Evan Dannells’ French American restaurant Cadre had been open for five months when the pandemic flipped his business model like a crepe.
Dannells, an industry veteran with a background in fine dining, was undeterred. He rallied his staff and got creative. Cadre issued elegant gift certificates inspired by war bonds, set to mature in six months when, Dannells assumed, “this will be long over and we’ll be back to full business.”
The kitchen launched a series of takeout specials, Mexican-style taco nights and “destination” dinners. Dannells connected with friends at Vitruvian and turned hundreds of pounds of the farm’s oyster and shiitake mushrooms into soup and pesto, which they packaged and sold directly to consumers.
Cadre got funds from the Paycheck Protection Program — an ineffective tool for restaurants that couldn’t fully open — and looked for ways to cut expenses.
It hasn’t been enough.
“All these things that I’ve done are maximum effort,” Dannells said. “But none of them gets me back to even halfway of where we were, when we were dining in restaurants. … I have never worked more in my entire professional life than I have in the last seven months, and I’ve done it with no paycheck.
“Restaurants are trying to come up with permanent solutions to a temporary problem.”
When the U.S. Senate recessed on Oct. 26 without passing the current coronavirus relief package the House of Representatives approved on Oct. 2, struggling independent restaurants saw hope of government assistance fade, possibly until 2021. The arrival of cold weather in the north makes patios less viable and in Wisconsin, spiking COVID-19 cases statewide means opening indoor dining beyond the current 25% capacity limit looks unlikely in the near term.
All of this points to mass closures for independent restaurants that have fought to hang on this long.
“I don’t think diners understand the economics of a restaurant,” said Susan Quam, executive vice president of the Wisconsin Restaurant Association. “Restaurants are not built to operate at a low percentage of customers, regardless of what’s causing that percentage to be low. They cannot operate if they’re not at full bore production in key parts of the week” — the game days, holidays and celebrations the pandemic put on pause.
Some taverns have decided to close until warm weather and/or a vaccine makes opening sustainable. Others are trying other tactics. Anything to keep going.
To extend outdoor dining, igloos are pretty and cost about $1,500 a pop. Propane heaters work if it’s not too windy, though flame can’t be used under a tent or in an enclosure. (That’s a fire and/or carbon monoxide risk.)
Restaurants have partnered with third party delivery companies like Grubhub and DoorDash that take another chunk of profits. There has been a proliferation of virtual brands, delivery-only concepts launched by restaurants selling chicken wings, tacos and more under names like Midcoast Wings (produced by the Great Dane Pub & Brewing Company), The Art of the Nacho (Lucille) and ACME soup and sandwich (Nattspil).
Nationally, the food service industry lost more than $200 billion between March and September and is on track to lose $240 billion by the end of the year. Data from the National Restaurant Association said one in six restaurants — about 100,000 — has closed permanently, and 40% of operators think it is unlikely their restaurant will still be in business in February if there are no additional relief packages from the federal government.
Madison, with its high saturation of restaurants pre-pandemic, could fare even worse. In October, nearly 60% of the 50 Dane County respondents to a WRA survey said it’s “unlikely they will remain in business” six months from now if nothing changes.
“No one is thriving. Everyone’s dying a death of a million cuts and just trying to slow it down,” Dannells said. “What I’ve assumed at this point is nothing’s going to happen until there’s blood in the water.”
Many restaurant operators started out on the same page as Dannells: adapt and invest for now, and we’ll get through it.
Quickly after COVID-19 quarantine orders in March, restaurateur Tami Lax launched Harvest Go, a carry-out comfort food brand out of her fine dining restaurant. Next door, she made The Old Fashioned’s popular fish fry a daily offering.
“We sell out of specials every night and we’re making a large volume of them,” Lax said of Harvest Go, which has seen orders pick up recently with the colder weather. “Our prices are 50% less than they would be when you dine in the restaurant, and these are generous portions. It’s been good for us, and for my mental health. It’s been good to just keep me moving.”
Menus all over the city became more streamlined and simplified, focusing on family meals and comfort food. Even old school spots beefed up their social media. Delaney’s Steaks/Seafood/Wine, a west side institution that’s nearly 50 years old, now posts TikTok skits set to movie clips and original slow jams (check out “Just Mask It”).
Delaney’s reopened indoor dining in early June and can seat 70 people inside under the 25% capacity limit. Without a movie or a game to get to, diners linger. Friends conduct conversations from opposite sides of the bar. Some groups have continued to sit on the covered patio even in 40 degree weather.
