Marin County fine restaurants weigh cost-benefit of going take-out only in pandemic lockdown

UPDATE, March 30: Into the second week of a radical shift to to-go-only sales under large-scale shelter-at-home orders, two southern Marin County upscale seafood restaurants are showing the tough decisions many owners and managers are having to make in continuing to operate with 120 fewer workers and a dramatically different marketplace.

The county's order took effect March 17 to slow the coronavirus pandemic, but The Trident waited until March 20 to reopen for take-out and delivery orders to see how similar neighboring restaurateurs were handling that transition and to plan menu changes that would “travel well” to customers' homes.

“Last weekend, we had some sunshine, and people were out walking,” said Rick Enos, general manager, on Thursday. “We had a good weekend, compared to where we were before with take-out.”

At Fish Restaurant, sales have been brisk for the fresh seafood customers are taking home to cook, but to-go orders from the adjoining fine-dining establishment aren't enough to cover expenses but enough to minimize losses, according to co-owner Kenny Belov. He had to let 40 hourly employees go but looks forward to hiring them back when the shelter orders are lifted.

“We're going to stay on it and keep going for the sake of the community,” he said Thursday.

But at the seafood wholesale business he co-owns on San Francisco's Pier 45, proprietors and management of TwoXSea are having to get more creative with marketing and sales, after 95% of the company's revenue base - upwards of 250 Bay Area fine restaurants, family eating establishments and hotels - pretty much dissolved in the past two weeks.

“We've taken a step back 10 years to when we started this company as a garage band and had to figure out things as we go and play any show we can get,” Belov said. “We're adapting to the situation in front of us. We have a valuable protein and we're in a large area where people need to eat. My job is to figure out how to get it into people's hands we would not normally have gotten it into in the past.”

The remaining 5% of typical wholesale for TwoXSea are grocers. Though their sales have ramped up as consumers stock up for home sheltering, it hasn't come close to replacing the restaurant sales. So the Belov and a manager have gotten behind the wheels of two of the six daily-delivery vans - and the other owner driving a third van when needed - to deliver seafood from supplier West Coast fishing boats and the company's own brand, McFarland Springs Trout, to grocery stores and now to homes, a first for the company.

“We got rid of the fancy tour bus, and we're back in the station wagon,” Belov said, continuing the garage band metaphor. “It's no longer the chef audience we're after. It's the consumer.”

Right now, the grocery store and emerging consumer deliveries in the North Bay, San Francisco and East Bay are literally keeping the company's trout brand alive. The partners of TwoXSea operate a 100% vegetarian-feed fish farm near Susanville in Northern California, and the operation requires a certain rate of harvest to keep the population of fish healthy, Belov said. Current sales are allowing that to continue.

At The Trident, any of the sales over the first weekend of the shelter order came from people who saw the take-out sign out front then stopped in, with little coming from the updated restaurant website or listings with delivery services DoorDash (currently not charging restaurants), Uber Eats (fees of 20%-30%) and Dine In Marin ($7-$9 per order for member restaurants and 22% otherwise), a new local venture started during this crisis.

“We're faced with having to mark items up, but if you do that then the cut you're paying goes up,” Enos said.

What General Manager Rick Enos had seen from surrounding Sausalito restaurants that switched to take-out didn't encourage him. One chef owner at a place where he purchased a taco reportedly told him that between noon and 3 p.m. March 17 they had three orders, and sales the day before totaled $300 on operational “hard costs” of around $400.

But that restaurant, he observed, was getting by with an hourly order taker and cook, while The Trident is filling orders via its salaried staff of Enos, executive and sous chefs, and the assistant manager. Enos said he's looking forward to being able to hire back the 81 hourly workers he had to let go just after the shelter order, so they could apply for unemployment benefits.

“We'll see what happens through this next weekend, and then we'll decide what we're going to do,” Enos said.

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MARCH 20: It was shaping up to be a great year for The Trident, with sales up by double digits from a year before at the Sausalito seafood restaurant. But then the new coronavirus was declared a pandemic, and patrons not scared by that to go out for fresh lobster risotto or other Marin County culinary fineries were ordered last week to stay home and order take-out or delivery meals.

At another locally loved seafood restaurant on the other end of the small city, Fish co-owner Kenny Belov is fretting over the nearly 40 restaurant employees he had to furlough this week.

“Their job is going to be held for them, and I need them to come back,” Belov said. “We're approaching the 16th birthday at this restaurant, and some of them have been here from before the opening. These are people who had children and bought homes during this time based on these jobs.”

