‘We had to do something drastic’: For these East Bay restaurants, evolution is the key to survival (2024)

In November 2023, the West Berkeley restaurant Tarocco closed for two weeks.

Sequoia Del Hoyo and Jason Botterill, partners in the restaurant and life, were pouring everything into the business but barely making ends meet. Their business recipe was not working, and adjustments were needed. They took a break, putting some distance between themselves and the restaurant.

“I was really scared, I was not sleeping,” Del Hoyo said.

Del Hoyo’s family is from Barcelona and she has visited the Spanish city numerous times, while Botterill worked in restaurants in Barcelona before coming to the Bay Area and serving as sous chef at Chez Panisse. To find a new vision for Tarocco, they took inspiration from the Spanish tapas cafes that have operated for more than 100 years with pared-down menus and spartan staffing.

To survive, they decided, they would need to do what many restaurants and other food-focused businesses have done recently — pivot to a new model.

Fast forward to an August Thursday at lunchtime in West Berkeley and Tarocco is doing a steady business of sit-down diners and to-go orders. Del Hoyo and Botterill are more hands-on than ever, but they no longer feel like they are barely treading water financially.

“We recently had to spend $10,000 to replace a hood in the kitchen,” Del Hoyo said. “That would’ve been devastating before.”

To get there, Del Hoyo and Botterill rethought the details and nuances of every aspect of the restaurant. Previously, customers would order at the counter from a varied menu that included made-to-order items that could take 30 minutes to prepare. The food was then delivered to customers’ tables. They employed a staff of seven, for service, dishwashing and cooking.

‘We had to do something drastic’: For these East Bay restaurants, evolution is the key to survival (1)

Now, they offer a collection of eight to 10 premade items each day. Customers order at the counter, get their food on the spot, and then can sit down inside or out, or take it to go. They laid off the entire staff of seven people when they emerged from the November 2023 closure but have since brought back one employee.

“That was the hardest part, and the biggest reason why we waited so long. We were at our breaking point but we felt responsible for all these hard-working people that believed in us and our vision,” Del Hoyo said. “We knew it wasn’t working and couldn’t go on any longer. We had to do something drastic to save it, or close it.”

The result has been a complete reversal in Tarocco’s prospects —while staffing costs plummeted 80%, sales tripled.

“Some people were telling us to do more, like open for brunch,” Del Hoyo said. “But we wanted to become more efficient, operate less hours, but sell out more and reduce waste.”

Like a video game with a progressively more challenging boss at the end of each new level, restaurants have been faced with a series of obstacles since 2020, any one of which could sink a restaurant on its own. If a business survived the pandemic shutdowns, it was welcomed back to “normal” with rapidly increasing costs, a shifting labor market and a consumer metamorphosis.

As a result, businesses have searched for success (or at least hope) with inventive pivots —reimagining how they serve, what they make, and how much it all costs. The businesses that are responding with creativity and nimbleness are finding a more consistent flow of customers and more stability.

At the Oakland fine dining restaurant Mägo, chef and owner Mark Liberman has introduced a new split pricing system for his prix fixe menu with a lower price on weekdays versus weekends, while also holding special events and revamping the menu. Kyle Itani folded multiple brands into a single space, operating Hopscotch catering out of the Itani Ramen kitchen, and also held a series of special Hopscotch brunches at the ramen restaurant during the summer.

And it’s not just restaurants that are making creative changes. After 90 years in business, in June Oakland’s Food Mill launched an online marketplace with nationwide shipping.

Making fine dining more accessible

At Mägo, which offers both a prix fixe and a la carte menu, drastically altering the service model was not a realistic option. Diners at upscale restaurants tend to expect superb, attentive service along with an expertly crafted meal.

In fact, early this year Liberman was brainstorming ways to get more steady hours for his staff, as weekends were busy but the weekday nights were slow and heading in the wrong direction.

“The weekday business had dropped significantly, and I was talking to other chefs and operators in Oakland who were experiencing the same thing,” Liberman said. “Is it the price point? Are we too fancy? Why are we not as busy on Thursday, but turning people away on Friday and Saturday? The reality of operating in Oakland is that we don’t get the same tourism as San Francisco, we don’t have a population with the same disposable income as San Francisco or in New York.”

