Natural disasters can wreak havoc on a restaurant’s bottom line far beyond the initial pain of power outages, flooding and structural damage. Often, it starts a domino effect.
Fires, floods and earthquakes cripple a restaurant’s ability to reopen. Food can’t be cooked, employees can’t be paid and rent can’t be covered, which results in a financial logjam that leads to irreparable damage.
Although data on restaurant losses due to natural disasters is scarce, the cumulative economic damage from these events totaled $306.2 billion in 2017, according to the National Centers for Environmental Information. Add the fact that a 2016 study from Aon found that just 26 percent of global natural disaster losses were covered by insurance, and it’s clear just how much is at stake.
Fortunately, operators who have endured these difficulties can provide invaluable lessons on weathering the storm.
CREATE A PLAYBOOK
Ralph Brennan, founder of the New Orleans-based Ralph Brennan Restaurant Group, will be the first to admit he didn’t have a comprehensive disaster- action plan in place prior to 2006. Until that time, the company’s hurricane directive was to pile up plywood and sandbags as a bulwark against the storm and hope Mother Nature blinked.
Then came Katrina in August of 2005. Although water damage at his City Park restaurant Ralph’s on the Park was minimal, neighborhood power outages went on for months, and Brennan couldn’t reopen until November. Meanwhile, his French Quarter concept Red Fish Grill was operational in a month, serving a minimal menu cooked on a wood-burning grill.
After the storm, he immediately created a detailed 68-page document, which he now reviews with employees during an annual staff meeting at the start of every hurricane season. The plan includes safety precautions, including directives to unplug appliances, turn off water sources, purchase charcoal, restock wood supplies to operate grills and charge backup cellphone batteries for the management team. He also has “recipes” for emergency sanitation standards, such as how to cook with bottled water and serve foods in single-use bowls, plates and cups.
“We hope we’ll never experience another storm like Hurricane Katrina, but if we do, we wanted to do all we could to protect ourselves,” Brennan says.
At the first rumor of an incoming storm, it’s critical to continually monitor weather reports and reconsider product orders, says Vincenzo Betulia, chef-owner of Osteria Tulia in Naples, Florida.
When Hurricane Irma approached Florida last year, Betulia placed smaller, more frequent orders, requesting only the bare necessities, and altered his menu to match the ingredients on hand. “We wanted to have as little product as possible when the storm hit,” Betulia says.
Thinking about maintaining revenues after a storm is also critical. Betulia moved sauces and broths to the freezer, along with 5-gallon buckets of water to help the freezer maintain its temperature during the power outage. Bottles were filled with filtered water to ensure Osteria Tulia had water to keep cooking.
In the wake of the storm, Betulia talked to nearby chefs, some who suffered up to $20,000 in product losses. Fortunately, Osteria Tulia’s losses totaled just $600.
“The rest of Naples was on boil notice, but we were able to serve a full menu,” he says. The restaurant reopened only five days after the storm.
When Hurricane Irma flattened Snappers in Key Largo, Florida, co-owner Peter Althuis decided he’d cook his way out of the disaster. Rather than wait to rebuild, Althuis set up an outdoor grill and makeshift bar a few days after the hurricane, serving hamburgers, hot dogs and alcoholic beverages.
Without power, he went old school, accepting only cash. Employees returned to work, cleaning the site and serving drinks. Then, he fired up the Snappers Key Largo food truck, which sustained minimal damage during the storm.
Building a menu that reflects the mood of the hour was critical, including the introduction of a dark-humored “Irmageddon” menu of conch fritters, chicken wings and nachos.
“Everyone in the Keys was hurting, and the community needed a place to hang out and talk to other people in the same circumstances,” Althuis says. “The food truck is keeping us all going.”
In the aftermath of Hurricane Katrina, staff at Red Fish Grill relocated to temporary housing outside of New Orleans. Brennan established a website and an 800 number to provide updates, including details on what his employees really wanted to know: when— and how—they would get paid.
Because the hurricane hit on the last day of a pay period, the controller took payroll records home, assuming she would get the checks out within the week. Unfortunately, flooding took the restaurant’s bank offline and options to pay staff digitally were limited.
Once the restaurant was running again, Brennan instituted a new policy: If the restaurant closes or the staff evacuates due to the threat of a natural disaster, employees will receive $500 checks and a guarantee that his books will be balanced when they return to work.
“We’ve done it twice since Katrina, and it’s worked well,” says Brennan. “We believe that we have an obligation to help our staff, and if we treat them well, they’ll come back.”
GIVE A LITTLE, GET A LOT
Although Kitchen 335 in Healdsburg, California, didn’t suffer damage when wildfires swept through Napa and Sonoma counties in 2017, Chef-owner Octavio Diaz wanted to step up to help local residents.
While the wildfires raged, Kitchen 335 served countless firefighters and rescue workers, and began donating 10 percent of proceeds to re-relief agencies. He also established the restaurant as a drop-off point for donations of nonperishable food, diapers and clothing, all while working with local churches and shelters to distribute necessities to re victims.
“The community has always supported us, and it was our turn to support the community,” says Diaz.
CREATE A PLAYBOOK
A disaster relief plan should include safety precautions:
- Unplug appliances
- Turn off water sources
- Purchase charcoal to cook outdoors and restock wood supplies to operate grills
- Charge backup cellphone batteries for the management team
- Create emergency sanitation standards
- Learn how to cook with bottled water
- Serve foods in single-use bowls, plates and cups