For the past six years, Ahmass Fakahany, a former co-president of Merrill Lynch, has been working with one of New York City’s hottest chefs, Michael White, to build the Altamarea Group.
Fakahany met White when he was a customer at his restaurants, including the award-winning Italian seafood restaurant Marea. They started working together in 2009 and founded Altamarea, which means “high tide” in Italian, in 2010. They now have a total of 17 restaurants in New York and its suburbs, in Washington, D.C., Hong Kong, Istanbul and London.
Fakahany, who, with White, won NRN sister publication Restaurant Hospitality’s Richard Melman Award earlier this year, discussed his approach to restaurants, and shortcomings he sees in the foodservice business, with NRN.
Why did you decide to get into the restaurant business?
I personally have always had a very strong affinity and interest in food and beverage. I didn’t go into [foodservice] for many reasons, but I’ve always had a serious passion for it. I don’t know how you can be in this business if you don’t love spending hours developing menus and looking at the font and tasting and thinking and making people happy and having that hospitality gene.
I had a magnificent 20-year career at Merrill Lynch, [but] I manage my life in chapters and I wanted to do something else. I decided to reinvent myself and take a chance.
We started with the high end and got recognition with Marea and Ai Fiori [both in New York City]. The high end I think gives you a lot of credibility if you get it right.
But from there that gave us the confidence to start creating other [upscale] concepts that are also fun, accessible and have quality. That’s like Ristorante Morini [an upscale Italian restaurant] and Costata [an Italian steakhouse]. And then we also created more casual Osteria Morini and Nicoletta’s [a pizzeria], which are more mass-access, $20-a person restaurants.
How has your financial background helped you?
There are so many aspects that are important to getting a business right that the client [customer] doesn’t see. Not only is it the capitalization. It is the real estate transactions, the ability to leverage your purchasing power. The clients will not pay more, nor should they, but your job is to be more efficient in the back so that they get the benefit of it.
So they feel that they’re getting value and you make profit.
That’s the win-win that you need to try to reach for. It’s hard, but, for example, if Grey Goose is the No. 1 selling vodka in our restaurant group, and No. 2 and No. 3, then why don’t we start thinking more in terms of Grey Goose overall? Because as long as you [as a customer] see that lovely bottle with the geese on it being poured at the bar, you’re fine. I need to get smarter about how it’s delivered, how it’s purchased and how it’s handled for the group. And we have the IQ to do that.
So you figure out what kind of relationship you can have with Grey Goose as more of a partner than a customer, perhaps.
We model for each bottle how many drinks we should sell and how fast does the inventory go down, so we know exactly when to order and how much to order for the group. And then Grey Goose says “Great. Now we can manage our daily sales better because we know what Altamarea will buy.” [And that allows us to get a better price].
As long as you walk in and that bottle’s on the shelf and looks ready and we don’t run out of it, it’s a win-win. And I know that once a cocktail’s more than $12, $13, $14, it starts to hurt. The market’s pretty clear on what will turn people off. So we have to be a bit more thoughtful about how we look at the apparatus in the back.
Not everyone does that, by the way.
You have three locations of Osteria Morini. One in New York City, one in Washington, D.C., and one in Bernardsville, N.J. How are they different from each other?
Osteria Morini is a wonderful neighborhood brand. You can go there frequently. You can have sliced meats, some small plates, a pasta, you can share some main courses. It’s bustling and it’s friendly and it’s very much a place you can go to [for special occasions], but it also very much fits into the community it’s in. So, for example, at Osteria Morini SoHo [in New York], our walk-in traffic is probably 35-40 percent, which means you can be impulsive when you go [instead of making a reservation]. We’ve created enough room so you can get in, and we’ve created that mojo that is a fun aspect. That also works in Bernardsville and DC. But in each location it is not exactly the same. In the case of DC, it has a broader steak section and a couple of things that fit for that location. In New Jersey we have a few more fish options.
What are the unit economics of those restaurants?
It depends on the location. Osteria Morini in SoHo, the flagship, is about a 95 seater with no outside seating. It’s buzzy and tight; the seats are very close together. In New Jersey it has a bigger bar, maybe a little less hectic, a little more room. In DC it’s in the Capitol Riverfront, the new development area. We have about 70 seats of outside seating and we also have a private room inside.
Are the average per person checks about the same?
New York has the highest one. It might average around $65-$67. In DC it would be more $47, $48, $50-ish because it’s a very different happy-hour crowd. The restaurant is right near the Department of Transportation and Navy and so forth, and a lot of those people leave work at exactly 5 o’clock and have a couple quick things [to eat and drink], and that could be $15, $16. I also believe that DC has a ceiling on pricing and you have to fit in it. You can’t charge New York prices. You have to charge what’s right for the location. Bernardsville is close to New York [in terms of check average] but a little bit less.
And our portion size in New Jersey is larger than New York. People like to take things home more. When they see scale on the plate it pleases them more.
And I think New Yorkers also like to order many dishes that they can all share at the table, whereas in these other areas they might like to have a starter and main course for themselves and maybe one thing in the middle that might be shared.
Michael White is a partner in the company. What is his role as chef?
Michael is the culinary creator and developer. Under Michael we have four or five very strong pillars [who oversee multiple restaurants] and then chefs de cuisine [at each restaurant].
Hiring and retaining staff
How do the area chefs and chefs de cuisine work together?
It’s very collaborative. Altamarea is a communications machine. We’re always talking and sharing information. We CC each other on e-mails. It’s a culture of fluidity and dialog. So maybe the chef de cuisine in DC cannot see that a dish in New York is a rave, and we should do it in Washington. One guy should have an overarching view of the menu and the chef de cuisine not only has to execute but have a say as a local leader.
So the chef de cuisine can say, for example, that in in Bernardsville they don’t like branzino.
Yes. Although they do like branzino in Bernardsville, but we don’t have salmon on our menu in SoHo because you can get salmon 100 places and people might not think it’s as special. But we have it at Bernardsville because the guests want it and ask for it. And we also give them the branzino.
What’s your approach to hiring and retaining staff?
I think the people have good energy and motivation at Altamarea. Our retention is very high, which is good for you [as a customer] because they recognize you and get to know what you like.
And it’s good for you because it’s expensive to train new staff.
Exactly right. And so we rotate our people a lot, but we don’t change their salaries. They can work at a top [fine-dining] restaurant or a pizzeria or osteria, but we don’t [lower their pay]. So people are encouraged to move because they’re going to be learning.
And they have a better understanding of the company.
Right. They understand our brands and they can start to have that ownership mentality, which is so important, because they’ve been in different places. And if they’re treated fairly, they give back to you. And this is a business, by the way, where human capital is not treated well. People leave for $1,000 more pay.
But I think we’ve created a calm in the company, and I think that consistency is starting to pay us back. There’s a dialog around reasonableness and sustainability of the individual in their career. I think this business is very short on that, and I think that gives Altamarea an opportunity. We promote almost exclusively from within. Everyone leaves eventually, but at least it shouldn’t be because we didn’t create opportunity.
Contact Bret Thorn at [email protected].
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