He's also concerned about his TwoXSea seafood wholesale business. Only a few percent of the deliveries that operation makes from San Francisco's Pier 45 are still happening. The biggest part of that business are upwards of 250 Bay Area restaurants, many of which are no longer placing orders, and that's generating waves through his supply chain of fishing boats from Southern California to Alaska and Hawaii.

“It' doesn't matter where they're fishing, I do not need their product, and none of my neighbors on Pier 45 need my product,” Belov said. “Those of us who have grocery accounts are doing well because they still need meat and produce. The restaurant industry has come to a halt.”

Belov and a couple of managers remain at nearly 16-year-old Fish to prepare to-go orders for what of the fine dining menus translates into cardboard containers, and the associated fresh-fish market is still open.

“It's going to wind up costing me more than we ever will make,” Belov said. He's glad that Fish has mainly fixed costs such as the fire alarm and insurance, so the business can weather this for a while. “There will be decisions down the road, if this is the trajectory, because there is not enough business to unlock it each day.”

Back at The Trident, sales plummeted to 25% of what they were a year before, between March 11, when the World Health Organization declared the COVID-19 virus a pandemic, and the March 16 order from Marin County to mostly shutter all but “essential” businesses and for residents to “shelter at home” to help stop the viral outbreak, according to Rick Enos, general manager. On Saturday night, March 14, the restaurant rang up 48 dinners, down from 289 on the equivalent Saturday night a year earlier.

The 5-decade-old Sausalito bayside fixture entered a new reality over at least three weeks for restaurants around the Bay Area: curbside take-out or delivery only prepared by crews a small fraction of what they were a few days earlier. Marin became the first North Bay county to join others in the greater Bay Area with “shelter at home” orders, and now all North Bay counties have such orders. Gov. Newsom on March 15 had recommended restaurants shift to half-capacity as part of “social distancing” guidelines to slow the viral outbreak, but the shelter orders dictated eateries switch to take-away orders.

“I'm not personally in a huge hurry, because people that are doing that, that are not normally in the take-out business, they're not experiencing any sales,” Enos said. The Trident started selling to-go orders on Friday, executed now just by the salaried staff: Enos, an assistant manager, chef and sous chef. The 81 hourly employees were terminated, so they could apply for unemployment insurance until Marin allows restaurants to reopen, currently set for April 7.

One of the big economic concerns with the drastic measures that governments in California and across the globe are taking to stop the outbreak is the toll it is taking on lower-wage workers such as in food service and hospitality industries and on other wage workers who cannot work remotely. That's one of the reasons why a number of lenders, utilities and governments are deferring certain payments on mortgages, student loans and other bills for a time.

Enos said that on March 17, when the Marin order took effect, he had ordered food from a nearby Sausalito restaurant that had switched to such orders. The chef owner reportedly told him that between noon and 3 p.m. they had three orders totaling $300, but “hard costs” for operating during that time amounted to around $400. But that restaurant, he observed, was getting by with an hourly order taker and cook.

In the restaurant business for 4 decades, Enos has seen first-hand what it takes to get a restaurant back up and running amid societal upheaval. He operated Compadres Rio Grille in Napa Valley for 12 years until it closed 2019, and after the 2014 Napa earthquake and 2017 wildfires the restaurant reopened in the days afterward. But it was able to survive because it Enos and his family were doing much of the work to move out what few orders were coming in.

“Some amount of volume is better than none, but once you start having to pay people to keep that place open, that's where the hard-cost situation comes in and exceeds the amount of volume you can do,” Enos said.

So The Trident has pared back its menu for the new to-go reality, items that will still be enjoyable up to 45 minutes later - from order completion to customer's enjoyment. That leaves the sandwiches ($17-$19), a couple of the modified entrees and popular appetizers such as the clam chowder made from the same recipe for 45 years. But fresh fish and the $48-a-plate live crab and 2-pound lobster with risotto entrees the restaurant is known for won't pack well, Enos said.

He's hoping the weekend and time cooped up with fixings from the pantry will prompt customers to make the drive to The Trident, where a valet's new task in the parking lot will be to ferry orders out to waiting patrons in their cars.

Belov at Fish also is waiting for customers to come back for pickup, but during what normally would have been a lunch rush there were no patrons pulling into his parking lot.

“The music is on and the fryers are on, but no one is here to enjoy it,” Belov said. “Wherever you happen to live, every restaurant is now a to-go restaurant, so you have so many choices closer to home.”

Contact Jeff Quackenbush at 707-521-4256 or jquackenbush@busjrnl.com.