The Challenges of Running a Vegan Restaurant: Insights from Industry Leaders

Strategic Insights -

Eleven Madison Park's recent decision to bring back meat to its menu after adopting an all-vegan menu in 2021 sparked a mix of emotions among the masses. However, industry leaders and peers of chef Daniel Humm are not surprised by this decision, citing the difficulties of running a vegan restaurant. With rising costs, consumers reducing their discretionary spending, and a tiny core audience, plant-based restaurants face unique challenges. These challenges include lower alcohol sales, higher labor costs, and the perception that plant-based dishes should be cheap.

Key Takeaways:

  • The core audience for vegan restaurants is tiny, with roughly 6.4 million Americans considering themselves vegans or vegetarians, or just 2.5 percent of U.S. adults (MRI-Simmons National Consumer Study).
  • Labor costs for full-service vegan restaurants are often higher than industry standards, ranging from 40 to 60 percent of expenses (Dirt Candy, Vedge, and Oyster Oyster).
  • Food costs at vegan restaurants tend to run lower than the industry standard, ranging from 11 percent (Dirt Candy) to 18 percent (Vedge) to the mid-20s (Oyster Oyster).
  • Customers typically don't drink much at vegan restaurants, with some proprietors attributing this to financial or wellness reasons (Millennium, Happy Hour).
  • Owners of vegan restaurants often have to deal with complaints that plant-based dishes are too expensive, despite the high labor costs involved in preparing them (Rob Rubba, Oyster Oyster).
  • Simplifying the menu and lowering prices can help alleviate some of the challenges facing vegan restaurants (Rich Landau, Vedge).

Statistics:

  • 2.5 percent of U.S. adults identify as vegans or vegetarians (MRI-Simmons National Consumer Study).
  • 6.4 million people in the United States identify as vegans or vegetarians (MRI-Simmons National Consumer Study).
  • Labor costs for vegan restaurants range from 40 to 60 percent of expenses (Dirt Candy, Vedge, and Oyster Oyster).
  • Food costs at vegan restaurants tend to run lower than the industry standard, ranging from 11 percent (Dirt Candy) to 18 percent (Vedge) to the mid-20s (Oyster Oyster).
  • A celery root nest with smoked-tofu puree at Oyster Oyster restaurant requires at least four hours of active labor to make enough for one dinner service (Rob Rubba).

Sources:

  • Tim Carman, "By Chef Daniel Humm, Led by a New and More Flexible Menu," The Washington Post, no date provided.
  • MRI-Simmons National Consumer Study, no date provided.
  • Rich Landau, Vedge, interview with The Washington Post, no date provided.
  • Amanda Cohen, Dirt Candy, interview with The Washington Post, no date provided.
  • Rob Rubba, Oyster Oyster, interview with The Washington Post, no date provided.
  • Steven Salm, Planta, no date provided.