Moneybox

What It Took for an Upscale Restaurant to Finally Give in to Delivery Apps

A year of trying everything to survive the pandemic.

The Resy at Home Specials kit from Thamee.
In December, Thamee participated in Resy’s At Home Specials series. Thamee

When the D.C. Burmese restaurant Thamee closed in March 2020 at the onset of the pandemic, its owners didn’t know if they’d ever open their 1-year-old business again. They had just had their first five straight weeks of profitability when D.C. shut down in-person dining for the first time, and though they had a lot of momentum behind them—the restaurant had recently been named a semifinalist for the James Beard Award for Best New Restaurant—they didn’t feel equipped to transform their upscale dine-in business into a carryout and delivery joint. At the time, co-owner Eric Wang told me that if Thamee was still shut down by June, he’d place the restaurant’s chances of survival around 50 percent.

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But June came and went, and Thamee stuck around. Eventually, the restaurant reopened for takeout and delivery, with a pared-down menu designed to be more accessible for casual app users. More than a year into the health risks, government restrictions, and changes in consumer behavior that have wreaked havoc on the global hospitality industry, Thamee remains well-positioned to ride out what we all hope will be the last phase of the pandemic as we know it. It hasn’t been easy: As recently as a month ago, general manager Jordan Lee told me, the Monday staff meeting could turn into a discussion about whether that would be the week the restaurant had to close for good. A look at the previous week’s sales could be enough to steer that conversation in the direction of hope, or anxiety.

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Dishes on top of a colorful place mat.
“When people got home, they put those placemats in, they took pictures, and looked like they were at our restaurant. It was fantastic,” co-owner Eric Wang said. Vy Luu and Romin Andy Shahpouri
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There wasn’t one catch-all solution that saved the restaurant, which is also run by co-owner Simone Jacobson and her mother, Burma-born executive chef Jocelyn Law-Yone. Instead, the group cobbled together a list of special offerings, virtual events, partnerships, and outside assistance. “It became clear to us very early on that doing just delivery and carryout wasn’t enough to sustain our business,” Wang said. Without any one component of its survival strategy—such as the six-figure Paycheck Protection Program loan Thamee received early on, the two grants it got from the D.C. government, or the 40 percent rent reduction offered by the restaurant’s landlord—the whole enterprise could have crumbled. “Our biggest accomplishment so far during the pandemic is that we’re still here and ticking,” Wang said. “I can’t say the same about a lot of other more established and well-funded restaurants in D.C.”

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Thamee even managed to spend May and June making meals for front-line workers through a local initiative and for D.C. Jail health care workers through World Central Kitchen, José Andrés’ food-relief organization, which reimbursed the restaurant a set amount of money for each meal. But later in June, when compliance with mask regulations rose and Wang and the other members of management had more information about how to mitigate the risk of COVID-19 transmission, the restaurant began offering once-a-week prix fixe packages that customers would pick up at the restaurant and eat at home: a few courses, two servings of each, for $50 to $65. To the chefs and managers, it seemed like a natural midpoint between the elevated menu of their pre-pandemic business and mass-market takeout fare.

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But in time, it became clear that developing a new prix fixe menu every two weeks was unsustainable, and Thamee’s shrinking sales numbers couldn’t justify the time it took to execute the concept. In normal times, Thamee had its regulars—but for many customers, it was a special-occasion restaurant, and Burmese was an unfamiliar cuisine, too far outside most people’s weekly dinner rotation. The prix fixe packages were a better approximation of the in-person Thamee experience, but they came at a price point and level of complexity that didn’t make sense for at-home pandemic diners, either.

A few other summer 2020 initiatives fell short of management’s expectations. For a while, Thamee offered meal-prep kits called Burma Boxes, which came with recipe cards and prepared ingredients for making Thamee dishes at home. “I thought it was this amazing idea, because my girlfriend’s not the greatest cook … but she made one of these Burma Boxes, and it tasted just like Chef Jojo’s mohinga,” Lee said, referring to the catfish stew some call the national dish of Burma. “I was like, this is so crazy, because she did this in 25 minutes.” The soup, including the stock that came premade in the Burma Box, would normally take around 12 hours to make from scratch. Lee had been concerned about the lapse in quality when food cooked in the restaurant had to be packaged, bagged, driven around, and possibly reheated in a microwave at a customer’s home, rather than plated and served immediately. The Burma Boxes would seem to eliminate some of the gap between the two dining experiences.

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They were extremely labor-intensive to prepare, though. With 10 to 15 components per meal and two meals per box, “10 boxes turns into this 300-piece set of things you have to do,” Lee said. If demand had been great enough to make the boxes Thamee’s main source of income, they might have been able to figure out a staffing plan that made the project worth the labor hours that went into it. But they weren’t in the meal prep business—they were a restaurant. In the fall, they abandoned the concept.