The west side supper club also does more takeout than it used to.
“Some days we’ll do four or five takeouts, other days we’ll do 40,” said Dan Delaney, Delaney’s co-owner and general manager. “We’ve mastered it over a three-month period.”
In denser parts of town, the expansion of outdoor dining became a lifeline. The city of Madison launched its Streatery program just after Memorial Day. Side streets near the Capitol became “café zones,” as the city basically rubber-stamped the addition of indoor tables to parking lots, sidewalks and alleys.
“We were able to waive all fees and open up rules enough that you could use existing equipment that we would normally say no to,” said Meghan Blake-Horst, the city’s street vending coordinator. “I would never in the past have been able to say, ‘Take your tables from inside and bring them outside.’ A lot of people were like, ‘I can just take some rope and some wood and tie it together?’ And we’re like, ‘Yes.’”
At least 14 Madison restaurants have applied to add patio heaters to street dining on public property, with more on private property. City zoning administrator Matt Tucker said they’re fairly hands-off with private property; he just forwards people the fire department’s worksheet and wishes them luck.
Rachael Stanley was skeptical of her husband’s plan to build a patio behind Dotty Dumpling’s Dowry on North Frances Street.
“I said it’s never going to work, it’s an urban parking lot,” said Stanley, who co-owned the 46-year-old tavern with her dad for seven years before he passed away in 2019. “I said, ‘I don’t see your vision, but I appreciate you.’”
To Stanley’s surprise, Dotty’s little patio with six picnic tables turned out to be “really adorable,” she said. People loved it. Lately they’ve had three heat lamps running full-time.
As lovely as the patio is, Stanley remains skeptical that Wisconsin diners will be willing to sit outside and drink without a Packer game live in front of them. “We’re not Norway,” she said.
She’ll give it a whirl until the end of November, and then she’ll take her parking spot back. Stanley has been paying for additional parking, both for herself and Ian’s Pizza next door, whose parking the Dotty’s patio encroached on.
The city extended the Streatery program through April 2021 (anecdotally, few restaurants plan to keep patios going past the end of November). Feedback from restaurants and diners has been overwhelmingly positive, Blake-Horst said.
“It was successful, more than we could have hoped,” Blake-Horst said. With less traffic, parking spots turned over to both seating and designated curbside pickup areas haven’t been contentious, though the city plans to go over those rules before making anything permanent.
“How can you have a strategy when your playing field changes every day?” she said. “It makes it hard to plan, as opposed to react. But I think it was a very successful program.”
“There’s nothing to celebrate”
The things that help — delivery, patios, social media savvy — only help so much. Taiwan Little Eats is on four or five third party platforms, owner Christine Welch said, “just to stay alive,” even though those companies take about 30% of the bill.
“Some of them have extra delivery fees, and none of that goes to the restaurant,” she said. “We get a lot of reviews, ‘This stuff is too expensive for what you’re getting!’ It’s not the restaurant’s fault.”
Little Eats tries to push their own delivery, which has better margins. Some 75% of their sales are through delivery.
Harvest Go sales are picking up now that people want more warm comfort food. But at The Old Fashioned, Lax cut all but 10% of her 108 staff. Even at that level, the restaurant is simply too big to be sustained by takeout and 25% capacity crowds. Sales are less than 20% of what they were pre-pandemic.
“We’re going to need a combination of things to survive,” Lax said. “My friends are all in the same boat. There’s nobody who is flourishing. Everybody is pivoting, slipping and sliding, in survival mode.”
Lax’s landlord deferred some of her rent, but that’s piling up. She’s taken out loans, invested more of her own funds and raised $35,595 for The Old Fashioned with a GoFundMe campaign that’s still running.
Other local spots that have started similar crowdfunding campaigns include Osteria Papavero, Plaza Tavern, Meze Grill in Sun Prairie, Otto’s Restaurant & Bar, La Brioche True Food, Mickey’s Tavern, Short Stack Eatery, SCONNIEBAR, Jordan’s Big 10 Pub and Baldwin Street Grille.
In a month, Lax is going to sit down and take a hard look at The Old Fashioned’s books. If it’s not at least breaking even, the restaurant will close for a while.
“We’ve maxed out every source we can,” she said. “If we slide backwards again we’ll close until things turn around for us.”
Harvest turned 20 in September. Lax had mixed feelings.
“I didn’t feel happy or excited,” she said. “People would congratulate me, and I was like, ‘There’s nothing to celebrate right now.’
