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Trimming the fat By Michal Palti Tags: israel news "A rise in the anxiety level" is how restaurateur Yoram Yarzin describes the mood of restaurant owners and chefs in recent months, following the bleak forecasts of an economic downturn that will occur in Israel as well. "There is a lot of hysteria, and that of course influences public behavior. This week clients came into Cafe Italia in the evening and were amazed that the place was full and asked in wonderment whether they should have made a reservation. According to what they read in the newspaper, one could think people are going back to a barter economy." Yarzin and his brother Ari are the proprietors of a string of restaurants: Moses, Ad Ha'etzem, two Tony Vespa pizzerias, the Shnitzerya and Zozobra, and this year opened Cafe Italia on the spot where Chimichanga stood not long ago. The price of meals at his restaurants is considered average in the industry and mostly targets a young clientele, whom Yarzin defines as "earning NIS 7,000 a month but also spending nearly all of it on going out and is therefore the most rewarding clientele." The exception among his restaurants is Cafe Italia, targeting a clientele aged 35 and older. "In my experience, in a recession there is a decline in occupancy of 10 to 20 percent, not 50 percent," says Yarzin. "You have to know how to cope with this, but also to see the potential good - the good and reliable restaurants will grow stronger and the less good will be hurt. The young clientele will look more closely the deals that a restaurant offers: At Moses, for example, we are starting a 'night deal' from midnight, and the clientele that arrives a quarter of an hour earlier waits for this deal outside and then comes in and sits down to eat. When we opened Cafe Italia, we looked for employees for a long time and we didn't find any, because there was a large demand in the field. Perhaps now it will be possible to get better employees more easily." Advertisement Yarzin is feeling pretty confident. He runs places where the meal is not very expensive and therefore the clientele, as he puts it, "is less worried about the future." Other restaurateurs have pulled out emergency plans for the coming moths, when a lack of economic clarity is expected to prevail. The income and expenditure model for restaurants in Israel does not leave a whole lot of room for cuts: The turnover of a successful chef's restaurant in which there are 70 to 100 seats is NIS 1 million monthly. The profit margin that remains for the partners is usually 15 percent of the turnover. This is after deducting wages, raw materials including alcohol (which buyers say take a bite of 45 percent of the turnover) and rent. The remaining 15 percent or so is divided up among the partners (usually three or four people in addition to the chef), and during the early years, it is usually necessary to deduct payment of an investment loan, which may eat up a third of the profit. So that 10 percent (about NIS 100,000) at a successful restaurant has to feed several partners. One man who is prepared for a downturn is Rafi Cohen, the owner of Raphael in Tel Aviv, which employs 140 workers. "I've already been through a recession and the hard times of terror attacks, so I have plans of action," he says. "There are means I have adopted from the hotel industry. In accordance with a certain occupancy percentage of diners, I employ a certain number of workers. If there is a decline in diners, to my regret, staff is cut. In addition, all of the raises, prizes, joint outings and bonuses are frozen. "During this period we coddle our regular clientele, says Cohen. "I invest in what the regular clientele likes, such as particularly popular dishes. I try to be in complete control of the expenditures. With me, nothing gets ordered without three bids. Another way is closing yearly deals with suppliers in order to lower prices. I hope that this will suffice for us. All means are legitimate to my mind, because the restaurant is important, and I will do everything for it to exist, even if I have to take couscous and fish stands out to the street." Restaurateur Eyal Lavie, the chef and a partner at Rokach 73 in Tel Aviv, who used to run the veteran Pastis on Rothschild Boulevard there, has developed "an expertise in recession," he says. He has owned a restaurant in two tough times, during the terror attacks of the second intifada and when the high-tech bubble burst. "I expect that during a recession the cafes will flourish and the expensive restaurants will be hit and will have to take measures," he says. "My partners are business people and they predicted back in April of this year there would be a dicey situation, and we have already begun to prepare. Unlike other restaurateurs, I, in fact, increase advertising and public relations. Other restaurateurs cut this area immediately. To my mind, that's a mistake, because you have to stand out as a restaurateur. "The next stage is work with the suppliers: Every restaurant has 'fat' in this area. You sit with the supplier, and you tell him that we need to get through this period together, that it is the interest of both sides to survive, and you try to bring prices down. The next step, which I hope we won't get to, is cutting back the menu - building a menu at a middling price that enables people to go out and get more varied and comprehensive value for their money, a menu of several smaller dishes at a lower price, for example. The step after that is saving on manpower, although I never fire professional manpower, even during the most difficult times. It happened to us at Pastis that we gave up, for example, the services of a dishwasher, and we took turns at the sink, so as not to cut down on cooks, and this is what we will do this time, too." Katit, in which chef Meir Adoni is a partner, has in recent years been considered one of the most expensive places in the central region, perhaps even the most expensive. According to Adoni, he and his partners have met and discussed cutbacks. "There are no surprises here. According to a restaurant's business model it is possible to cut manpower and raw materials," he says. "Every chef, especially at prestigious restaurants, knows there are raw materials with which he indulges himself and will have to cut down if he wants to serve a menu that is priced lower: smaller cuts of meat, fewer porcini mushrooms, which you used to scatter generously over a serving. We have come out with a menu that offers seven smaller but satisfying courses for NIS 195 per person. This menu also makes it possible for a young clientele to come in, not every day, but to mark a special occasion. "As in every crisis," adds Adoni, "there is a class of diners that carries on with its life. These aren't people who are going to stop closing deals or eating [out] on a large budget. We also aim at them." Restaurateurs who are trying to run elite restaurants outside of Tel Aviv stress that their potential for making cuts are more limited. There the recession will have an effect in different ways such as stopping planned expansion. Chef Ran Rosh, for example, the proprietor and chef of Hanamal 24 in the Haifa port, stresses that a priori his pricing is a bit lower than in the central region, even though he works "with the same suppliers in Tel Aviv." Rosh says: "Our restaurant is from the outset more expensive than what is common in this area. I can't lower a price and replace a menu, because then I have no right to exist - my uniqueness is damaged. You need a lot of oxygen and a deep pocket, and to keep money aside for hard times. We are trying to make things interesting for our customers, to invite guest chefs to cook here, to create interest in the menu. A certain change that we are making at the moment is that we are halting our expansion plans. We had wanted to open a small, non-kosher events hall adjacent to the restaurant, because we get asked very often to hold events and we can't do them. This is a product that is lacking in Haifa and the north, but we are halting the plans for the moment and waiting." A restaurant that in the seven months of its existence has established a special standing is chef Aryeh Bar Kana's Baba Yaga on Hayarkon Street in Tel Aviv, a French restaurant with Slavic influences. It is a small place (it seats only 50) and is based on a wealthy target clientele of monied tourists and locals of Russian origin. Bar Kana relates to preparing for a recession as though preparing for battle: "We are trying to put together different groups of target clienteles, so we will always have backup. Now, of example, there is an inundation of a Russian target clientele that is coming to Israel because the holiday season is beginning, and there are already lots of reservations. The local clientele is influenced by the local press and is therefore coming in less. Recently we managed to get into a guidebook in Japanese, and we are seeing results. Especially as businessmen from Russia will always love to eat well. They won't give up on a business meal and dining out for dinner, and this is what we are offering them." Bar Kana says they won't change the menu. "The menu is our agenda, because we are considered an elite restaurant. We can't remove the entrecote and the fillet from it and serve Nile perch, but we will cut what is possible. If there are quieter periods, it will be possible to combine jobs: One person will be responsible for the 'cold line' in the kitchen and when he is done, he will also be able to answer the phone. This isn't ideal, but this is also a way to reduce expenses." All of the restaurateurs agree that a period of recession in the restaurant industry brings to the fore new forces in the field: The flourishing of cafes in Israel reached its peak during the bursting of the high-tech bubble in 2000, when diners wanted to go out and eat cheaply. The coming months will see a wider variety of tempting offers from the restaurateurs who want to keep their profits up. Restaurants will call attention to themselves in various ways, such as celebrating the anniversary of an opening. Moreover, just over three months from now elections will be held here. Politicians and their advisers will not be meeting in crowded restaurants. The private rooms at fancy restaurants will be a more suitable venue. Bookmark to del.icio.us   Young Republicans Poll: Young U.S. Jews are more likely than their elders to vote GOP. Designing an icon Ten years ago, two students asked Israeli Ruth Kedar to design their new company's logo.

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