‘We had to do something drastic’: For these East Bay restaurants, evolution is the key to survival (2)

After exploring various ideas, Liberman landed on the plan of offering the same prix fixe menu for less money on weekday nights versus weekends.

“Our servers were losing shifts because we weren’t as busy on weekdays and we wanted to attract people,” said Liberman. “At the time we were considering it Wendy’s got bashed for introducing a ‘surge pricing’ plan and then they backtracked. So there was concern around that. But this is not surge pricing, it’s set pricing for different days of the week, just like a lot of luxury items, hotels, travel, there are times when it’s cheaper and other times it’s not so cheap. We wanted to find ways for people to try us without spending so much money.”

Previously the prix fixe menu was $98, now the cost is $82 on weekdays and $110 on weekends. Along with a refresh of the menu and dining experience that includes appetizers on the pleasant back patio and a small take-home treat at the end of the meal, and some recent special events, such as a seafood and ceviche cooking class, the new pricing plan has brought new attention to Mägo.

‘We had to do something drastic’: For these East Bay restaurants, evolution is the key to survival (3)

“I think in five years this will be more common,” Liberman said of the two price points, something the three-Michelin-star Alinea in Chicago also does. “The advancement in point of sale technology makes it easier for restaurants to have different prices on different days, but it is probably harder for an a la carte restaurant to do.”

The changes have ended up being a positive for both customers and staff, and, a few months in, the program has been such a success at bringing in more weekday customers Liberman plans to start opening on Tuesdays.

“Overall it’s been very good,” he said. “The checks are smaller on weekdays but it’s created more consistency and everyone gets their shifts each week. The guests really enjoy it. The regulars who dine with us, it gives them a chance to come in more frequently, and the weekend business is still really good.”

Two restaurants in one

Prior to the pandemic, Kyle Itani was running a cluster of popular restaurants in Uptown Oakland, but when the lockdowns lifted, the office workers did not fully return to downtown and the restaurants suffered.

“We used to have really strong numbers at lunch and during happy hour,” Itani said. “Those were our strong meal periods and the lack of office workers really hit us hard.”

Itani says 2024 has been better than 2023. Through the first nine months of the year, sales are up roughly 10%, but still well below 2019 figures.

‘We had to do something drastic’: For these East Bay restaurants, evolution is the key to survival (4)

Rather than shutter Hopscotch completely coming out of the pandemic lockdowns, Itani consolidated and simplified in 2023. Hopscotch closed as a full-service restaurant and shifted to catering only. Eventually, Itani started offering Hopscotch items for pick-up and delivery through the Itani Ramen space, which neighbors his other restaurant, Yonsei Handrolls. Now, the Itani Ramen kitchen handles all the food for both the ramen restaurant and Hopscotch’s catering and delivery/takeout business. In August, Itani Ramen hosted special Hopscotch brunches on Sundays.

“My challenge at Itani Ramen has always been how to make it through the hot months every summer when business dips. Ramen sales are pretty weather-dependent,” he said. “The brunches were successful but we were a little late to market them, so it felt like by the time we really got going there were only two more weekends of brunches left.”

Even with the “sizable commission” that services like Doordash and Uber Eats take, by folding Hopscotch’s operations into Itani Ramen and offering food from both out of the same locations, Itani has found efficiencies that make it work.

“The customers have also just changed their behavior more generally,” Itani said. “There’s less in-house dining and more take out.”

Accordingly, when Itani opened his eponymous sushi restaurant in the old Kirala 2 space in Berkeley’s Epicurious Garden in September, he immediately added delivery as an option.

“It just makes sense these days with the way customers operate and the fact that sushi is something that travels well,” he said.

Meanwhile, Itani keeps adapting at the ramen restaurant. With the success of the Hopscotch brunches, he has decided to start opening for lunch service on Sunday and will incorporate a few brunch items, such as more egg dishes and specialty cocktails, into the menu.

