David Chang on ghost kitchens, drone delivery, and his podcast moving to Netflix

confusing. But uh we can talk about that more after our next guest joins. We have David Chang uh in the studio. Welcome to the show. How are you? What's up, guys?

Good to meet you. Thanks so much for taking the time to talk to us.

Great. Great fit, too.

Looking great. Oh,

you're ready. Ready for anything?

Yes.

Well, I'm uh prepping out for a bunch of things right now. And then again, I'm planning and we'll be in Vegas uh by dinner

for F1, right?

Yes, sir.

Fantastic.

We'll be there Saturday. Can you help uh everyone in uh in the audience understand just the shape of your business between

the shape of your empire?

The shape of your empire. Empire is the correct term. Sorry, not just business.

Um [laughter]

well um it's it it's it's restaurants. We have some quick service, fast casual. Yeah,

we have casual. We have um fine dining and uh we have couple spots in Vegas. We have a couple places here in Los Angeles. Um I think it allowed us the pandemic allowed us to sort of refocus exactly our growth strategy.

Yeah.

Instead of trying to open up all around the world um which we had been doing until 2020. I think um we we we uh

had a lot of sort of plans in place for doing CPG. So,

uh, that like many other things in the world at that time sort of expedited the plans and and we, uh, went head first into, um, you know, we had dabbled in making some sauces here or there, but we had always wanted to go into making noodles and and, um, that's sort of a good part of our business, too. So, it's it it's equal parts restaurants, even though they're now split out into two completely separate entities. Um, they take up a lot of my time. And then me, it's it's mostly media stuff these days.

So, I'm I'm I'm dressed up right now because we're

doing um practice runs for our Netflix show on uh uh which we air at 400 p.m. Pacific Standard Time, dinner time.

Have you Have you ever tried live streaming? We've we've we've wanted somebody to do the version of our show that's just like a live like a daily live cooking show, and I feel like you've got you've certainly got the personality for it. It's it's basically a full-time job, but I could see that being a hit.

Um, we we we tried to do that. You'd be surprised how adverse I think a lot of people that are running networks still because uh I think if anything, it might have to go on um you know, one of the free streaming platform services, but that's not out of the question. It's certainly on the long-term projects list for major do media is to do uh just all day, you know, totally transparency. What you see is what you get. And you you do see some people doing it on Twitch.

Yeah, that's what I'm saying. You don't need the network. Just

I was wondering

create a Twitch account. Create an X account,

but uh I'm currently pretty preoccupied with Netflix and Amazon

and and Spotify these days, especially since our podcast is moving over to Netflix.

Oh, really?

You're in that you're in that package.

Yeah. Talk talk about I mean, obviously there's a bunch of uh particulars that are are probably under the under the hood, but uh what excited you about taking a podcast to Netflix? It's an interesting strategy. It wasn't on my list of predictions for what Netflix would do. Uh what have they shared with you about how they'll surface that, what the audience might be like, what the Netflix viewer is looking for in podcast content? I find that whole strategy fascinating.

I would love to answer all of those questions, but I don't think I'm the

Okay. Anyway,

I I I I would I think if I was the person to answer that, it would be funny to both Spotify and Netflix because there are other people that are,

you know, certainly designed to answer that. We'll have some.

I will tell you that it's it's it's been something we you know, we have what 600 plus episodes of our podcast and it certainly changed over the years. When I first did the podcast, it was much more of an insidider take on the restaurant industry. Um and and sort of a sneak peek in terms of the thought process of opening restaurants or, you know, pre-opening of a friend's restaurant like my buddy, you know, opened up Angler in San Francisco. We we sort of gave everybody a sneak peek of the, you know, the the the the philosophy behind it. And then the pandemic happened and you couldn't travel. So it just sort of shifted and we've been waiting for this moment quite frankly where instead of talking heads cuz food is the one thing which is sort of dumb, right? It's the one kind of podcast that we can't really react to culturally. Uh I'm very close with Bill Simmons. I'm part of the Ringer podcast network

and um you know we can't watch some movie and react to it and we certainly can't watch a Monday night football game and then react to that either, right? So food is so ephemeral and in the moment and also more importantly not necessarily scalable.

So um

and now with video right and more people um you know with all the data and like more people are watching podcast than actually listening to it.

You know there's certainly a lot of people still listening to it, don't get me wrong, but it's it's certainly in the near future going to outpace it if it hasn't already. And now it gives us the opportunity to evolve again and to offer a podcast that is somewhere between a TV show and a podcast.

