August 2020 Impact Assessment
The James Beard Foundation is a nonprofit organization whose mission is to celebrate, nurture, and honor chefs and other leaders making America’s food culture more delicious, diverse, and sustainable for everyone.
Immediate Impact of COVID-19 on Restaurants:
(Results from the JBF Survey of 1,500 chefs, restaurateurs, beverage professionals, and workers fielded on March 15)
- 56% of respondents have one restaurant and 66% employ up to 50 people.
- More than 60% of all respondents did not have enough operating capital to sustain a closure for one full month; and 80% are uncertain whether retooling to offer delivery and take-out would be able to sustain them.
- Of those restaurants in a municipality that had been forced to close, almost 75% believe they would be unable to re-open after two months.
- At the time of this survey, respondents said they had already had to let go 78% of their hourly workers and 58% of their salaried employees.
- On an individual basis, 44% of the respondents estimated their restaurants could make it through the first month of closure with an infusion of just $25,000.
- To sustain themselves for three months, 77% or respondents thought it could take up to $250,000.
- Extrapolating that number to the estimated 480,000 independent restaurants in America (per this CHD Expert report), the industry would require an infusion of as much as $92 billion.
Obstacles to Sector Response:
- Fragility of the Local Food System
- COVID-19 revealed the fragility of the independent business model of incredibly thin margins, especially for smaller restaurants. It also revealed how tied into the local economy small independent businesses are. There is a dichotomy between chain restaurants that are tied to the farm industrial complex and independent restaurants that can’t buy food if they are not selling food which in turn hurts the local independent farms (From JBF listening session).
- Inability to Guarantee Safety for Staff and Patrons
- According to a JBF survey fielded in May, 9 out of 10 owners who were considering re-opening listed health and safety of staff and customers as their primary concern. Specific health and safety concerns also included uncertainty around consistent access to special equipment including masks, thermometers, and hand sanitizer (6 out of 10 owners).
- The health implications of the choices restaurants make are a tremendous stress on owners and operators. Chefs and restaurateurs expressed general worry about ensuring the health and safety of employees and patrons. They feel the “heaviness” of the pandemic.
- Consumer behavior is of great concern as restaurants continue outdoor dining and prepare for potential indoor dining. Reinforcing a mask protocol and general safety precautions has become a challenge for many.
- Seasonal shift is a concern as restaurants grapple with what to do when outdoor dining is no longer viable. In places like the Northeast and Mid-Atlantic regions, there is very little desire to eat indoors from consumers.
- From the same JBF survey in May, owners are facing difficulties considering how they market the re-opening of restaurants and bars to customers (8 out of 10 owners). They are also looking at how those communications convey health and safety considerations (6 out of 10 owners).
- Changes in Supply Chain
- Businesses that supply food for local restaurants (such as farmers and butchers) faced large-scale cancellations due to shuttered restaurants, leading to product backlogs.
- The increased demand for take-out supplies, such as utensils and to-go containers, coupled with personnel furloughs on the distribution side, caused major delays.
- Producers are being forced to find new ways to reach markets and consumers because the closure of many restaurants has caused a break in the chain. They also are faced with the issue of packaging for individual consumption when many do not have the processing capacity to do so.
- Lack of Public Health Guidance and Federal and State Support
- Beyond financial relief, those who are considering re-opening need additional information and guidance on the best ways to support the health and safety of their customers and staff, including information on legal liability if someone contracts COVID-19 in their restaurant.
Industry Adaptations to COVID-19:
- Supply chain issues exacerbated by COVID-19 pushed businesses to review their product sourcing, Many streamlined their menus and reevaluated food costs.
- The quick pivoting to online ordering and deliveries forced businesses to look closely at their spending, take more time to cross-train staff, and make sure the resources that they have are being used in the best ways.
- A lot of restaurants have pivoted their mission to serving people who want to eat to those who need to eat. There are organizations that funnel philanthropic money to contract with restaurants and producers to get individually packaged meals to those who need it.
What Is Needed for Industry Survival
- Strengthening of Supply Chains
- There is a pressing need for the government to provide support that allows the industry to pivot from industrialized food to sustainable local food sources, addressing the fragility that COVID-19 exposed.
- Indian country and other disenfranchised areas need to be incorporated into the conversation about supply chain and given a platform to share their culinary history and roots.
- Long-Term Systemic Changes instead of Pivots for Survival
- There is a disconnect between long-term sustainable systemic changes that address the fragility in the local food system that has been exposed by COVID and immediate pivots employed to survive this moment
- There are concerns around cash infusions. Both loans and grants have potential issues: loans put the business in an even more precarious debt situation, and grants carry strict stipulations about how the money can be used. Money needs to be invested in people to problem-solve but instead is earmarked for infrastructure.
- The money and the effort needs to be focused on how the industrialized system has failed and how to fix it for the long term, rather than short-term band-aids.
JBF COVID-19 Response:
- In recognition of the long-term support needed by independent, locally owned restaurants to remain a vital part of their communities, the James Beard Foundation has committed its full staff and programs for the next 12-18 months to Open For Good, a campaign to support the recovery and rebuilding of an independent restaurant industry that is stronger than ever.
- The goals of the campaign are:
- Provide support for the industry to survive and rebuild stronger and more equitably. Initiatives include the Open For Good Fund and the James Beard Foundation Food and Beverage Investment Fund for Black and Indigenous Americans, regional advocacy efforts, weekly webinars and talks, and the Open for Good industry resource hub featuring the KitchenAid mentorship program.
- Engage the public in supporting independent restaurants, educate them about the importance of independent restaurants in American culture, local and national economies, and communities, and raise awareness about the “true cost of food.”
Contact Information for JBF:
Megan Storms mstorms@jamesbeard.org
