Calibrating A Foodie Culture

“The average person eats no more than thirty foods on a regular basis,” according to the new book Gulp by Mary Roach.  That is also the number of restaurants I frequent in Durham, North Carolina where I live.

In retirement, I know I eat out too much.  However, Durham’s reputation with foodies was established long before that term was coined and more than thirty years before Southern Living recently crowned us the “The South’s Tastiest Town.”

Durham is no stranger to accolades, even related to its foodie ecosystem, but it didn’t take news reporters here long to turn the newest “feather” into a story about our resurgent Downtown area.

Long before Downtown Durham’s reawakening, the Ninth Street, Rockwood and Brightleaf districts were earning Durham nationwide restaurant accolades.  Even before revitalization efforts were launched, this reputation was spilling over into  the City Center district.

I remember making a bet with a friendly local newspaper reporter over dinner one night in 1995, that Brightleaf was part of Downtown.  He lost the bet but continued to argue that since several other old tobacco factories separated Brightleaf from the center of Downtown back then, it didn’t count.

Now even those historic factories he saw as a demarcation have become repopulated by numerous restaurants, bars, offices, public services, shops and condos.

Today, while fawning over Downtown, news reporters often forget or have no memory that Durham was a thriving restaurant community long before the reawakening of its central business district.

Nor was “zero sum” ever a factor in its long slumber.  Just as American Tobacco is assumed to have spurred Downtown’s current renaissance, it is likely that spillover from districts outside of Downtown deserve some of the credit as well.

A study released this week by the NPD Group found that 42% of diners frequent their favorite restaurants regardless of promotions.  Only 9% “go where it is cheapest while 26% “switch around based on promotions.  Surprising to me was that 19% seldom eat out and 4% rejected any of these choices.

Quality, a combination of food and customer services, is the key driver of restaurant loyalty. An earlier NPD report showed a decrease in deal-driven consumers and that specials offered over a length of time are perceived as regular pricing.

Durham’s appeal as a dining destination was already emerging when the community’s first official destination marketing organization (DMO) was launched two dozen years ago and that reputation was quickly made a promotional centerpiece.

In the last few years though, food-related visitors were made one of a handful of focus areas and the results are clear. Visitors generate a third of foodservice revenue nationwide and the percentage is even higher in destinations such as Durham.

A billion visitors will stay this year in hotels and other lodging properties worldwide.  Nearly four billion will frequent restaurants.

However, the challenge for Downtown and other dining districts is to refocus on helping existing dining establishments become sustainable.  I fear that the “a more the merrier” frenzy fails to grasp how incredibly delicate survival is in the dining business. 

Each year, Nielsen computes a Restaurant Growth Index (RGI.)  The RGI charts restaurant openings and sales by metro area.  Nationwide last year, $472.4 billion in overall restaurant sales declined by $3.8 billion, while new restaurant openings surged by 47,161.

The year before, sales grew by $17.5 billion but the number of restaurants fell by 16,000.  The linkage is undeniable.  Churn is the scourge of a community’s dining reputation.

The four-county metro centered around Durham and including Chapel Hill, also known for its food reputation, is indexed at 109 points.  The higher the score over 100, the better the opportunities for additional restaurants.

“The RGI score is calculated on a metro’s total restaurant sales, sales as a percent of capita income, compared to the nation as a whole.”  If it isn’t, growth in tourism should be factored.

Boone, North Carolina, a tenth the size of the Durham metro but home to the 17,000-student Appalachian State University and one of the nation’s best hospitality degree programs, has an RGI of 460 and ranks 4th in the nation for restaurant opportunities.

In Durham’s cohort, Greensboro-High Point is indexed at 153, Asheville 130, Fayetteville 119, Charlotte-Gastonia 118, Winston-Salem 118, and Raleigh-Cary 112.

While still in positive territory as a location for new restaurants, Durham RGI is lowest among these metro peers, meaning we need to start focusing on making the restaurants we have more sustainable rather than just facilitating more competition, especially from chains.

Visitor-centric economic and cultural development works on the principle of generating “demand” for existing businesses and letting the marketplace determine when more are needed.

Unfortunately, entities involved in traditional economic development, such as chambers and downtown development organizations are more often “supply-driven.”

Focused on new developments, too often these groups can be insensitive or blind to the delicate issues of sustainability in the existing business climate, until it is too late.

Restaurants in particular must be viewed as more than just tangential to development as they were considered by traditional economic developers as recently as the 1990s.

It is also important to protect organic districts from chains.  Unfortunately, this will be put to the test if a new development along Ninth Street includes chain restaurants as rumored.  Hopefully, the developers are aware of what a chain store did to destroy Franklin Street in nearby Chapel Hill.

When making decisions or fostering a business climate communities are well-advised to adopt an index approach, taking the RGI down to the community and district level to ascertain when it is optimal or cannibalistic to grow an industry such as restaurants.

Wherever possible, the index must also factor in visitor and commuter populations to illuminate the sales per capita element.  It must also take into account the research showing that fostering local, independent businesses is preferable to generic, chain development.