Yeah.

And I can do that cuz cooking is something I can do that you know other people that are maybe doing interviews or such as yourselves like you know would you be cooking and doing this interview right now? I don't know if a lot of people would sign up for that. It'

be very hard. I [laughter] suspect

it's hard to eat and and uh do a podcast eating mic possible. But even cooking

uh we were we were talking earlier uh on the show about kind of the delivery app experience like the the dynamics of like tipping in and delivery apps. Travis Kalanick

uh uh uh was commenting on on on a on a post of ours yesterday. He's got a new product called Picnic, which is like a front-end delivery platform uh just focused on corporate meals. And like the key value prop is uh no tipping and no fees. So they're focused on like higher higher volume orders. So like teams of like 25 people plus. I'm curious like how like getting I wanted an updated take on from you on like what it's like working with the delivery platforms today, where you think there's opportunity. uh right

and all that stuff.

Well, um I don't know if many people know or remember in 2016 we created the very first to my knowledge um there might have been something called a ghost kitchen but no one called it a ghost kitchen. We we teamed up with um uh Thrive and Will Gabri and Josh and um

uh Caleb etc. Great team and we opened up Maple and we were doing like 10,000 meals a day out of New York City as a full stack app.

Yeah. Yeah, we were delivering.

I had no idea. I I didn't I didn't realize you were behind that. I remember I remember Maple, but uh that's cool.

And um yeah, like it's something that I've been wanting to do and had done for a long time because I saw that's where food was going particularly because of the the it's it's been a 30% cut for for some time on delivery fees and that's just not a sustainable model for the the delivery companies and the restaurants. So uh it was a real uh opportunity to just sort of bridge that and to to do everything oneself. Um and uh yeah and and so much so I believe in that we started another one with um called Ono which was more of a fast food. So like Maple you might get a nice kale salad and a butternut squash soup. and Onondo. We started with U Garrett Camp's um uh Fun Expo and we did which was like a cheese steak and fried chicken. So I was all in. I was all in. We were probably just 6 years too early. Yeah,

it worked but not enough where it is today because

but is it so is that is that model is the model like the hard thing is like cloud kitchens is the dominant like like company in that space but they're just incredibly like secretive right and so it's hard for me to get a I haven't done you know much digging but it's hard for me to get a read on like is the model durable is is is there going to be a lot of value creation there or does it ultimately does that ultimately kind of fragment like a lot of the the restaurant industry has as well.

Listen, I I I think it's like anything else in tech, right? Remember in the.com bubble you had like tubeox.com, right? Like

yeah,

there's only like three or four companies that really

came out of that.

Uh same stuff what I imagine with all this AI [ __ ] right? um [laughter] you know like I can't even tell you in the food space how many companies are a food logistics company but now it's AI right like [laughter]

it reminds me again in 99 when at least in New York City every company and I won't say every company but a lot of lot of places were now changing their name to sort of pizza 2000 dry cleaning 2000 right it's just a sign of the times and [laughter] and uh I I just I think that in food delivery, you're you're going to have about three to four winners, if that. And certainly, I would never bet against Travis and and the team there at Cloud Kitchen. Uh definitely not I I think what Tony and the team at Door Dash is doing is just unbelievable. And clearly you have Uber and the Postmates guys.

So, um yeah, to me that's pretty much going to be the space. And I think whence I'm not sure when, but when they are able to be more open and transparent about everything, people can be like, "Wow, that's a that's a pretty goddamn huge business." Yeah,

makes sense.

Interesting.

Uh,

drinking culture. And

any restaurants been caught using AI generated imagery for their for their menus or any of the food delivery apps yet?

That's a good question. No, but you know, like I I think it's been it's the same [ __ ] that's happening, right? And that and like

AI to me is like the getting the lowest common denominator things and sort of like crowdsourcing and just getting something that is not necessarily perfect but just good enough.

And I I just think that in restaurants that's basically been like consultants, right? Yeah.

Um they've just been that just like I can go I feel like I've been going to AI generated restaurants for some time now. You know, it just hasn't been called AI. [laughter]

That's funny.

It's a good take. Uh are you excited about drone drone delivery?

