Xconomy Bookclub: Big Data Meets Fine Dining in CEO’s “Culinary Tour”

Xconomy Texas — 

Software, it has been said, is eating the world. Now the food world is looking to use technology and analytics as a main ingredient in running more profitable organizations.

So says Damian Mogavero, who along with Joseph D’Agnese, wrote The Underground Culinary Tour: How the New Metrics of Today’s Top Restaurants Are Transforming How America Eats.

To be sure, Mogavero has a stake in the game. He’s the founder and CEO of New York-based Avero, a restaurant-focused software company with five-star clients such as Caesar’s Entertainment, Batali & Bastianich Hospitality Group, and Union Square Hospitality Group. In the risky world of restaurants, Mogavero writes, “Numbers are a balm, a warm blanket you could throw around yourself and say, ‘OK, I got this.’ ”

Owning and operating a restaurant can be difficult because of minuscule margins, high and volatile food and labor costs, and fickle consumer palates. The culinary world often considers its work to be more in the realm of art than science, but Mogavero insists that restaurateurs should “deconstruct the guest experience” by gathering and analyzing data.

Instead of performing back-office functions like inventory management, ordering, and employee productivity by “feel,” Mogavero says smart restaurateurs (he calls them the “New Guard”) are using software to make better decisions that enhance both the bottom line and the customer experience.

“Data drove the insight, and their creativity addressed the insight,” he writes.

Mogavero’s connection to restaurants started in his youth, working as a busboy in a New Jersey restaurant called Ginsberg & Wong (think Jewish deli meets Chinese restaurant). He ended up going to Harvard Business School and Wall Street, underwriting junk bonds. Still, even in the world of high finance, Mogavero writes that he insisted on picking the restaurant, menu, and drinks for the dinners that celebrated the closing of deals.

After business school, he became the CFO for a restaurant group, a job he said frustrated him. They “couldn’t answer basic questions such as: ‘Who are your top and bottom performers?’ and ‘What are your most profitable menu items?’ ”

That was in 1999—the infancy of software-as-a-service taking over Main Street businesses—but Mogavero decided to start Avero. At first, he says he faced skepticism even from within the ranks of his own staff with programmers and foodies casting a wary eye on the other. “The funny thing that happened is that the restaurateurs became computer savvy, and my techies started eating foie gras and drinking nice wine,” he writes. “And that became the culture of the company.”

In some ways, Underground Culinary Tour comes across as a book-sized advertorial for Mogavero’s company. The “New Guard” restaurateurs, after all, happen to all be his clients, and he offers case studies with some of them, including Fogo de Chao, Hakkasan, and Brennan’s. (Also, I found the writing style a bit over the top: it seems that nearly everything is “legendary.”)

Though Mogavero does mention the impact of apps such as Vivino and Delectable–which collect data from user-uploaded wine reviews—and food delivery startups such as Ando and Maple, he doesn’t elaborate on who else is attempting to innovate in the food-tech ecosystem.

One that comes to mind is Ziosk, a Dallas company that sells its ordering, payment, and survey tabletop devices to fast casual chains such as Chili’s Grill & Bar. Or, there’s Byte, an Austin, TX-based restaurant analytics startup.

A short discussion of other entrepreneurs and how they are trying to use tech tools in the restaurant industry—and what innovation trends might be coming down the pike—could have strengthened Underground Culinary Tour.

Still, Mogavero does share interesting ways in which his software has shown clients how seemingly unrelated data points might impact a restaurant’s bottom line:

—Accounting for the weather. At Navy Beach, a restaurant in Montauk, NY, Avero found that the most requests to sit outside from patrons came on days when the temperatures were between 50 and 70 degrees. So, Mogavero says, the restaurant knew if it brought on the extra staff for patio service when the weather forecast called for those temperatures, it wouldn’t lose money.
—Tracking micro-events like concerts and festivals that could affect the number of patrons at a restaurant on a given day but also what those patrons might order. “The wines that attendees of a Celine Dion concert are likely to order are markedly different than the rounds of beer demanded after the Wrangler National Finals Rodeo,” he writes.
—Detecting “micro-theft” through what Mogavero calls the “seven classic scams” in which servers reuse coupons or inappropriately take menu items off a check (without the patron’s knowledge) that allow them to pocket the difference.

Mogavero says algorithms that measure a server’s productivity, along with their scheduling and whether they worked the bar or tables, can be put together to create what he calls a “personal work signature.” It’s the same sort of principle that credit cards use to detect deviations from your normal spending habits, he says.

Two chapters of the book detail an actual culinary tour in which Mogavero introduces food executives from other parts of the country to the latest offerings in New York’s trendy food-and-drink world. While I enjoyed the food porn in Mogavero’s descriptions of the dishes—don’t read this while hungry—I wanted more dish about the conversation among the attendees.

I realize that some of these people would not want their names to be used, but the book would have benefited from more on-the-record conversation. What are the issues they are dealing with? Do they believe technology can help solve those problems and, if so, how? What are the trends—both technological and culinary—that are shaping both their businesses and my experience as a consumer?

Instead, the book largely features Mogavero offering himself as the solo source in these matters. And while being the CEO of Avero gives him an educated perch from which to opine, Underground Culinary Tour is somewhat lacking in the sort of depth that can come from other sources who can be weaved around his narrative.

As an enthusiastic foodie, whose day job consists of writing about technology, I enjoyed reading how these worlds combined, despite the reservations mentioned above. As food critics tend to conclude in restaurant reviews: I give Underground Culinary Tour three-and-a-half stars.