Mariah Pisha-Duffly was exhausted with the state of the restaurant industry. It was November in Portland, Oregon, and she was dreading another two-week-long closure of her Southeast Asian restaurant Gado Gado. For her and for every other restaurateur navigating the COVID-19 pandemic, it had been months of jumping through hoops and reinventing her business. This time patios were included in the shutdown, meaning establishments around the city were staring at freshly weatherized outdoor seating areas they couldn’t use, spaces that had been lifelines to their businesses while indoor dining rooms remained closed. “It’s been really challenging throughout the pandemic to constantly think of new outlets and new ways to pivot,” she says. But then, her partner had an idea: Why not offer meal subscriptions?
Gado Gado’s Sunday Supper Series is based on a series of “one-off takeout meals” the restaurant had experimented with over the previous months. “We had a lot of success with meals that weren’t really beholden to a menu,” she says, noting that both the chefs and the customers seemed to enjoy trying something new. With the subscription plan, managed in-house, Gado Gado’s most devoted customers could get that experience on a weekly basis and reserve the number and serving size of meals that suited their households. During the first round of subscriptions, in December, the restaurant fed 18 families — roughly 30 people. The system is a win for diners and for the restaurant: Subscribers stop by every Sunday for a month and collect a mystery meal, adding a little adventure to dinner at home; meanwhile, the restaurant gains some much-need predictability, an outlet for creativity, and an opportunity to maintain a relationship with its regulars.
“It’s really great for us, because one of the side effects of running a restaurant during a pandemic is that there is so little consistency,” says Pisha-Duffly. Before the pandemic, restaurants like Gado Gado were able to anticipate how much food to order and how to schedule staff by understanding and tracking the seasonal fluctuations in business. Warmer weather, catering, and revenue from private parties could, in theory, help cover leaner seasons; however, something out of the ordinary, like a long-term street construction project or, say, a virus, throws this delicate system out of balance. “In a normal restaurant world, you predict what your staffing is, and what all your expenses are based on, and what you think your sales are going to be,” she says, “but when your sales are so up and down, it’s impossible to predict those things.”
In many ways, restaurant subscriptions mirror community-supported agriculture (CSA) shares. The CSA model is designed to provide small farms and gardens with a consistent source of income. Growers sell farm shares at the beginning of the season to people who become regular patrons and recipients for the perishable food. Restaurants face similar challenges as farms, in that they operate within thin margins and work with food products that, if not used within a certain period of time, spoil and lose their value. Plenty of restaurants had already discovered the benefit of ongoing commitments from diners prior to COVID-19. Olive Garden has its successful Never Ending Pasta Pass promotion, and Panera sells an endless coffee subscription. At the higher end, Next in Chicago has sold “season tickets” since 2011.
As the pandemic drags on into the new year and a long, dark winter season, subscriptions are emerging as yet another revenue stream for restaurants trying to think beyond the confines of their dining rooms. A multitude of companies now offer everything from soft serve ice cream clubs to “wine shares,” bridging a period of plummeting cash flow. Customers appear equally intrigued by the prospect of subscriptions as a way to support their favorite restaurants and reduce some of the headache of deciding what to cook or order on any given night. A survey by PropertyNest found that roughly 55 percent of New Yorkers said they would be interested in signing up for a restaurant subscription.
While some operators, like Pisha-Duffly, are piloting their own subscription models, others have turned to new online subscription platforms that have gained traction during the pandemic to reduce some of the work involved with organizing a program. Samuel Bernstein is the CEO of Table 22, an emerging restaurant subscription platform that’s attempting to break into the competitive online ordering market dominated by major delivery apps and reservation services like Uber Eats and Tock. The company debuted with a single Austin restaurant at the end of May 2020 and now serves over 25 cities and dozens of restaurants around the country. Some of those restaurants have generated “millions of dollars of subscription revenue in a really short period of time,” according to Bernstein.