You know, that's one thing where I thought it was going to be a total zero. I'm dead wrong about that one. I think it's definitely going to be a thing. And um

Well, isn't it is exciting as a chef to to know like if I make this, it will arrive hot? No, it's not going to arrive. Well, that's a whole other thing with this whole the one thing I will tell you under the food delivery space and I've talked to just about everyone under the sun over the past 10 years um that's tried to start up a food delivery company because they're like, "Oh, this guy's done it a few times. Let me just sort of steal all the ideas." And I'll tell them every time I'm like, "Unless you've created some kind of new technology to cook the food, it's going to be hard to really um make the food hot ultimately, right?" like um how should I say this? There's no new technology to make the food better. None. So um the delivery drone unless it's cooking the food as it flies, it's always going to be limited.

An oven oven in the air basically.

Yeah. I mean like that's just the truth, right? Like and also a lot of these places just have a bottleneck because everybody wants to eat at 6:30, 7:00. So there's just there's not much you can do to make the food go out faster.

Yeah.

Or hotter. And more importantly than not, everything can be delivered well. Like French fries will never be able to be delivered well. Right. The next step is going to be whoever makes the food literally right outside the house

or apartment.

Have you heard any pitches on that?

I have. any any [laughter]

No, you don't you don't have to you don't have to give names, but like I'm like it gets to the point where it's like a street we just have like like a massive proliferation of like street carts and it's and maybe maybe like

well I mean I I'll tell you this a lot of these p I haven't been to it in a couple years because I just don't want to do it anymore but um a lot of times there'll be a very success like a a chef that's worked 20 years at a three mission star restaurant making the food, you know, and it comes out and I'm always like, is this person going to be making the food? You're going to get this quality talent making the food at every single sort of satellite location. And the answer is they haven't even thought that far. And the other answer is that's not a reality. You know, you might as well be pitching me a unicorn, literally a unicorn with a horse and a a horn on it because it's not going to ever work. Because that's the hard part about this business, right? uh cooking is still a physical endeavor and for all the the the VC money and tech money, it can't sort of solve that riddle of how do you make physical labor go away

or done better?

So, you don't you don't think we're going to you're you're very bearish on the humanoids up.

No, no, no. I'm not bearish on that either. Um I spoke to somebody pre- pandemic. We did a show and we did some research and and uh uh a robotics expert and we talked to some people at Caltech and a few other experts and if somebody was like ah maybe 40 50 years away and uh I talked to [laughter] I talked to someone recently and they're like yeah we're probably 15 years away um from getting somebody that has a robot that has the dexterity of a high-end best-in-class sort of chef. Um, so no, I I I it's going to happen. If anything, I think you're going to see um the next 5 10 years, you're going to see robots. You already see it in um I [clears throat] mean I again like I I don't think it's been a sudden, oh my god, there's robots. There's robots in the kitchens all the time. Like if you go to a good restaurant, there's dishwashers pretty much a transformer robot.

It's amazing. And that does the work of like 20 people.

Under pretty underrated

underrated. And and if anything, you're going to see machines that take the binary movements out. So a fryer that goes up and down, a bathroom cleaner, things like that. And already dishwashers are pretty advanced and that can handle very expensive stemware.

So finding somebody that can polish stemware, you know, you might get a wine glass that could be $250 per glass and if you have a hundred of those, that's quite an expensive inventory for a restaurant. You need someone specifically trained to do so.

Yeah. And that's a hard position to find. So yeah, that that kind of position will be a robot. No questions about it.

That makes sense. Uh what's the most overrated trend in food right now?

Oh, man. I'm trying to stay positive these days, guys. [laughter] I I uh uh I I think I think there's a way to answer the question by just saying like there's things that can be popular now that are not dur like durable trends. So,

well, I I would say the the most annoying trend is that everything has to be the best.

This hyper hyperbole, right?

I have to have the best X.

Mhm.

This restaurant has to be, you know, world class number one. And um they hate to tell it to you guys, but I think most people don't wouldn't even know what best is if they ate it.

Yeah. Um, and I think for the most part, I'm just now on this mantra personally of does it bring you joy? Does it bring you happiness? And that's really all that should matter. Um, it's such a relative subjective thing. But more importantly, I'm just trying to tell people like good is [ __ ] hard to do.

Mhm.

Like just good is hard.

And I think we need more people to sort of appreciate just good or like even boring good than the world's best. Oh my god, this is the greatest thing I've ever had. That to me is the worst trend in the world is, you know, and the media and sh we're all part of the problem too, right? You know, all these lists and it's all stupid ultimately.

Yeah.