“When this started, we thought it was temporary,” she said. “You put up the money now and in eight weeks, 12, we’ll get back and recoup and recover. Now it’s just gone on for too long.”
Under the dome
Into this chilling economic scenario, heavy plastic igloos are popping up around the city like so many hopeful bubbles.
“We got them back in July,” said Sabri Darsouni, managing partner at ZuZu Café near the Henry Vilas Zoo. “We thought, ‘This pandemic isn’t going to go away any time soon.’ … We had to figure out a way to get people to sit on the patio and keep them out of the cold.”
ZuZu’s little domes cost a third of the typical $1,500. They’re wind breaks, closer to pop-up tents than the more elaborate, heated domes Robinia Courtyard debuted locally last year.
Robinia made its domes an event, renting each one to parties of eight last December for $200 including a round of drinks and signature mugs, with a portion of proceeds going to charity. Reservations for the Robinia domes this year are set to go online early this month.
“Bring your bubble to our bubble!” crows the Cross Plains wine bar Nineteen09 on its “globes” FAQ page. A standard evening reservation there is $75 for two hours (food and drink a la carte). On Saturday and Sunday mornings, there’s a mimosa package: $150 for two hours, up to eight guests and a mimosa/ bagel kit.
The globes at Nineteen09 are heated, they explain, but “you will be sitting on a concrete patio, in winter, in Wisconsin, separated from the elements by a thin, plastic membrane. Please come dressed for a winter activity.”
At the Madison Club, “The response has been, ‘Wow, this is so cool!’” said Mary Gaffney-Ward, general manager. The Club has two “snowglobes,” each with carpeting, side tables, lighting and greenery, the structure held down by sand bags.
From inside, members can look out over Lake Monona while sipping a Manhattan and chatting with up to five other people. Rental fees are $150 for two hours, with $150 minimum in food and/or drink on weeknights and $300 minimum on weekends.
Northern cities facing a pandemic winter are snapping up these durable PVC enclosures. Karben4 Brewing is waiting on an order of seven, which could pop up as early as mid-November. Tap room manager Katie Herrera said they’ve been laying crushed gravel and cement, building platforms for each 11-foot-diameter igloo.
“We would be able to accommodate parties of 10 or 12 easily, but we’re following regulations, keeping group size minimal,” Herrera said.
Like the others, Karben4’s igloos will be reservation-only. The brewery is adding an order system via an app, with beer delivered on a table outside the igloo door.
“You can’t control Midwestern winters,” Herrera said. “You have to work with it. I’ve seen Packer fans do some pretty crazy things … we are tough.”
While restaurants plead with diners to try takeout, they also know their limits. Matt Stebbins and his team at Nattspil couldn’t deliver the experience of their dark, intimate, cash-only bar with its DJs and dim sum to someone’s house.
“Right, here’s a record and a disco ball,” Stebbins joked. “You can’t recreate that outside the space. The ambiance and soul of that place is about sitting inside in a little clubhouse, tucked away.”
Nattspil’s owners have long resisted pinning the place down to any one cuisine or even settling on a spelling of its name. As the pandemic continued, they dropped a patio into the alley and added a phone, after operating without one. After 16 years, Nattspil finally takes credit cards.
“We’ve had to make some changes to our model and our identity in order to survive,” said Stebbins, who’s been in the industry for more than 25 years. His grandparents owned the long-shuttered Caravello’s Bar & Restaurant, and his uncle ran Namio’s Dinner Club on Park Street.
“There’s a lot of hardworking people out there, trying to find creative ways to survive,” Stebbins said. “It’s scary, but at the same time it’s impressive when I look around and see our friends and neighbors finding different, creative ways to do this. There’s a light there for me.”
Virtual brands — sub-companies based out of underutilized restaurant kitchens — are one way Stebbins and his colleagues hope to expand available revenue streams for the winter.
Two weeks ago, Nattspil chef David Oliver kicked off ACME soup and sandwich, a virtual, delivery-only brand making hoagies, salads and chili. ACME is quite different from Nattspil’s typical eclectic fare. One recent sandwich, the Mustache Pete, features capicola, salami, prosciutto, sweet onion, provolone, mozzarella, giardiniera, lettuce, tomato and balsamic vinaigrette on a grinder bun for $13.50.
Stebbins has another virtual brand in the works called Dive Burger, hosted by Brothers Three Bar and Grill and set to launch later this week. It joins brands like Midcoast Wings, started in August by Eatstreet and the Great Dane.
