011. on restaurants, social capital, and crypto

Part I: how restaurants became entertainment platforms & got rugged in the process

Last table left in Carbone, callin' plays on the rotary phone,
I take a glass of Domina to go with me home
—Drake, “Do Not Disturb”

---

In 1782, La Grande Taverne de Londres, a restaurant in the Rue de Richelieu, opened up its doors to the public in Paris. The man behind the restaurant, Antoine Beauvilliers, a 28 year old restaurateur, would go on to become one of the world’s first, leading culinary writers. But more importantly, his restaurant would mark an important shift in humanity’s relationship with food. 

For tens of thousands of years until the opening of La Grande Taverne de Londres, and the Industrial Revolution which kicked off a few decades later, human civilization’s sole priority was food. Every country and culture poured every ounce of their time, energy, and resources into the sourcing or production of food. The rhythm of human life revolved around hunting, gathering, farming, ranching, storing, preparing, and distributing food, and for millennia humanity’s progress closely mirrored advancements in food production. 

Thousands of years later, in the late 18th century, the relationship between humans and food underwent a transformation, as food became something to experience, and dining at a restaurant began to take the form of a spectacle. La Grande Taverne de Londres, the first in this new genre of culinary institutions, was peppered with crystal chandeliers and fine linen tablecloths; it also had a considerable wine cellar and a handsome, well-trained wait staff dressed to the nines. The spot became massively popular among political elite and French aristocrats as they could always count on great food, elevated service, and carried an air of exclusivity. It was arguably the first restaurant to achieve the status of “cultural staple.”

Nearly two and a half centuries later, great restaurants are the lifeblood of any thriving city – beyond sustenance, they provide and create revenue, employment, real estate development, foot traffic, settings for social interaction, and energy. But today, more than ever, restaurants provide entertainment and exist as entertainment products. Subsequently, dining at great, exclusive restaurants is one of the most prominent status signals in modern society. This dynamic is not entirely new. Rather, the extent to which the trend has taken hold is at an all-time high. In 2023, a restaurant’s merit is based on its capacity to entertain, delight, and signal social capital for its patrons, just as much as the quality of its food. 

Restaurants today are entertainment products, competing with nightclubs, sports games, concerts, and movie theaters just as much as they compete with your stove and fridge. This dynamic has massive implications for the restaurant industry and its relationship with consumers: most notably, as the cultural prowess of restaurants has skyrocketed, their value capture has remained stagnant at best, often declining as their margins are squeezed. It’s worth examining why, how, and how the space might evolve from here.

restaurants as entertainment platforms

Today, the concept of restaurants as mere food providers feels archaic. To compete in the notoriously difficult hospitality industry, most modern restaurants must create an experience that is part culinary craft, part service, part spatial curation, and part performance art; they are not just a place, but an experience. The why is likely a cocktail of our desire for social stratification, social media growth, industry competition, and perhaps the rise of food television; but it’s more fun to focus on how the evolution has taken place. Historically, the core of the dining experience has been the meal being consumed, and every other element serves to enhance or complement the meal. In observing many of the most popular restaurants today, a handful of the supplemental aspects of dining have taken precedent over the food itself, pointing towards this evolution of restaurants into entertainment platforms.

• Dining as an increasingly cohesive multi-sensory experience: personally, many of my favorite restaurants have a remarkable cohesion or synergy across each sensory input. The flavors match the sounds in a playlist, which pair well with the art on the wall, which compliment the architecture, which seamlessly blend in with the energy. There are bonus points for when patrons understand a restaurant’s energy and dress to fit that energy. 

  Cohesion creates an experience in which every sensory input is individually humming a note, but all of the notes come together to form a harmonious song that is the restaurant’s unique identity. (If you want a prime example of this, visit Charlie Bird in SoHo, one of my favorites).

• Immersive interior design: design obviously matters in reflecting the style or theme of an establishment, but I’ve also noticed more layouts in which the kitchen is at least somewhat visible, allowing diners to see the work and talent that goes into preparing their food. Open kitchens with pans sliding around, fire ablaze, food tossed in the air, and people gracefully moving about while shouting expletives at each other – theater!

