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Urbanspace Vanderbilt is one of many food halls in New York City that have become foodie destinations.

Food hall evolution

Still growing like crazy, they’re taking shape with different formats

The momentum of the food hall phenomenon appears unstoppable, even as the concept struggles through some growing pains.

The rush to develop new halls in markets around the country has led to some miscues. TV chef and adventurer Anthony Bourdain, for example, recently pulled out of a massive, high-profile project in New York, and other halls have reportedly turned out to be challenging for the vendors financially, despite the promise of low start-up costs.

The food hall concept is evolving in different directions, however.

Related story: Something different in food halls: Galley Group

Some are run by a single owner and operator, in the style of Eataly, the Italian-themed retail-restaurant conglomeration. The format gives restaurateurs more creative control over the space, with room for partnerships with potential outside retailers.

Others serve as collective spaces for multiple foodservice operators, with a focus on careful vetting and nurturing of the concepts they bring in to ensure mutual success.

Food halls by a single owner/operator

Among the newest restaurateur/developer concepts is Lincoln South Food Hall in Bellevue, Wash., led by veteran Las Vegas restaurant developer Jeffrey Frederick, founder of Elite Brand Hospitality Group.

Lincoln South, led by Jeffrey Frederick, a veteran Vegas restaurant developer, will open soon. (Renderings here and below: Lincoln South)

The location, which was expected to open in early 2018, includes several unique restaurants developed by Frederick and his culinary team, in partnership with local investors Ascend Hospitality Group. Having control over all of the concepts, Frederick said, will help him build a significant presence in the market, where he did not yet have any operations.

“I think in other environments, I might take a different approach, but in this particular case in Bellevue, we needed a certain amount of mass,” he said. “We wanted to be ambitious in our project, and in studying the market, we felt like there was a need for the restaurants that we’re bringing in there.”

He developed the concepts — which include pizza, tacos, bao, sandwiches, burgers and poke — so that each would offer a distinct eating experience, which is an essential element of the food hall experience.

“Some might look at it as too ambitious, but I look at it as being in my wheelhouse to bring a number of unique and different style restaurants because of my background,” he said.

Frederick’s background includes working on some of Las Vegas’ top restaurants, including Nobu and Mr Chow, and other work with several Michelin-starred chefs. He’s partnering with locally based Ascend Hospitality Group on the Bellevue project.

Having control over the design of the facility is another advantage Frederick sees in overseeing the whole operation.

“Design’s important to me, and I wanted to bring a unique look and feel,” he said. “Not all food halls are that way. Some food halls are very vanilla and very simple. But the ones that I have enjoyed the most in my foreign travel are the restaurants that had something interesting about the building from an ambiance standpoint.”

In order to achieve an interesting ambience at Lincoln South, Frederick said he brought in three local artists “and let them be inspired by the cuisine that was offered.”

Working with multiple operators

Food Hall operators who bring multiple outside foodservice vendors into their operations said it’s important to work with them closely to ensure that they succeed.

Lisa Brefere, CEO of consulting firm Gigachef and partner in Pythian Market, a new food hall opening in New Orleans, said it’s important for food hall operators to be transparent with their foodservice vendors about all potential costs at the outset. Brefere, a chef by training, had consulted with a foodservice operator at the Ganesvoort Market food hall in New York before joining the Pythian team.

She said her experience has helped her work through potential issues with Pythian Market’s operators as the facility prepares to open.

“I don’t want to just sign leases,” she said. “That doesn’t do anything for us. We want to make sure they feel really comfortable when they put their signature on that paper. We’ve probably lost a few because of that, and I’m OK with that.”

Pythian is also structuring its financial model so that operators only pay a percentage of their revenues on top of their base rent once they reach a certain sales threshold, according to Amy Chan, general manager of the market.

Pythian Market is scheduled to open soon in New Orleans. (Images: GigaChef)

“Our idea is that their success is our success,” she said.

Justin Anderson, director of hospitality development at Zeppelin Places, which is opening the Zeppelin Station food hall in Denver, said one of the things he’s learned is to make the operation as simple and transparent as possible for the vendors by bundling all the shared costs together in a single monthly bill.

“We think that fully allows the independent vendors to concentrate on the most important thing, and that’s delivering great hospitality, and concentrate on cooking the food and executing at a high level,” said Anderson.

One of the challenges operators have faced in food halls, according to reports, has been surprise fees for services such as dishwashers and wi-fi access.

For Denver’s Zeppelin Station food hall, making operations simple and transparent is a critical component. For instance, all of a vendor’s shared costs are bundled into a single monthly bill. (Renderings: Zeppelin Station)

Anderson said Zeppelin Station is taking a hands-on approach with its operators to help ensure that they will be successful. He also said operators need to have a “communal mindset” when they come into a food hall environment, since so many things are shared.

“They have to remember there are thousands of people a week coming in that are looking for an experience,” said Anderson. “We have to make sure that we’re choosing the right people. It isn’t just building a market hall with 40 different stalls in it, and saying let’s just hope for the best.”

Jared Leonard, founder and CEO of the Stone Soup Collective, a Chicago-based restaurant group, opened a concept in Chicago’s Revival Food Hall — where Anderson previously worked — and is expanding to Zeppelin Station.

He said the experience at Revival Food Hall “has been great.”

“I think like anything in life, it doesn't come without its challenges, but for a good operator that has a good brand and a clear idea of what running a food service business is, food halls are really a perfect setup,” said Leonard.

He said the collective maintenance and other fees make it very simple to operate in food halls, even though it may translate to a higher rent per square foot than a brick-and-mortar restaurant.

Urbanspace Vanderbilt operators are planning another food hall in New York this year. The company has two permanent markets as well as pop ups in the city. (Photo: Brian Tisza)

“Your numbers are much easier to understand, because you don’t have as many unknowns,” said Leonard. “You don’t pay for a leaky roof, or a broken air conditioner, or to fix the toilets. We like the idea of sharing those resources and the expense of those resources with other operators. It gives us a chance to focus on what we do best, which is providing good service and making good food.”

In Revival Food Hall, Leonard opened what has become one of that venue’s most successful operations, a chicken-sandwich concept called Budlong Hot Chicken. In Zeppelin Station, he’s opening a new concept called Au Feu, which will focus on Montreal-style smoked meats and other specialties of that region.

Leonard said the food hall environment allows him to focus on providing a high-quality product.

“We use all top-notch, high end ingredients, and everything is fresh.” He said. “We don’t have freezers. We follow the same approach as a fine-dining restaurant, but we do it in a fast-casual setting.”

Leonard said he’s found food halls to be a low-risk option that have made it easy to expand his brand.

“When we open up brick-and-mortar stores, we probably look at 10 before one of them makes sense,” he said. “We haven’t said ‘no’ to a food hall, because the numbers and the risks really make sense.”

Zach Friedlander, managing partner at Aloha Poke Co., which is also opening at Zeppelin Station, opened his first Aloha Poke restaurant inside a 150-square-foot space in Chicago’s French Market, which offers a mix of specialty retail and grab-and-go foodservice.

“Our concept was actually really tailored around being in a food hall,” he said. “Instead of us creating a concept and then figuring out how to simplify it for scale, we created a simplified, scalable concept from the get-go.”

One of the key concerns several food hall operators and restaurateurs cited was storage. Friedlander said he only had enough cold and dry storage space at one early food hall location for about 70 percent of each day’s needs.

“Then I would actually go to my car, run to the market, and grab enough produce for the end of the day,” he explained. “It really trained us to keep things as tight as possible from the get go.”

Dry storage is also important to consider, Friedlander said. He had to change the bowls he was using because they came in a 600-count box, and he simply did not have the space to store them. He switched to a bowl that came in a 200-count box instead, he said.

“That’s one of the biggest differences with some of the newer food halls versus the older ones,” said Friedlander. “The newer ones are starting to offer a little bit more space, with communal prep areas and storage.”

The confined space in a food hall stall also forces operators to make sure their systems and processes are as efficient as possible.

Leonard of Budlong Hot Chicken said he cross-trained all his workers in the food hall location in Revival Hall to perform all of the jobs, so that he doesn’t have to have a specialized cashier on hand who can’t help out making sandwiches, or a cook who can’t work the POS system.

It also helps to have a highly streamlined menu and presentation, said Leonard.

“You want to be sure that you do the things you’re doing very well,” he said. “I’ve seen some operators in food halls make the mistake of trying to do too much, with too many different prep items, and even too many little things, like garnishes. You don’t have a lot of space to produce your food, so you have to know what you’re good at and do those things well, and do them quickly.”

It’s critical to have the operation running as efficiently as possible because, operators note, the competition is only a few steps away at the neighboring stall, and customers can see right away if the line next door is moving faster.

Workers also have to be cognizant of the fact that they are working in view of an audience at all times — something back-of-the-house employees might not be used to — because customers may notice unprofessional behavior and opt for the stall that appears to have its act together instead, Leonard said.

“You’ve got to be as good or better than the next guy,” he said.

Ask the right questions

Brefere of Pythian Market said it’s important for operators ask as many questions as possible before they go into a food hall.

“You have to ask all the critical questions,” she said. “Who’s cleaning the grease trap? Who’s cleaning the bathrooms? Who’s cleaning the seating area? What about the utilities? What if the equipment breaks in the kitchen? Ask those questions.”

In addition, she said, operators should make sure all these expenses are documented. Any additional expenses that arise would need to be approved collectively by the group of operators.

Aaron Allen, an Orlando, Fla.-based restaurant consultant who has worked with both domestic and international food halls, said that while there are some challenges for operators that are unique to the food hall environment, many of the challenges are are similar to traditional restaurant operations in terms of calculating costs accurately.

“When you get a bunch of operators together and from different backgrounds and you ask them to work together in harmony, you can get can get some feelings of unfairness, just like if you had 30 parents at a PTA meeting,” Allen said.

Some of the problems related to fairness that can arise are similar to those in mall food courts, he said — arguing over visibility, for example, or excessive sampling.

Overall, Allen said he sees the food hall environment as a positive for operators, especially those with a niche concept.

“You cannot create a 5,000- or 10,000 –square-foot restaurant with a little artisan cheese shop, for example,” he said. “But there’s an interest in it from the consumer side, and a market for it, so the food hall works well for the cheese shop, for the consumer and for the landlord that’s put in the capital cost of building it out for everybody.”

Operators should be conscious of many of the same variables they must consider when entering a food court, he said, such as differentiation from other concepts in the space, and understanding how shared expenses are allocated.

“Signage, menu mix, staffing — all those things are really important,” said Allen. “It’s just a matter of right-sizing it for this different operating model.”

For operators with a strong product but little experience, food halls present a low-cost entryway to operating a business, while for more experience operators a food hall venue can serve like a marketing vehicle to showcase certain products.

“Part of what we would advise our clients to understand is who else is going in, because that’s part of what creates the draw,” said Allen. “You are one of the musical acts in a whole lineup. If we are artists trying to build a name for ourselves, we want to know who else is performing at the concert, what kind of people are going to be performing at the concert, and who are they trying to attract and appeal to.”

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