SoDel’s Kammerer says pandemic reinforces fragility of life, business

Scott Kammerer is president of SoDel Concepts, which owns 12 coastal restaurants from Lewes to Fenwick Island and beyond plus a number of other related businesses and a charitable nonprofit foundation called SoDel Cares. He was recently named to Nation’s Restaurant News’ 2020 list of the most influential leader in the restaurant industry. He is also the chairman of the Delaware Restaurant Association and the recipient of such awards including the Marvin S. Gilman Superstar in Business Award, presented by the Delaware State Chamber of Commerce.

SoDel is guided by three core principles. It believes in “cooking beautiful, simple food; developing the people we work with, and making the world a better place,” a philosophy that Scott discusses in this interview. It has been edited for length and clarity and was conducted by Editor Peter Osborne.

The National Restaurant Association thinks that a third of us won’t survive. But I think we have a small and close-knit community of 3,000 independent restaurants in Delaware, and that could work in our favor. We have a good connection to our customer base, and we have received a lot of support from the community.

Half of restaurants close within five years of opening. Restaurants are a labor of love; it’s part of who you are. Sometimes people just decide they don’t want to do it anymore. The biggest reason for an established restaurant closing is that their concepts are outdated, but this particular challenge is tremendous. It saps your energy. The deciding factor will be what you can withstand, what’s your appetite for continuing. The time period for reopening will drive the decisions and how much work restaurants have to do to modify their controls and make sure both customers and staff are safe.

The restaurant business is unusual because of the variable costs – it’s a cash-flow business with razor-thin margins. It’s tricky to manage through. At SoDel, we’re a collection of small businesses – 15 to 18 small businesses that we manage under one umbrella, which makes us nimble and able to pivot.

When the shutdown started, the NRA recommended layoffs so that’s what we did at SoDel Concepts. But we started hiring back immediately – 75% within two weeks – and brought back about 95% of our salaried managers.  Just about everyone else was given the chance to come back at some point. Some decided not to for personal reasons.

We had 750 people working the day before the shutdown. Today we’re in the 650 range. At this time of year, we’re supposed to be ramping up to 1,000 and by summer we normally have 2,000 – We have one restaurant that did 300 takeout orders in a day recently so we needed a full staff. We did 60 covers last night at a different restaurant. We still need cooks, chefs, servers. People are ordering beer, so we need bartenders. We’re doing it in short shifts. Our marketing department had to stay active as did HR, corporate chefs and our directors of operations.

You can say we’re shut down, but we’re really not. Carryout is a lot of work; restaurants typically flex up and down on a regular basis during the week. We have a lot of part-timers. A lot of teachers – 35 last year – during the summer. A lot of single moms, a lot of students getting their Master’s. We hire a lot of nursing students. We have so many alumni that now work at Beebe Healthcare that we had a fundraiser where we donated 100% of the proceeds to Beebe for personal protective equipment.

I see challenges as opportunities. The 2008 financial crisis was actually a good opportunity for us. I think a lot of restaurants in Delaware will make changes because of the pandemic in the long run. They’ll keep carryout in place and be more stringent on health protocols.

We all report to about 27 different government agencies and that relationship is only going to get stronger. We have our own internal health inspector department, which will continue to get stronger.

I think we’ll probably switch to a more hybrid model with a combination of dining room and carryout. We used to do 2% carryout; in the future it will be more like 10%.

A certain percentage of diners may never go back, but restaurants are counterpunchers. Twenty years ago, there were no-gluten free menus. Now we ask more about allergies. Restaurants serve guests and guests ask for things. You won’t see the changes right away because it takes a while to build a consensus – 10 years ago everyone had plastics straws and now nearly no small restaurant uses them. You can’t jump the gun and overreact; but we’ll all slowly adapt.

Our elected officials are doing the best they can in developing restaurant-specific plans. We have open lines of communication. It’s a balancing act and you have to thread the needle. We’ve all made a commitment to follow the guidelines, and we’re encouraging everyone to do the best they can in a challenging situation.

People want to feel safe and secure. There is a great amount of trust between restaurants and guests in good times and bad. One of the best things that came out of 9/11 was that people came to restaurants – to feel a sense of togetherness, and I believe that.

I think a phased approach is right. It takes a while – two to four weeks – to gear back up. We’re two or three phone calls away from being able to be up and fully running with food and supplies. We are a family business, but we’re also highly organized and structured with a chain of command and layers. Some small restaurants don’t have that kind of support, so it will be an enormous challenge for them

There will be very strict guidelines in Phase 1 – tables will be 8 feet apart and we’ll only take reservations. When we get to Phase 3, there won’t be any restrictions but there may be adjustments. For example, I think you’ll only see paper menus.

Down here at the beach, there are a lot of interconnected restaurants, a lot of mentoring and movement between restaurants, a lot of friendships and former working relationships. All this has brought people closer together; I’m seeing a lot more camaraderie within the industry here, that is a great thing.

Thompson Island Brewing Company opened in November, so the closure put us in a unique position. When the governor amended his order to allow restaurants to sell alcohol to-go, we started selling Thompson Island beer at every restaurant and sales went up because we primarily only sold our brand. We’ll keep that going after this is over and keep our distribution network going.

The best lesson I’ve taken from this is something I’ve always focused on. Business is very fragile, and life is fragile. Remember not to take anything for granted. I’ve always been good at planning and we had a well-thought-out plan for something like this. People inside the company laughed at me. But we were ready to execute when it happened.

Back in 2009 there was a pandemic and the insurance company came to us and said they’ll no longer be covering us for a pandemic. We needed to come up with a plan. Delaware did an amendment that allowed companies to carve out a pandemic clause (a rider with an additional premium). Before swine flu, it was covered but with the change it cost $3,000 per year per restaurant. Almost every restaurant just declined that additional coverage.

We have crisis plans in place, a good blueprint, that we enacted. Right now, we’re doing about 50% of our normal volume for this time of year. When we get to Phase 1, we’ll be at about 60% and Phase 2 will be about 75%. But I don’t think we’ll be back to 100% capacity until next Memorial Day.

The most important thing for our company is to stick to our core principles. You can change the forks or what you serve, but it’s comforting in times of crisis to have core principles that can guide you through the crisis. If you are not sure about something, you can ask yourself, does this fit with who I am? With what our company stands for? And that makes decision-making a lot easier.

Giving back is a meaningful part of what we do. When times are really bad, it gives people a glimmer of hope when you give back.

This is a good challenge for me, to guide this company through this. I’m not afraid of anything and I won’t back down.