The Big Picture

Be efficient and tech savvy at the same time.

Damian Mogavero may be the most influential industry insider you need to know but have never heard of—until now.

As founder and CEO of Avero, a New York City-based restaurant software company, Mogavero has been quietly leading some of the most successful chefs and restaurateurs, like Danny Meyer and Daniel Boulud, out of primitive times.

They ditched their old-school ways of running a business—Excel spreadsheets, notes scribbled on coffee-stained legal pads and even guesswork—for software enabling a data-driven, problem-solving approach in all areas, from server training and social media initiatives to labor issues and inventory management. 

“It’s like ‘Moneyball’ for restaurants,” says Mogavero, who chronicled this method for greater profitability in his book, “The Underground Culinary Tour: How the New Metrics of Today’s Top Restaurants Are Transforming How America Eats” (Crown Publishing), out in mid-January. “I define what it means to be a ‘New Guard Restaurateur’—a visionary who embraces data and food and beverage trends to create profitable and magical restaurant experiences for guests.” 

With 34,000 customers in 68 countries, including Tom Colicchio’s Craft and ‘Wichcraft sandwich shops, Four Seasons Hotels and Resorts and Wynn Las Vegas, Mogavero has racked up plenty of praise and street cred for his in-the-trenches approach to working with operators. 

Here he sizes up the state of the industry, the challenges restaurateurs face and what to watch out for in 2017. Unsurprisingly, all roads to making bank are paved by leveraging data through technology.

FF:  People are eating out more than ever, but there are also more choices. With so many options, what will define the ideal dining experience in 2017?

DM: There’s a megatrend happening today. It’s highest-quality ingredients in the most casual setting. Today’s foodies don’t care where they are, whether it’s a fast-casual joint, at the airport or a Michelin star restaurant. They expect great-quality ingredients everywhere. Before, highest-quality ingredients were just for fine dining.

The second thing is a thoughtful beverage program. The chef, the sommelier, the owner and other beverage professionals work together on the beverage program. It’s not just a great wine, beer or a cocktail list but also nonalcoholic beverages. If effort goes into a beverage program, you know the restaurant will have killer food. Beverage is a great source of revenue, and it’s a real differentiator for guests.

The third thing is knowledgeable service. A server is a guide to your hospitality experience. The chef, owner and managers spend so much time creating this experience, and a server who is not well-trained is a real problem.

FF: Would you be surprised if people stopped communicating with words and used photos of food instead?

DM: People are obsessed with taking photos of their food and sharing it because it’s a part of their identity. This is a huge opportunity for restaurants, but it’s also a double-edged sword. For chefs, their food not only has to taste great, but it has to look amazing.

"All it takes is one snap-worthy beautiful signature dish."

—Damian Mogavero

When the food looks great, restaurants have a better chance of being noticed on social media, driving more business to their restaurants. All it takes is one snap-worthy beautiful signature dish. On the other hand, if the food isn’t photogenic, people will be less compelled to visit. Equally important is for restaurateurs to understand not only their guests but also key influencers on social media platforms like Instagram and be ready to engage proactively. It’s not uncommon for restaurants to reach out to these foodie accounts and invite them in. If these influencers post one of their sexy dishes, it has a chance to go viral and bring in new guests.

FF: What do operators need to be wary of in light of the ever-present concerns around controlling food and labor costs, tracking inventory and repeat visits?

DM: It’s almost like a triple threat for the industry. Food costs are going up, part of which can be attributed to higher-quality ingredients that cost more. Labor costs are going up, and it’s harder to find great people. And there’s more competition than ever before in going after covers. This combination of competition and higher costs is squeezing the restaurant industry. There are a lot of ways to go about this, but make sure you’re collecting your own data and using analytics, industry trends, server productivity tools and food cost management to optimize every guest experience. Make sure you’re scheduling right and buying the right number of ingredients. In addition, make sure you’re providing servers personalized training in the menu categories where the data shows they need it the most.

FF: Food costs seem to be every operator’s Achilles’ heel. Thoughts? 

DM: Up until now, restaurateurs have had limited options to really help them with food costs and inventory management because many of these solutions are expensive and difficult to use. As a result, people don’t adopt them. We now have the Avero Food Cost Management solution that integrates a restaurant’s point of sale system with inventory purchasing, receiving and more to give a seamless, digital look into food cost data and real-time inventory information. It also offers sales forecasts and purchase quantity suggestions that tell operators exactly what they need to order and when they need to order it. Let the technology do the hard work for you.

FF: How can data improve service?

DM: If you’re not delivering the best guest experience, how would you know? That’s the reason we developed Avero scorecards. The scorecard (tracks sales by server and) can show the strengths and weaknesses of the server, which then allows you to train accordingly. So if someone sells wine by the bottle 80 percent less than their peers, I’m able then to go to the server to figure out what’s going on. In one case, it turned out that the server was afraid of opening a cork and wasn’t comfortable with wine service. Training addressed that problem.  

FF: What should a restaurateur always pay attention to when analyzing sales data? 