He and his partners envisioned a system where restaurants could have recurring revenue with predictable demand and the ability to staff accurately and order supplies with zero waste. “What we heard when we talked to restaurateurs and chefs around the country was that many of the problems that COVID laid bare — the weakening margin profiles of restaurants, the lack of diversified revenue streams, their really unhealthy relationship with third-party aggregators and delivery services like Doordash and Uber Eats — were accelerated by [the pandemic],” Bernstein says. He sees subscriptions as a way for “consumers [to] enter into this social contract with their favorite places.”
The Third Place, a new San Francisco-based tech company with a similar approach to Table 22, got its start in August. The Third Place allows businesses to customize their offerings and customers to subscribe to different plans, say once every three months or once a week. It’s since signed on businesses like Salt Collective — a branch of the restaurant group behind Atelier Crenn — and Noodle Girl, a Vietnamese restaurant run by a La Cocina alum. While both platforms are clearly geared toward the food world, the Third Place is open to other small retailers looking to diversify their revenue. According to the San Francisco Chronicle, the Third Place plans to eventually charge partnering businesses a 7 percent fee on orders, while Table 22 partners tell Eater its fee is around 10 percent — both far less than the 20 to 30 percent fees charged by most delivery apps.
Keeping off of those high-cost delivery apps is a priority for Detroit restaurateur Omar Anani, whose popular Morroccan-American Saffron De Twah has struggled to stay open during the ups and downs of the pandemic. Anani saw subscriptions as an opportunity “to create a monthly stream of revenue, where even if the restaurant doesn’t reopen right away — because we’re trying to be safe and do things the right way — people [can] still have some Saffron experience, even if it is on a smaller scale.” Although he considered managing subscriptions in-house, the project felt daunting and he decided to try Table 22. Saffron De Twah offers three subscription options: a cooking class, a dessert package, or a once-a-month tasting menu to go. The first round of meals was released in mid-January, with most customers choosing the tasting menu option.
Fellow Detroit restaurateur Brad Greenhill is already seeing the benefits of adding a subscription option after only a month. At his restaurant Takoi, Greenhill executed roughly 100 subscription orders when he debuted the option on Table 22 at the beginning of December. By mid-December, the restaurant had enrolled around 30 additional subscribers. Greenhill’s subscription options include a wine package, a cocktail club, and a “cookbook experience” featuring a monthly meal kit with semi-prepped ingredients and a digital copy of his cookbook. “It’s a nice revenue stream,” Greenhill says.
With vaccine distribution underway, safe indoor dining is on the horizon — even if it’s still months down the road — and restaurateurs are wondering whether they will continue to offer takeaway meal subscriptions once the pandemic subsides. “There comes a point where once we’re fully open again, we have a full dining room, and you have a full bar, and you have all of your catering business back up and running because you have the events going on. Then, can you juggle all these [customers] plus your memberships? That will be the tough question,” Anani says. Likewise, Greenhill points out that “packaging 100 meal kits takes up pretty much the whole dining room.” It’s not clear how he would continue to offer subscriptions once diners are back at those tables.
Bernstein, for his part, is optimistic about the possibilities for adapting Table 22 to a post-pandemic world. “No doubt, there will probably be some evolution of the offerings,” he says. “Whether it’s a chef dinner every month or collaboration or special experience, I actually think [memberships] open up dramatically the sort of universe of opportunities to do amazing stuff for subscribers.”
Pisha-Duffly also remains bullish about the future of Gado Gado’s subscription supper club. “Before we were a restaurant we were a pop-up, and I think that agility has really served us well throughout this whole experience,” she says. The Sunday Supper Series is an extension of that pop-up spirit. As such, she says continuing the subscription service post-COVID is “definitely not something [she] would rule out.” She’s not ready to make any firm commitments, though. “We just have no idea what the future looks like,” she says. “We’re not even guessing anymore.”
While Gado Gado returned to offering some outdoor seating as of Thursday, December 3, the subscription program is still online because it offers restaurants like hers security. “For us, it’s really helped stabilize things,” she says. “And we are lucky to just know that some of our expenses are going to be covered for the entire month by these dinners.”