But

do you think do you think we'll ever get to a point where like in in tech in the technology industry, many many products get better with scale for like a variety of reasons. food has felt almost always the opposite of that where you take an amazing concept in a in a tiny tiny little restaurant, right? Like, you know, a thousand square feet and the second you add the second restaurant and the third it just kind of tends to get it tends to get worse and worse and worse and worse over time. And that's just like there's one there's one, you know, maybe it's one chef who had a had an amazing idea and it and it and it just is very difficult to scale quality. Are you optimistic that there could be any new technology introduced that would kind of change that dynamic or is that just kind of an iron law?

No, I I think it's not an iron law. It's not like a law of thermodynamics. I'm sure somebody could figure it out. But you know the the you just mentioned something the fact that something that's great is not scalable. Um and for years, you know, I've certainly tried to do it and scale these things. I I just sort of spoke about this at Reed Hoffman's uh Masters of Scale conference, right? Like I sort of everybody's at that conference because they want to scale an idea. And I said, you know, the the easy ideas are to scale an idea in food that is um you say cheap, but affordable and mass-produced,

right? The other end is um high-end experiential dining,

which weirdly has become very scalable because of its inaccessibility. Um it would it's the equivalent of like getting front row tickets at the NYX or you know Chase Center or something like that because you're now eating at say the French Laundry. No one else can get there. You may not even appreciate the food but it's now a social flex. It's cultural currency that you can sort of have and it's ephemeral and because no one can have it. Weirdly, now that experience is weirdly I mean it's scalable because that actually is crazy marketing for the French Laundry, right? And the demand for that kind of restaurant is through the roof. And what I mean by that is restaurants, it doesn't have to be super high-end in in Napa Valley. It has to be anything that can't be copied immediately.

Right? You can't watch a YouTube video and decide I want to open up a restaurant like this. I can't just you make an easy faximile. So it could be barbecue, it could be sushi, anything that is bestin-class that people have a hard time copying. That's like the barb value. So you have really affordable make mass-produced stuff on food on the one end. The other end you have things that very few people are going to be able to experience or eat. And you know that's been sort of uh elevated because of technology right in different ways. But I chose sort of challenge the audience that you know because every I mean I mean you guys know I I I talked to a lot of people in tech and probably a lot of your peers and they're always wanting to know the next big thing in food and I'm going to tell them like the hardest thing that the answer that needs to be solved is how do you scale the middle

right? Does that make sense? like the mom and pop restaurants, the diner, the the the restaurants that are just like good again. Uh how do you make it so they can survive? Cuz they're like cultural banks. They're great, but they're not they don't have the sizzle. They don't have the

maybe the bottom line that makes it sort of cool for investment. Um, and again, it's not about creating a company that's like the pickaxes and shovels for that middle market restaurant, but there's got to be something else that can like be something that's gamechanging. I don't know exactly what it is, but uh I never talk to people that are trying to make food concepts or invest in food concepts that are actually concerned about the [clears throat] middle. And I'm not talking about credit card processing and [ __ ] like that. I'm just saying like in general,

um, there's a lot there. That's the meatiest part of the food industry right now, but it's just too damn hard and nobody really wants to touch it.

Interesting.

Have you seen any interesting experiments on like the capital side of of uh like new restaurant creation? Has anybody tried to make like a Y combinator for for restaurants where there's, you know, a talented, you know, uh owner operator chefs can get some seed capital and kind of support uh to go from zero to one. Um

because I feel like you would have tried that by now.

We we have definitely tried it. I I I won't say all there there. We've tried it. I know a lot of restaurant groups have tried it. I know there's spuns out there um that try to do this. But um I would say um you know uh Ron Parker created something called hospitality NX and that's a website that is a little bit like a job board legal zoom but also a place for people that want to raise funds. So that that's something. Um but I think for the most part um it's not as organized as other you know at the end of the day it's because um it's hard to create an idea that uh um has a high barrier of entry in [clears throat] food.

Yeah.

What and there's no moat to really create. Right.

Yeah.

Yeah. on on the on the topic of like you know starting up and go to market strategies are there uh are there risks to like going too viral early? Uh we've experienced a bunch of uh like rage bait in tech recently where people have sort of designed products that are that are in designed to the pro the whole product is just designed to enrage and go viral and then get some attention.