• Chefs as public figures: Pioneered by Julia Child, chefs today can be rockstars and deities. They have their own shows and millions of followers on social media, they tour the world doing pop-ups, and when you see them during your dinner, it feels special. Much like sports fans will go to a Lakers game not because they like the Lakers but because they want to see LeBron play, Chefs are the magnets that attract people through the front doors of their restaurants, the restaurant is just the organization that houses them.

• Tableside preparation / service: ever had your server elegantly split the yolk of an egg over your burger  in front of you at Four Charles, your creme brulee blow-torched at the table, your cocktail lit on fire, or even your guac mashed in front of you? Thought so.

• Higher quality staff: being taken care of well is as entertaining as it is pleasant. In some cases, well-known sommeliers can draw patrons to a restaurant more than the head chef, and there’s an entire Netflix documentary on the rigor required to become a Master Sommelier.

• Limiting customer agency: some restaurants’ reputations stem from the format in which food is served as much as the food. Tasting menus, prix fixe, and omakase style experiences are common at fine dining establishments and give chef’s more surface area to showcase their skill and creativity, to ensure optimal pairings or progressions, or even to save the uneducated patron from making bad menu decisions. Other restaurants might change or limit their menus daily to create a sense of randomness or rarity among their menu items. The direct opposite of this trend has existed for years and it’s called a buffet: no curation, no flair, no skill, no structure.

• Culinary storytelling: Restaurants often employ storytelling and narrative in their service to make a meal feel more meaningful (or just for the flair). Think about the emotion expressed in plates at Osteria Francescana, sustainability narratives depicted at Blue Hill Stone Barns, or the poeticism and metaphor invoked by Atelier Crenn.

• Entertainment-first restaurants: On the more extreme end of this trend are spots like Benihana, Bubba Gump Shrimp, Ed Debevic's, and Rainforest Cafe where restaurants are optimize the entire meal around a patron’s amusement, and the food is just a cursory accompaniment to watching a comical hibachi chef, a movie themed atmosphere with characters and props, intentionally rude waitstaff, or a tropical adventure. No one goes to Benihana for the fried rice!

So what happens when we start to think about restaurants the same way we think about Knicks tickets, concerts, or other forms of entertainment?

implications: reservations as status signals & poorer value capture

As restaurants embrace their role as entertainment products and platforms, they’ve become conduits for consumers to feel or achieve cultural significance. Consequently, the value of restaurant reservations has grown exponentially, and, as status seeking monkeys, we’ve increasingly worn reservations at top restaurants as a badge by bragging, posting, reviewing, blogging, or vlogging about the experience. Further, frequent visits to a particular restaurant are often viewed by others as an unspoken, de facto type of membership. In New York City, I learned quickly that a reservation at Carbone is as much about eating the food [highkey overrated] as it is a signaling that one is a part of the in-crowd and/or culturally relevant. It’s a chance to sit next to Ben Affleck, Ana de Armas, or Carmelo Anthony; it’s a chance to be featured in the background of a paparazzi photo that lands in TMZ; it’s a way to showcase one’s cultural capital, social standing, network, privilege, and taste; it’s a chance to convince one’s self and others that they’re not an NPC.

As dining establishments become increasing hubs of social and cultural capital, the major takeaway is that restaurants and their brands are king: restaurants have more cultural and societal influence than ever before. Still, compared to other businesses and industries, restaurants and restaurant groups have rarely been seen as particularly profitable entities or as promising financial investments. Their evolution and cultural ascension has certainly not been free: as overhead costs have spiked relative to restaurants’ growth in prices, and margins have been further compressed by things like credit card processing fees or delivery expenses, restaurants have taken a beating. With the average restaurant’s profit margin at just 4% today, it’s abundantly clear there is a massive imbalance between the influence and cultural prowess that great restaurants command and the size of their actual business. In very few industries can an entity be a massive cultural staple while capturing such a small portion of the value they create.

How, then, can modern restaurants navigate this complex existence? How might the hospitality industry evolve? And how does crypto fit into this intricate tapestry of culinary culture and social dynamics? Stay tuned for Part II...

---

Big ups to my homie Abena for her valuable thoughts and feedback 🫶🏾 check out her James Beard award-winning podcast: The Future of Food is You

Also slightly-related side note: you should be watching the Bear on Hulu!