Rule No. One Hospitality, the restaurant group that includes Merchant and Lucille, has pushed “cheap date night” takeout promotions, invested in its patio and expanded into food insecurity work with Cook It Forward. It also has four virtual brands: Duck Lips Fried Chicken, Slice Queen, Mad Taco and The Art of the Nacho.
Virtual brands let Lucille, already a pizzeria, do something different with ingredients the kitchen already has on hand. In the case of Slice Queen, that’s 14” pies with a thin crust, cut into squares. Art of the Nacho features variations on Lucille’s nachos, including one built on tater tots (“tachos”) and another topped with melted habanero/tequila cheese.
Third party costs (up to 30%) to run delivery and takeout drive up prices. Steel pan nachos in house at Lucille start at $10; on the app, they run $13.99-$17.99 before taxes.
“I don’t think it’s the future of delivery,” said Patrick Sweeney, CEO of Rule No. One. “It’s a lifeline. The fees are exorbitant. I don’t see this as a way forward if the pricing structure stays the same. … They have all the logistics worked out, and we don’t have the time, flexibility or money to enact that in a meaningful way.”
Still, Sweeney does think virtual brands are around to stay.
“We’re looking at it as a way to keep people employed,” he said, “and serve enough people at home who want quality food and don’t want to leave the house to get it.”
“We’re hosting an ice bar at Merchant,” Sweeney said. “We’re going to try to enclose the area as much as we can. I don’t think it’s going to help the bottom line that much but it’s sending a positive message to people that we are still open.”
The air in there
Dane County’s cap on indoor dining has been longer and stricter than most counties. That changed in October. Following a challenge by the Tavern League of Wisconsin, a judge upheld an emergency order by Gov. Tony Evers that made the 25% indoor capacity rule apply to restaurants and bars statewide.
In Milwaukee, approximately 1,800 businesses with in-person dining were required to submit COVID-19 safety plans, which the city Health Department used to determine capacity limits. Some argue that this is a more nuanced way to approach indoor gatherings. Madison-area restaurants and event spaces have advocated for a similar, collaborative approach.
Meanwhile, some are trying to make indoor dining safer. The Blind Horse Winery & Restaurant in Kohler announced that it would become the first restaurant in the country to install a specific ultraviolet light technology, UV-C virus mitigation “sanitizing light” that claims to kill pathogens.
Tom Anderson, owner of Buck & Honey’s in Monona and Sun Prairie, reopened both dining rooms in late May after installing OMNIShield, an antimicrobial coating that purports to prevent virus growth on surfaces for 90 days.
As understanding of how the virus spreads through the air has evolved, so has Anderson’s approach. Last weekend, Buck & Honey’s installed a unit from Global Plasma Solutions that goes into the restaurant’s ventilation system.
“It’s a coil cleaning, ionization process that makes its way into occupied spaces and kills bacteria and viruses,” Anderson said. “The testing done on it for COVID and airborne viruses shows a 96% kill rate. … We’re trying to take some pretty strong steps. We don’t want our staff, our guests to get sick.”
Steps that made diners feel better early in the pandemic, like extreme and frequent sanitization of surfaces, now fall under the umbrella of what The Atlantic has called “hygiene theater.” In other words, they may make people feel safer without actually being substantially safer from catching an airborne virus in an enclosed space. The CDC still recommends hand washing, but masks do more than disinfectant spray.
“We know more now about how the virus moves around, how important certain mitigation practices are versus others,” said Quam at the Wisconsin Restaurant Association. “Those are all things we’ve gotten better at, and understanding human behavior too. It gives us a different perspective.
“We’re now ready to fine tune,” Quam added. “We’re ready to take what we’ve learned from science and implement that in a way that better meets everyone’s goals of public health protection and folks being able to get a meal, indoors or carry out, wherever they want to eat it. It’s the customer’s decision what they want to do.”
Restaurants are training staff and modifying service for safety. But infrastructure additions come at a high price tag at a time when few can afford it. In some of Dane County’s older buildings, HVAC system upgrades can cost a prohibitive $10,000 to $20,000, Quam said.
“Some of this technology, like UV cleaning technology, is very expensive,” Quam said. “We’re hopefully going to see more and more use of them so prices come down.”
As the dining rooms reopened, Buck & Honey’s posted a lengthy safety and sanitation guide prominently on its website. When a staffer tested positive in September, the restaurant shared that publicly (without the person’s name) and closed the Monona location so staff had time to get tested. Public Health Madison & Dane County does not require this.
Each new report about virus transmission indoors sounds more like a nightmare for restaurant owners everywhere. Anderson called adapting for safety “a moving target.”