What do you mean by enrage? I I'm not familiar. So, so, so a company a company made a product that is like a developer tooling. So, it's like software to help you make software and they use AI in it. So, there's minute there's time periods where you have a little twominute break and so they added the ability to gamble with stake while you're while [laughter] you're making software and that made a lot of people mad for for obvious reasons. So,

or just deliberately picking

rage bait in food would be like a product that had like a single meal that has 1,00 g of protein. Like I could see a restaurant doing that just for the just just to try to get people to make Tik Toks about it.

I mean, yeah. I mean, I don't know rage bait, but like again like this has been happening on for for forever anyway. you know, doing something that is probably going to, you know, [ __ ] I've opened up restaurants that I guess have been like that, too. You know, it just [laughter] you're not, you know, I think if anything, it's just taken to another level because I would say that a lot of chefs now when they're talking about dish, is it is it something that the younger generation will find uh appealing to to to to uh record? Um,

and that's what I mean. It's like it's this it's vaguely experiential, but it's very ephemeral at the same time. So, um I don't know. I want to be optimistic again. Uh I'm usually Mr. You are over here about this, but I do think that with all of this aside, with all of this access, with all this democratization of knowledge, um because culinary knowledge with a younger generation is higher than it's ever been. I mean, it's never been better to eat in America. uh it may not have the sort of the titans of the industry as it used to because things have sort of leveled out but eating today like I talk about this with people a lot in the industry that travel um you can find a great restaurant in every city in America for the most part now

it's pretty remarkable

if you just look at that right so maybe New York or San Francisco or other metropolitan cities are not as great um they're still great but it's really broadened out and flattened out across the country. So, Oklahoma City and you know, places that are tertiary cities to most people are actually might have some of the best restaurants in the in the country. And and I think that sort of pattern is what you're going to see throughout food. [clears throat] And this is a long-winded way of sort of answering this sort of rage bait. I think because of that need to sort of find something that is going to create kind of some kind of spark um in food that is the catalyst that's going to cause people in food to get better at their craft

because at some point all of that [ __ ] is just going to wash away and you're going to be left naked with something and if you want to be able to have the real goods to show for it and I think that I really feel strongly that food is about to go into this very specific point of like a little bit like Japan where you can open up one specific kind of bakery that that makes one specific type of thing and you do it better than anybody else and you're going to see that here in America. I I feel very strongly about that.

Yeah, I I love that approach. What uh what advice do you give to uh kind of emerging chefs on media strategy? I think in in tech there's like like we tend to see kind of a high low strategy where you want to be like super online getting a lot of attention or you want to be kind of the the mysterious dark horse that's kind of going over the radar and there's like a messy middle that's probably a disaster.

Yeah. I I don't think that that pattern is any different than than what you see in food. Um but at the same time, I think uh you know, I don't know if apathy is the right word, but I don't care about it as much anymore either.

Um because it just I know I'm not the only chef that feels this way. It's just some people are doing it more than ever and getting better at it, but others I think are just sort of getting exhausted by the whole thing because um I just don't know what that best long-term strategy is.

Um and now you have an older generation of, you know, I'm I'm 48 years old. I know chefs that I won't say who that are like clearly gotten a social media strategist or somebody because their content is really [ __ ] good right now. And I we we I I still don't know which one works, right? Um because once you feed that beast, you have to do it all the time. Oh, yeah.

And that's a lot of time. So I I I don't know if the better thing is to just be word of mouth because ultimately all of this is is word of mouth.

Yeah.

Right. And

and do you build a relationship and that repeatability and and like there's my favorite restaurants in LA like they don't have to do marketing to me, you know? I don't need to get an email. I don't need to see them on Instagram. I'm just going to go there like when I have the time, right? Um and so I I think

I mean, yeah, I think I think that's the zag, right? Um

but you can't do that unless you actually have a point of view that resonates with somebody.

Yeah.

And if you are constantly sort of pandering and figuring out like how to execute other people's dreams, wishes, and visions, and what the hell are you actually making?

Yeah. And you don't want to get to a place where your content is better than better than the product. And I'm sure that's like, you know, a lot of the more the more you time you spend on content, like the the more greater there is a likelihood that that it could get to that point, I think.