DM: Server-controlled items are a huge challenge for our industry. Here’s an example: Every restaurant serves coffee and juice at breakfast. Let’s say the average server gets a coffee or a juice on the check for 80 percent of customers, but another server at the same restaurant gets a coffee or a juice on the check only 10 percent of the time. If that server sees 500 customers a month, and the price of a coffee or juice is $2.50, that server is shorting the sales by $875 every month, or over $10,000 a year.

With Avero, we basically make it easy to see your server-controlled items. Once you see the transparency, you have a talk with that server, who then all of a sudden goes from 10 to the average 80, and that’s all profit because you’ve already spent the money. Who doesn’t want 100 percent margin on what you’ve already sold?

FF: Here to stay or passing fad: fast casuals, nutritious concepts and trash cooking?

DM: People want to be more health-conscious, but they also want to be more environmentally conscious. Vegetables are moving from the side of the plate to the center of the plate. This is not about serving vegetarians or vegans anymore. It’s a bigger part of the higher-quality-ingredients-in-the-most-casual-setting trend. 

Trash cooking is avant-garde. Will it go mainstream tomorrow? Probably not, but sustainability’s a good one.

Fast casuals are here to stay and serving the highest-quality ingredients in the most casual setting. The trend’s everywhere. Restaurants are the next big anchor for new real estate development projects.

FF: Let’s dig a little deeper into fast casuals. What are the watch-outs for this category?

DM: The bigger watch-out for this is to narrowly define it as a stand-alone restaurant. The questions for operators are, “Where are people going to be, and how do I develop a casual, small concept where people are?” Whether it’s a food hall, an airport, a hotel, a casino, a school, a hospital—just think of this more broadly. Even in New York City, there’s now a fast-casual unit in a traffic island across from Madison Square Park called Madison Square Eats.

FF: On-demand services are popping up like crazy. How can restaurants make this work in their favor?

DM: The bigger trend here is that the upcoming generation is the on-demand generation. They want everything now. It’s a great challenge for a restaurateur and a great opportunity. It’s a challenge that you’ll maybe have fewer people in restaurants during traditional meal periods, but they’re basically getting food delivered to the office or home. We see a growing group of our clients around the country embracing a variety of these on-demand services, whether it’s the original players, like GrubHub or Seamless (which have since merged), or newcomers like Caviar, UberEATS, Amazon Prime Now and Postmates.

The most important thing for restaurateurs is understanding who the players in their local market are. Test it, but also realize that it’s a different dining experience, and you need to make sure your menu adapts because these dishes have to travel well. It’s a great way to drive revenue even if the customer’s not coming in.

FF: What can operators do to continue their restaurant’s growth?

DM: Optimize every single person who comes in; using technology can help. But how do you make sure that you’re continuing to innovate your offerings? What we see with successful operators is that they’re able to continue to innovate to stay relevant and current. I’m optimistic for the ones embracing technology (like analytics and social media), using the highest-quality ingredients, offering thoughtful beverage programs and committing to great service.


What’s so special about Damian Mogavero?

  • Mogavero created Avero, a New York-based technology company. Its software mines sales and labor data for insights that allow operators to increase efficiency, pinpoint problems and ultimately gain greater profitability. Part of the company’s success lies in knowing first-hand the challenges restaurants face.
     
  • Mogavero got a taste of the restaurant business at 16 with his first job as a busser at a hotel restaurant in Cherry Hill, New Jersey. The general manager gave him the best advice ever: To be successful in this business, you have to do one thing—exceed expectations.
     
  • He earned a finance degree and worked for a private investment bank before graduating from Harvard Business School with an MBA.
     
  • The idea for Avero, which launched 17 years ago, came when he was CFO of a small restaurant group.
     
  • Earliest Avero adapters made up Zagat’s top-rated New York City restaurants when the wattage of chefs and restaurateurs could only go up. The food scene was also exploding in Las Vegas, giving Mogavero the benefit of being at the right place at the right time.
     
  • As the empires of these influential restaurateurs grew, so did Avero and Mogavero’s clout. In January, he will add author to his credentials. “The Underground Culinary Tour: How the New Metrics of Today’s Top Restaurants Are Transforming How America Eats” (Crown Publishing) defines the “New Guard Restaurateur.” Find out how to be one.

     

Editor’s note: Full disclosure: US Foods, which backs Food Fanatics, recently partnered with Avero.


3 ways data caN INCREASE PROFITS

1. Spot all stars: Some servers kill it with wine sales while others sell desserts like crazy. Avero software can identify these servers, and owners can implement training programs to increase their knowledge and confidence.

2. Identify slowdowns: Scheduling is more effective and labor costs decrease when data identifies slower customer counts through sales patterns that consider the day of the week, weather conditions and the effect of surrounding local events.

3. Catch low inventory: By using tools
similar to those used to hone scheduling, software can prevent or at least decrease the likelihood of running out of a dish, a problem that frustrates diners and chips away at customer satisfaction.