“To say it’s hard is the biggest understatement,” Anderson said. “Friends and neighbors that have small restaurants that don’t have the space, my heart just goes out to them. … We’re taking event spaces and turning them into overflow dining. At this point, people are scared to go out for obvious reasons, because of the uptick in cases and the messaging right now.
“It’s going to be a really tough winter for our industry,” he added. “It already is tough. The fear in our voices is real. We care so much about what we do … to think that could be taken away is hard.”
Addressing diners, Anderson repeated a thought that came up again and again among restaurateurs.
“Getting takeout and delivery is huge,” he said. “That’s the message across the board: Find your three or four restaurants you love and support the heck out of them.”
In the fall 2020 issue of Wisconsin Restaurateur magazine, food and travel writer Mary Bergin compiled industry predictions for the coming months.
Sit-down casual dining will struggle, she wrote. Fast casual outlets will thrive. Cold weather plus social distancing requirements will cause another dip in sales. Demand for carryout “will depend on how much consumer behavior has changed.”
In Minneapolis and St. Paul, many restaurants have added a service fee of 15-20% to every bill to offset COVID-19 costs and make pay more equitable between the front and back of house. Also helpful outside Wisconsin: Legalizing cocktails for carryout.
“You’ve broken a restaurant business model the second you remove alcohol,” said Cadre’s Dannells. “Cocktails would be a significant revenue boost for us.”
According to the Distilled Spirits Council of the United States, more than 30 states plus the District of Columbia now allow restaurants and/or bars to sell “cocktails to-go, bottled spirits to-go or both.” Relaxing these laws during COVID has been a boon for bottom lines, as cocktails prepared for carryout have higher margins compared to cocktail kits.
Illinois made it legal, and then the Chicago City Council passed a temporary cocktails to-go measure in June. On Oct. 13, Ohio became the second state to make its measure permanent.
Perhaps Chicago is also a bellwether for where Madison indoor dining could go next. On Oct. 30, Illinois Gov. J.B. Pritzker halted all indoor dining and bar service in the city. As of last weekend, the case rate in Cook County (41.5 per 100,000 people) was lower than in Dane County (52.5 per 100,000).
Jason Schleip is the lead consultant for the Wisconsin Restaurant Initiative. All the restaurants he’s working with are scared of winter, he said. They don’t know what to expect.
“Nothing prepared us for the duration of this pandemic,” Schleip said. “They were like, ‘OK, we’re going to shut down for a few weeks, maybe a month. We can get through a month. We can work with our suppliers and banks.’
“Now we’re going into the eighth month. There’s no plan to handle that. I would love to be more positive about winter, but it’s going to rely on how liquid the owner is, how much money they want to throw at it.”
The last, best hope for independent restaurants may be a federal bailout. HEROES 2.0, a second round of coronavirus stimulus and relief, passed the House on Oct. 2 and includes $120 billion of “Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive” — the RESTAURANTS Act.
These are funds for restaurants, bars and food carts. Unlike PPP, this would not apply to restaurants or franchises with 20 or more locations.
“We are all so far in debt we need some kind of relief, and it has to come from not even a state level, a federal level,” said Lax. “This is going on all over the country. It’s not a local issue.”
Dane County has already seen pandemic-related closures of spots like Manna Cafe, Vin Santo, Graft and Sunroom Cafe. Yet the news is not all grim. Stebbins and Sweeney announced plans to take over the recently shuttered Charlie’s on Main space in Oregon. They hope to launch Good Co. early in 2021.
“It’s scary, don’t get me wrong,” Stebbins said. “My mindset is, OK, this is a challenge. I’m not going to spend energy wallowing in despair.”
Even Dannells found some silver linings. He enjoys making “crazy takeouts” and helping his friends on the farm. Local food sources are doing surprisingly well, he said.
“Consumers want to buy and cook in their own household,” he said. “People who are cooking all the time get choosier about what they want to put in their face when they can’t eat in restaurants. They’ve started to get a more discerning eye. In a sense it’s been a great period for local farms — for local produce, locally raised meat, the demand is higher than it’s been in the 20 years I’ve been here.”
As for Cadre, Dannells keeps doing the work. He has faith that there’s a future in it.
“We’re grinding through this for the pleasure of being able to do what we do for a living when this is over,” he said. “As proud as we are that we’ve been nimble and able to explore areas of creativity, that we’ve diversified, I want to make sure the tone is not that we’re OK. None of us is OK. We’re on the cusp of mass closings.
“And nobody’s going to do anything until lots of restaurants start closing.”