Yeah. I mean, but like do you guys care about what you see on social media still? Like I I actually think there's a bifurcation that's happening with what people see versus what actually people are going to eat. I do think that there's I don't know maybe the the steelman argument for the the viral over-the-top uh you know Tik Tok that gets me to go to a restaurant is that it can in some ways create like a shelling point and like a a coming together like a if there's something that's trendy and and I and it's an excuse for me to pull my extended family my friends different people and it just gets us a an opportunity to kind of come together there and experience that like even silly, trendy, over-the-top thing. Uh I think that there's something that can be good about that. But um but it's certainly not like the primary uh reason why I go to a particular restaurant. No, I mean that's the thing is like I actually [laughter] I I we're working on a show and I can't say which or where, but um you know sort of the thesis is we're going to take these lists that people find or things that are viral and actually

go out of our way to avoid it.

Okay. [laughter]

You know, go next door to the restaurant that you're supposed to go eat at.

Okay. Oh, that's cool. That's very cool. I mean sort of that that in principle, right?

Yeah. No, I like that as a philosophy.

It's just like the other thing is I I I I sort of mentioned it earlier in this the conversation about if somebody was tasting something that was truly good and remarkable, would they actually know what's good and remarkable? And I I think currently we we again have a a knowledge uh uh that is greater than it's ever been in terms of food. But, and maybe this the same way in fashion and architecture and film and other arts, but does your audience actually know what good is anymore?

Because I don't I don't know, right? And and I'm not it's not trying to be snoody or an artist. I'm just saying like let's just talk about wine right now. If if I'm giving somebody like a like 1998 Ravino, you know, from B white [clears throat] Burgundy to somebody that has never tasted it before, I know that it might taste good to them, but will they appreciate it?

Mhm.

Because this person might be more into natural wines than, you know, oxidization, etc., etc. So, it's like I'm not saying that they're not right, but I always joke like you can't, you know, my friend used to say um you can't um you can say that you can never say that Salaryi was better than Mozart.

Mhm.

Right.

Yeah.

You he was good, but he was not better. And that's just sort of unequivocal. And you can appreciate Salary, but you can never say that he's better than Mozart. My concern is people don't even know who [ __ ] Mozart is right now. [laughter]

Yeah. And and I and that's sort of my concern when it comes to um sort of social media and food is who's deciding what is actually good.

Just because something looks good doesn't mean it actually is good.

And I know this is getting into a meta sort of philosophical conversation, but this is the [ __ ] I think about.

Oh, I love it.

That makes sense.

Uh last question on my side. I'm curious how uh restaurant operators are planning around America just drinking less than ever.

Yeah. Well, that is the, you know, I I feel like the boy who cried wolf. I've been sort of screaming this flag for a long time. Um this has been this is the real existential threat.

Um like for example, LA, the biggest thing that happened in LA over the past 10 years in food was really ride sharing because people were getting drunk. And you saw that in revenues. Restaurants are going through the roof. And if anything, restaurants was a bubble, right?

Um too many restaurants. And I think we're still sort of in this bubble. Um that's a whole another conversation. But um I I think that you can see now, at least in LA, people are drinking much less.

I think you see a younger generation maybe taking some edibles. They're just not, you know, the crazy thing is I Kids just don't drink anymore. Like kids start when they start a tab, which is crazy to me. They close it out every time.

Yeah. [laughter]

What is going on? Like they're never going to know what it's like to wake up at 3:00 in the afternoon being like, "Shit, I left my credit card at that bar. I got to go back and get

They're two responsib There's a responsibility.

It's hurting small businesses. it is hurting small businesses and and um but I think that there the if you look at the sort of the only look at the blended numbers for most restaurants and beverage sales I think that it might look flat or down but it's actually I think way worse because once you split out the 1% of the 1% that are drinking like these huge bottles of expensive wine right and that is through the roof right now again talking about the barbell experiential thing like totally

people that are drinking things that no one else can really afford

that's gone like 3x 4x of the past 5 years. It really has. And you know, younger people are not drinking cocktails and they don't want mocktails because mocktails are actually way more difficult to make than a regular cocktail with alcohol in it. But nobody wants to drink it for the same or more.

Why is it Why is it more Why is it more difficult just to actually deliver something?

Imagine if we were making the alcohol too.

Yeah.

From scratch. That's hard to do. That's And that, you know, a normal restaurant ratio was 70 to 30%. For the most part, you want 70% food. I mean, this is not the I like

roughly

roughly 70% food to 30% bev sales. And I think that is completely shifted. And for a good restaurant

Yeah. I mean, like if you want 10% of your, you know, profit, for example, right? Like

something's going to give when you're down like 18% on dev sales,

you know? I think that's the average right now or something like that. 15 18%. Um, so I don't have an answer. Uh, food needs to get more expensive. I've been saying that for a long time,

but that comes across as terrible when people read that as a pull quote.

