Tom Hanson stood in an empty patio dining area at OMC Smokehouse on Wednesday, discussing the prospects of his restaurants’ future in the age of COVID-19.
On Day 3 of outdoor dining in Minnesota, there’s a big fear of the unknown in the restaurant industry.
Especially near the shores of Lake Superior, where not every day can be 80 degrees with virtually no wind like Wednesday.
“It’s really the icing on the cake and not the main driver,” Hanson said of the approximate 45 days of outdoor dining in Duluth. “I think if anybody tried to tell you they could live off outdoor dining in Duluth, it would be unsustainable. The restaurant draws people, and the patio intrigues people.
"It’s going to take indoor dining to get people back to a routine.”
When that returns is uncertain. Minnesota Gov. Tim Walz has not set a date for the next phase of his public safety plan. Hanson said he was told by restaurant industry insiders that Walz would open restaurants at 50% capacity for indoor seating June 1, but then found out outdoor dining was the preferred option.
“I’ve never once felt too intimidated living within this environment,” Hanson said of the coronavirus pandemic. “My understanding was to flatten the curve, and we’ve done that. If we sit in this situation forever, restaurants will go under. The idea that restaurants can’t be responsible is an offense to our industry.”
The 57-year-old Hanson, who co-owns Lincoln Park-based OMC with his son, Louis, and partners, Jeff Petcoff and Dan LeFebvre, also runs the Duluth Grill and Corktown Deli & Brews. He’s worried about the bottom line.
After shutting down for a month starting March 20 and then reopening for carryout orders, OMC averaged about 40% of its normal business. That was “far better” than Hanson anticipated, but not nearly enough to remain viable.
“That’s about 50% short for us to break even,” he said.
Among the three restaurants, Hanson has brought back between 80-100 of his 200 employees. But he says he will have to make more cuts if indoor dining doesn’t open soon. He already expects to permanently lose 30-40 workers at the Duluth Grill, which has reduced hours of operation from 9 a.m. to 7 p.m.
“We were on track to have one of the best years we’ve ever had as a company and were in a growth mode,” said 35-year-old Louis Hanson, who has been working in his father’s restaurants for 19 years. “It stopped suddenly, and now it’s about survival.”
The owners installed 11 new picnic tables outside, eight of them under a rented big top, and increased patio space. Since late March, they permanently closed the adjoining cocktail lounge Noble Pour and knocked out a wall to increase the floor space inside OMC, meaning social distancing won’t be an issue when the Superior Street venue reopens.
“It’s a big investment that we put into it, and it’s like a poker hand saying, ‘I’m making my last bet here,’” Tom Hanson said.
The last 2½ months have been tough on employees.
Sean Oland, a front house manager who has worked in the company for seven years, was unemployed for nearly a month.
“The change of everything was a surprise,” he said. “We knew it was on the horizon, but the reality of it set in really quick.”
Once Oland and others returned, the transition was made to offer carryout service, which the restaurant is still doing during its 3-8 p.m. hours of operation. Approximately six bags were waiting for pickup around the 5 p.m. hour; the phone was constantly ringing and within an hour, five outdoor tables were in use.
Regular OMC patron Emily DeLuca, who was picking up an order, says she didn’t know the place was even open to eat outdoors.
“I would just like to know which places are open (for outdoor dining) and to have better advertising,” she said.
Louis Hanson says restaurants have needed to alter their approach by turning to social media to advertise.
“Word-of-mouth, people sharing blog posts and Instagrams, which is a different clientele,” he said. “It’s a different generation looking through (social media). It’s easy to advertise if you have money.”
Other challenges facing restaurants include meat shortages as well as higher prices and unstable supply chains, Tom Hanson said. The cost of purchasing brisket alone has doubled.
The owners applied for small-business loans and were part of the recent government-sponsored Paycheck Protection Program. Tom Hanson doesn’t know how much will have to be paid back, but called the program “the lifeline to keep your doors open.”
Now the owners are trying to adapt to future industry changes and stay one step ahead.
“We’re constantly challenging ourselves to be better,” Louis Hanson said. “We’ve been through challenging times in the 19 years; it’s not all easy. We’re ready for the challenge again and see if we can make this a legacy … and stay afloat.”