the greatgest

boobon and make a fortune. And people who have the food truck revolution I think changed the way a lot of people think about restaurants that you can go to a truck and have a great meal. You can go down the road and it's everywhere. Right. You go to Madison Square Garden and the food stands are great. You go to a huge improvement from what it was, Yankee Stadium or City Field. I don't know if anybody goes

to City Feilding. I love them, but it may be the best food of all the major You can go and um where we went to Fenway Park a couple of years ago and the steakhouse and there was great. It was a great experience. And those are the different things where you can get great meals anywhere now, not not just a high end, not just a high end restaurant. Tell us about a time you failed and what you learned from the experience felt I failed, like you know,

as a restaurants we learned. You know, we had a restaurant up on the Upper east Side Arlington Club that the food was great, but it was just bad location. That was We learned a lot to really be more careful about the locations that we picked and just sometimes you have to know when to get out right. I think that we let that. That's one of the most important things. If you listen to any business as risk right. So something's work, something's don't work. But if it's not working,

you've tried everything, let it go and move on. What why do you say it was a bad location. I just reminded. I'm reminded of the Seinfeld with the black Hole restaurant that always died and never never seen that. For some reason, it just happens that way. I don't know why that that part of it's in front of a bus stop. It was like all crazy little things that was successful, and we took it thinking that we could make it work. And listen, we had a great

partners and great food and just didn't go. Didn't go. So someone's a millennial and wants to become a chef or or enter the restaurant business. What sort of advice would you give? It takes time. They all think it's I mean, everybody wants instant gratification. And I went to school, I worked for this chef to a year. I worked for that chef for a year. I'm ready to be a chef, just not the case. It's a long process.

And our final question, what is it that you know about the restaurant business today that you wish you knew years ago. It's very difficult to make money. It's very difficult. Yeah, I think that um everyone the perception of people. I didn't actually do it for the money. I did it because I just loved it and wanted to do it. I didn't take the approach of hey, I'm gonna do this and I'm gonna make a million dollars and make five million dollars, gonna make ten. I just did it

because it's what I wanted to do. And I took that approach of going in and just working and working working, figure that if I could just work hard, the opportunities will come. And I don't know, I would have studied harder in school though, that's what I would have paid it to more attention in college. Very very good. UH, this has been fascinating stuff. We have been speaking with

Ralph Scamadela. He is chef and partner at the Toe Group, which runs UH, the most highest grossing restaurant in America, as well as three of the ten top grossing independent restaurants and a slew of other highly regarded and well reviewed restaurants. If you enjoy this conversation, be sure and look up an intro Down an Inch on Apple iTunes, Stitcher, overcast, Bloomberg dot com wherever final podcasts are sold, and you could see the rest of our two hundred previous such conversations.

We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. I would be remiss if I did not thank the staff that helps put together these conversations each week. Attica val Bron is our project manager, Medina Parwana is our producer, Slash audio engineer. Taylor Riggs is our booker. Michael Batnick is our head of research. I'm Barry Ritults. You've been listening to Masters in Business from Bloomberg Radio