Um,

yeah.

Um, because it's already expensive. So, I don't know what the answers are. I will tell you that like, you know, it's one of the reasons why I invested in Athletic Brewing

uh in in uh 2019

u because I saw the data within our own restaurants. it was slowly going down year after year just a little bit like half a percent 1%.

But you know I and I'm I think that's what we can do is sort of figure out what the alternatives are. I don't have the answer.

But isn't one of isn't one of the challenges is like these non-alc products like somebody's not like there's not the incentive to have the second or third. Like I I feel like a lot of this stuff people just have one they they get a little bit of the taste but they're not getting like a real they're not like getting they're not

they're they're just like not getting drunk, right? So they're not going Are you guys drinking as much as they used to?

Absolutely not. [laughter]

No.

You know, I feel like the way I used to was like Don Draper and Madman the amount I used to drink.

Yes. You know, and I, you know, part of that is just a generational shift, but I I can assure you if you talk to people under a certain age group, the younger Gen Z, they think of drinking like it's smoking cigarettes.

Oh, yeah.

It's just not something they want. I I've seen this in kitchens. Like,

you finished your 12, 14 hour day. All you wanted was that cold beer at the end of your shift.

And now they don't want that.

And I just don't I'm just like, what is happening? You know, and I'm not saying they're wrong. It's just so that we're sort of dinosaurs, but interpretation like the data didn't change but it was contextualized through podcasts and there's a lot of health data out there. Uh I I you could maybe call a little bit of the Huberman effect but there's a whole bunch of there's a long lineage of folks who have been like actually ringing the alarm bells on the health consequences of of drinking alcohol even in small amounts. And so that's I feel like that's what's really cascaded.

Yeah. Maybe what we should do restaurants should start a lobbyist and just muzzle hover and [laughter] we'll be okay. Yeah. Yeah. Live life. Uh

yeah. I mean like the the dual pressure right now from from uh like just labor costs on one side and then and then uh just like declining alcohol sales. Like it's just creating I mean I've seen some uh the place we go for breakfast adds like 4% on top of every bill for for benefits. I'm I'm sure that that's helpful. But like it's a very real cost, right? It's now 25% between effectively for or 24% for service.

Uh

at the end of the day, food needs to be more expensive and and I'm not it it just sort of has to and it can't be sort of be passed down. I think I I've been talking about this for many many years. I don't know why, but people have a real allergic reaction when it talks what to raising prices. For example, I think you know it's good. I I I'm pro when a restaurant jacks up their prices to like I'm hoping we see a restaurant where the the the the ability to eat there is basically like going to a Taylor Swift conference a secondary secondary market.

Yeah.

You know,

like that's sort of what has to happen. And I I do believe there's going to be innovation. And again, the problem with the restaurant industry as a whole to sort of um mitigating this decline in beverage sales is that we are too slow and proddding to to try new things out to um embrace new technologies. And as my sort of spiel and joke about this as a whole, we're so goddamn allergic and slow to changing things, we still are using the metric uh imperial system instead of the metric system.

Mhm.

I mean, that's so dumb. The metric system is scientifically proven to be more accurate and more effective. Why are we still using ounces, pounds? It's so dumb.

America, baby. It's because we're Americans. We do things the dumb way sometimes.

Americans [laughter] can still do it. But as an industry,

Yeah, I know. As restaurant leaders, we can just use the metric system.

You just use metric. But

and again, you know that it's bad when drug dealers use the metric system.

But drug dealers use the metric system. That's [laughter] right.

What the hell are we doing here?

So, if we can't adopt the metric system as an industry, what what are we doing here?

Yeah. Yeah. Yeah. What a mess. What a mess.

Last question. We've got a bunch of people in the chat have asked, who do you think is going to win the AI race? Hot take.

What? [laughter] Really? Okay. We had to ask. This is a tech. We This is a tech show. Just give me your gut gut answer. First reaction. One word. One word.

Google Anthropic. Open AI. Who you got?

Commodore computers.

There we go. Commodore [laughter]

coming at you.

Dark horse in the race. Love it. Uh thank you, sir.

Great, great hanging. Um

well, we'll see you guys at F1.

Yeah, we'll be very excited to see you there. Can't wait. Have a great one. We'll talk. Be good. You're the man.

Have a great rest of your day. Uh, let me tell you about graphite.dev. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality