Sonoma County restaurants still struggling in 2021

Fourth Street Social was supposed to be restaurateur Melissa Matteson's dream project.

She got the keys to the small downtown Santa Rosa lounge and cafe in February 2020, documenting the weeks of redecorating and grand-opening preparations on Instagram. Tables were set, bottles of wine bubbly purchased, and the menu prepped for its grand opening on St. Patrick's Day on March 17.

On March 18, Sonoma County residents were ordered to shelter in place and nothing has gone according to Matteson’s carefully laid plans since.

"Making a to-go menu was our grand opening in 2020," said Matteson, "and we still haven't gotten a real opening."

Nineteen months into the pandemic, many Sonoma County's restaurateurs say 2021 has been far worse than 2020, and the future looks even grimmer.

That may come as a surprise to diners who flocked back to restaurants in droves in the first half of 2021, hoping to support the hard-hit industry. According to the National Restaurant Association, food and beverage sales in the restaurant industry are projected to reach $789 billion in 2021, up nearly 20 percent since 2020.

But it's been a mixed blessing as restaurants struggle to meet demand.

Ongoing food shortages and supply issues have led to skyrocketing prices on everything from meat and vegetables to packaging and paper products. Labor shortages have resulted in restaurants closing, despite unprecedented demand from restaurant-goers.

Paycheck protection loans and the U.S. Small Business Administration's $28.6 billion Restaurant Revitalization funds are tapped out and small restaurant owners are running on mental and emotional fumes as the traditional sit-down restaurant model crumbles.

"We have our heads about water-ish," said Matteson. She and one server are handling the 35-person restaurant with a single chef doing all the cooking.

"I'm the server, host, bartender, janitor and everything else," she said.

People applying for jobs at the restaurant have often never worked in a restaurant before, Matteson added, saying she lacks the time or energy to train them.

"We're a new restaurant, and it's my reputation on the line, and if we drop the ball, well, you never get that customer back," she said.

Matteson has been lucky in one sense, however. Restaurants rarely make a profit the first year, and she planned for that.

"I'm not doing this for the money. I'm doing it for the passion," she said.

That doesn't mean she can afford to wait around for things to get better. Instead, she's doing everything to keep the doors open, including renting out the space for small private parties and hosting a Halloween prix fixe dinner.

"This is what we're working with," she said. "We're just getting creative."

‘I can’t afford to quit’

Lucas and Karen Martin of Sebastopol's K & L Bistro put their hearts and souls into their small restaurant for 20 years. In the early days, the couple put their son's crib in the kitchen as Karen worked the line and Lucas served customers. Over the years, they added staff, grew the business and looked forward to retirement, or at least not working brutal night and weekend hours any longer, Lucas said.

Instead, they're working more hours than ever before and barely treading water.

Karen is the lone cook, while Lucas does pretty much everything else, including the dishes. They've hired a runner and a bartender to help, but if anyone calls in sick or the couple has to take a few days off, as they did in late August to drive their son to college, the restaurant closes.

There's no other option, said Lucas Martin.

"There's just no one to run the restaurant. We used to have a ton of employees, probably more than we needed. Now, there are two," he said.

It's not for lack of trying to find staff. Martin has posted job openings for months without response and recently gave up altogether. With nearly 1.75 million unfilled restaurant jobs, according to the U.S. Department of Labor, there are too few applicants for the often low-paying, high-stress positions. After being laid off in 2020, many restaurant workers have changed careers or gone back to school.

"A lot of people get stuck in the restaurant business. The tips are really good, and when you're earning a few hundred dollars a night...it can become a tender trap. Some of our best people went back to school to get a degree. One got their real estate license," Martin said.

"The pandemic forced people to re-evaluate."

Sebastopol, he said, is especially challenging because restaurant workers can't afford to live there and aren't interested in the long commute from other more populated cities, like Santa Rosa, where restaurant jobs are plentiful. Others are just waiting for unemployment benefits to run out before returning to work.

Martin said it's been painful to watch all the effort and hard work the couple put into the restaurant over the last two decades slip away.

"It's just really sad, to be honest, and it's been hard to stay motivated, but we make ourselves go on. We've worked more in the last two years than ever before. It would be easy to quit, but I can't afford that," he said.

If there is one silver lining, Lucas said, it is that the couple has come full circle, running a lean operation together and trying to look toward a better future. "This tiny restaurant that started with two of us has come full circle. I just love this place. It's our heart and soul," he said.

The $22 turkey sandwich

Chef Chris Ball of Seafood and Eat restaurant in Windsor and Down To Earth Cafe in Cotati has had to raise the prices on his menus to keep up with the rising cost of goods.

He knows customers hate that.

"We're insanely busy, and we can't break even," Ball said of his Cotati restaurant. "I just can't charge enough because any increase I make is only half enough, but when I raised the prices on my menu, people lost their minds."

Ball has always prided himself on using ingredients from local farms and ranches, paying good wages and making as much as possible from scratch, like the pastrami that takes nearly a month to cure, his pesto aioli or the whiskey sauce for his beignets. According to Ball, commodity ingredients sourced from factory farms, premade sauces, and processed ingredients are up to 40 percent cheaper.

Strapped for cash, restaurants are already moving toward premade products that solve their labor issues and cost far less.

"The sad thing is that people probably only notice one time that things are different," he said. "You don't need talented staff when all they have to do is show up and portion it out from a bag."

"Restaurateurs are dumbing down their products to remain profitable, and that's smart from a business time. I could reduce prices, and I'd lose a few people, but the rest would still show up, which doesn't support anything around us. That's not the model we need to be going to. That's not good on a grand scale. Our entire food chain and distribution chain depend on us," he said.

Ball said that when he factors in the cost of good ingredients, wages, workers compensation, rent, insurance and all the other costs of doing business, a turkey sandwich should cost around $22 for him to make a profit, but no one would pay it.

Instead, business is going to less labor-intensive restaurants.

"If you're serving pizza, Chinese food, hamburgers or Mexican food, you've probably done great during the pandemic. But white tablecloth dining isn't coming back," he said.

That means talented chefs are moving into different careers, and high-end servers are taking their sales skills elsewhere.

"There's a massive brain drain from this industry,“ he said.

“Older guys who know what they're doing are gone, and there's nobody behind them that knows how to cook. All of the sudden, you're a chef at 22 because you can just buy everything premade. Most of the people I know have bailed.”

Ball is looking to cash in on the takeout market with a new ghost kitchen, a food business with no brick-and-mortar presence, just cooks making food in a commercial kitchen for delivery. He can use his kitchen and staff, use lower-cost ingredients and outsource delivery to Doordash or Grubhub.

It's not what he's dreamt of as a trained chef, but at least it will help pay the bills.

A light at the end of the tunnel

With seven restaurants and 475 employees, Mark and Terri Stark have faced their own challenges. That includes opening their newest restaurant, Grossman's Noshery & Bar, in March 2020, which was not eligible for any of the federal relief programs, and working toward a 100 percent voluntary vaccination for staff.

Though each restaurant operates independently, the group benefits from unified management practices that have allowed the restaurants to retain employees by prioritizing wages and benefits for employees. Though they were forced to lay off most of their staff in early 2020, Terri Stark said the restaurants have retained a large share of their former team and hired several hundred others during the ongoing tight job market.

The Starks own Stark's Steakhouse and Seafood; Willi's Wine Bar; Willi's Seafood; Monti's; Bird and the Bottle; Grossman's Noshery; and Bravas.

With easily accessible locations popular with tourists in Santa Rosa and Healdsburg, Terri Stark said that by April 2021, when diners began coming out in droves, things began pick up at their restaurants.

"It's been up and down, but we have seen a few months that were even better than 2019. We are holding up okay," Stark said.

Dealing with unvaccinated diners and the emergence of the delta variant, however, have been challenging. Stark made it her mission to encourage vaccination compliance, including a raffle of 21 $1,000 gift cards and a party for vaccinated staff in early September.

More than 90 percent of the group's workers are now vaccinated.

"We are waiting for the inevitable...people are probably going to need to be vaccinated to go inside a restaurant soon. We're trying to figure out our protocol and get on the bandwagon sooner rather than later," Stark said. San Francisco recently mandated that restaurants and bars require patrons to show proof of vaccination before entering.

Despite their challenges, Stark is taking the long view.

"I wish people could feel optimistic that this current staffing situation isn't forever. People can't see the light at the end of the tunnel, but it will come," she said.