‘We had to do something drastic’: For these East Bay restaurants, evolution is the key to survival (5)

Itani Ramen’s lease was up for renewal at the end of this year, and back in January, he was unsure if the restaurant would continue past 2024. But Itani recently resigned for five more years.

“I feel like next year will be a good year,” he said. “But I’m eternally optimistic, maybe to a fault.”

Old businesses learn new tricks

Early on in the pandemic, the Food Mill was doing record business as people were cooking and eating at home more than ever and looking for specialty products including the types of flours and grains the market carries.

But as lockdowns lifted and more stores reopened, the Food Mill started seeing a steady decline year over year. After its record 2020, sales have slipped roughly 5-10% each year. Meanwhile, margins have shrunk as costs have shot up for everything from the goods they sell to utilities.

“The cost of all of our products – everything across the board has gone up,” said Breanna Watkins, a manager and member of the family that operates the Food Mill. “The distributors, the delivery fees … it’s all gone up. We’re getting new fees from delivery services, a gas surcharge that they never used to add. During COVID they added a gas surcharge on shipments and it hasn’t gone away. Our PG&E bills have quadrupled.”

In June, The Food Mill, which celebrated its 90th anniversary in 2023, launched its first-ever nationwide online store as a direct response to the drop off in customers.

The online store includes Food Mill’s signature peanut butter, 2,500 supplements, and 1,200 natural personal care items in addition to the stores’ honey, cookies, and other products.

‘We had to do something drastic’: For these East Bay restaurants, evolution is the key to survival (6)

“A lot of people, depending on where they live, don’t have access to the herbs and supplements we sell, so we have gotten a lot of interest online for those items,” Watkins said. “A lot of the orders are buying everything we have in stock of one particular item. We had this chamomile tea of a certain brand and someone bought all six boxes we have.”

Since the June launch, they have shipped orders all over the country including Oregon, Florida, Texas and New York.

“I’ve been getting a lot of emails from people who used to live here and have nostalgia for the store. They remember coming in with their grandparents,” Watkins said.

Setting up the online store took roughly a year of work, including the sales system and website, which Watkins mostly did herself because they didn’t want to spend on vendors.

“It’s been steadily growing each week and we hope it’s part of what keeps the Food Mill alive,” Watkins said. “A lot of our loyal customers have moved out of the area, and if we are going to stay alive after 91 years, online is the way to do that.”

‘Blows my mind’

Nearly one year after Tarocco’s existential crisis and operational pivot, the business has stabilized and thrived by winnowing costs and refocusing on key elements.

Del Hoyo and Botterill leaned into the most fruitful areas of the restaurant. Tarocco is open 11 a.m. to 2:30 p.m. Monday through Friday, with its sights firmly set on the West Berkeley office lunch crowd. On weekends the restaurant is closed so they can host catered events, like weddings and anniversaries, and the calendar is 75% booked through the end of the year. Tarocco also offers a home delivery meal service that started during the pandemic.

‘We had to do something drastic’: For these East Bay restaurants, evolution is the key to survival (7)

“We don’t want to expand, we don’t want to do dinner, we want a life, we want to take our kids to school,” Del Hoyo said. “The events have a big part in making that happen. We’ve done well with our catered parties on weekends. And making the experience better, interacting with customers at the counter has made it better. I think we were missing some of that hospitality before. I’ll take great service and OK food over OK service and great food. Maybe that’s just me. We wanted to do one thing and do it well, and I think that’s working.”

Between the increased sales and reduced staff, a year after the temporary closure Tarocco is profitable and thriving.

“How effective this has been blows my mind,” Del Hoyo said. “The counter is more interactive. We get to know the customers and have established better relationships. We spent too long listening to outside voices and opinions, and finally we decided to stop treading water and find a better way to serve people.”

Customer Kristina Lovato, who stops by Tarocco weekly, seemed to agree.

“The customer service is great, they take the time to get to know you,” she said. “The salads are fantastic, and their desserts —the plum cake blew me away —it’s nice, casual, and you can sit down or grab your food and go. It’s such a great option, I will go out of my way to come here.”

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