A Carytown restaurant and bar owner is converting one of his two neighborhood establishments to a ghost kitchen model as the coronavirus downturn continues to loom.
Kevin Liu, owner of The Jasper and Carytown Cupcakes, said his neighboring shops must pivot to survive. He said he had to completely change how he thought about business and go beyond adding to-go orders or delivery.
“You put out your delivery and to-go menus, and people are like, ‘Oh, cool, my favorite restaurant is coming back, let me order from them,’” Liu said. “But it loses the appeal, the draw, relatively quickly. The sales fall off. Now, we’re competing with every restaurant that’s within a delivery radius plus grocery stores.”
His solution is to create urgency for customers at The Jasper by making it into a ghost kitchen that features different pop-up food concepts every night. Liu is planning burger-, ramen-, pizza- and Mediterranean-focused concepts and hopes to partner with Chop Chop, a locally run food delivery service that delivers alcohol and charges lower fees than nationwide services.
A ghost kitchen is a cooking facility designed solely for delivery orders without a dining area. Unsurprisingly, that model has surged in popularity in recent months around the country, and Richmond is no exception. Garden Party, a vegan and vegetarian ghost kitchen restaurant, launched on the Southside in late June.
Liu said he expects to make around $700 in food sales per night and give at least 75 percent of that to the four chefs involved, which he hopes is enough to supplement their income once a week. The Jasper will keep the remaining 25 percent of food revenue and money from alcohol sales. The restaurant normally staffs 15, but it’s making do now with four employees.
“The elephant in the room right now is that all across the restaurant industry, you have all these cooks and chefs. Even if they’re getting their jobs back, they’re going to be probably underemployed,” Liu said. “They’re not going back to their 40-hour work weeks making the rates that they used to be making. It just doesn’t make sense.”
Before the pandemic, Liu said making $1,000 on food on a slow night was about the breakeven point. Now, that’s a strong night, and $400 on food is the barrier to keeping the lights on and paying staff.
“We are used to turning people away from reservations because we’re at capacity,” Liu said. “Now, it’s like we’re scraping to get 10 percent of capacity. And that’s not a COVID restriction, that’s just like demand is not there yet. If you want to make anywhere close to the money that you used to make, you have to come up with new streams of revenue.”
Liu, 33, is a Rockville, Maryland, native who moved from China to the U.S. at age 4 and was admitted to the Naval Academy at 17. Upon graduation, he served with the Marine Corps as an intelligence officer, and picked up a degree in technology and policy from the Massachusetts Institute of Technology.
In his spare time, he wrote a book about cocktails and got connected with Mattias Hagglund, a restaurateur who’s now his business partner. He developed his cooking skills while serving in Afghanistan and launched his first restaurant, The Tin Pan, which is also a music venue, in 2015. He then bought Carytown Cupcakes in 2016 and opened The Jasper next door in January 2018.
Liu said he’s paying rent for 5,000-square-foot locations while these days using just 1,000 square feet. At first, he looked to cut costs at his bar and bakery, and scrape by with money from the Paycheck Protection Program. But he said he realized this summer that it’s unrealistic to get back to normal anytime soon, given rising virus case counts.
“There is no going back to before,” Liu said. “The idea that we can just weather the storm until it passes and everything will be fine, no. That’s just not going to happen. … Weathering the storm for eight weeks? Sure. Weathering the storm for a year and a half? That’s not what you do as a businessperson. At that point, you either shut down or hibernate.”
To avoid hibernating, Liu’s found creative ways to generate multiple streams of revenue, in part through hosting lemonade stands on weekends. Adding shots to the lemonade is optional.
Meanwhile, Carytown Cupcakes didn’t close during the pandemic and saw success as one of few bakeries that remained open, kitchen manager Meg Canal said. Sales dipped in March but were around 90 percent of the previous year’s sales in April. The shop fulfilled call-ahead orders, and offered curbside pickup and free delivery from March to mid-June.
“Each of these streams, I mean, we’re talking a couple hundred bucks a day. But if you take a couple hundred bucks, a couple hundred bucks, you know, you start approaching maybe a thousand,” Liu said. “That’s what we’re hoping to get to.”