Events have been more lucrative for the restaurant, in part because fewer staff members have to work to make them happen. At the beginning of the pandemic, when virtual happy hours were still a novelty, Thamee partnered with Happied, a local virtual-event planner, to host a series of Zoom cocktail hours. Customers bought their own liquor from provided shopping lists, and Thamee bar manager Richard Sterling led them through a couple of cocktails. “When we first started doing them, they were the hottest things,” Wang said. “At first, we did anywhere between $2,000 to $3,000 for one event. That was basically what we were making on a slow Monday before, but it was half of our weekly take during the pandemic.” More recently, the restaurant has enlisted D.C. sommelier and sherry expert Chantal Tseng to host a monthly virtual version of her popular pre-pandemic cocktail series, which she used to run at a local bar. Each month, Tseng chooses a novel for attendees to read and devises three cocktails to go along with it. Customers pick up the premade drinks, along with bar snacks, at Thamee, then chat about the drinks and book on a Zoom call. (Last month, the author of the chosen book joined the Zoom, too.) Thamee turns a 10 to 15 percent profit on every cocktail kit.

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Thamee also had to figure out how to broaden its customer base beyond those who’d already gotten to know the restaurant before the pandemic in its first year of operation. Joining up with Tseng, who had a following from her in-person events, seemed like an opportunity for both parties to introduce themselves to a new clientele. That’s the strategy behind the several pop-ups Thamee has hosted in its kitchen over the past year. La Tejana sold breakfast tacos out of the restaurant, local za’atar company Z&Z sold lavash roll-ups, and SoKa-DC, a Korean-Guatemalan concept, offered a full tasting menu. Thamee charges pop-ups a 5 to 10 percent fee for the use of its space, but it doesn’t amount to much more than it takes to cover costs. “We’re not here trying to make money off other businesses—that’s not our business model,” Wang said. But “when they bring their customers into our restaurant, a lot of times physically, a lot of these customers are like, ‘I didn’t know you guys were here!’ And then a week later, I’d often see those same customers pop up on a ticket for delivery or carryout.”

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Not all of Thamee’s pandemic-era projects were intended to be big moneymakers. Over the summer, as racial justice protests erupted in D.C. and across the country, Thamee introduced the Black Farm Bag, a weekly CSA package with groceries sourced by a local food-equity nonprofit. The restaurant also opened its BIPOC Pantry, a collection of nonperishables and beverages made by small producers of color, on sale in the restaurant and through delivery apps. This was a natural pivot for the restaurant’s owners, who ran a small Burmese bodega called Toli Moli before opening Thamee in 2019. “It’s a low-effort revenue generating thing,” Wang said. “You’re getting stuff wholesale, unpack, display, and that’s it.” But according to Lee, the profit margin on pantry items, which include coffee from Brooklyn’s Nguyen Coffee Supply and hot sauces from local producer Pepperly Love, is still thin: No one’s going to buy a $25 bag of coffee, so the Thamee markup is just a couple of dollars. And if a customer really likes the product she bought from Thamee, she may be able to buy it cheaper directly from the producer when she wants a refill.

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So while the Black Farm Bag and BIPOC Pantry were important to Thamee’s owners, who have long seen the restaurant as an instrument for social change, they weren’t going to keep the business afloat. “Once the Burma Box didn’t work and we were heading into the winter of the pandemic, it was like, ‘OK, we have a choice now. We’re gonna have to do something sustainable, or we’re gonna have to close,’ ” Lee said.

The sustainable thing happened to be the very last thing anyone at Thamee wanted to do: Get on all the delivery apps with a scaled-back, low-concept menu tailored to the tastes and price points of a mass-market takeout consumer, the kind of person who might not be familiar with Burmese food but is ready to order a comforting bowl of curry multiple times a week. In October, when Thamee registered with the apps, they went big on noodle and rice dishes, which were cheaper to source, quicker to make, and more legible to a wide variety of diners than some of the restaurant’s funkier or fermented fare. Out went the large-format dishes, like the steamed branzino, which were made for communal dining and whose dramatic presentation wouldn’t travel well. The uncertainty of delivery and carryout—as opposed to a week of dinner reservations—was prohibitive for expensive ingredients like duck, too, which Thamee had to buy in quantities of 12 and didn’t want to waste. And items that took a long time to make, such as the three-day aged duck and a chickpea dish that required multiple days of soaking and sprouting, weren’t cost-effective enough to make it to the pandemic menu.

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“At first, our chefs were like, ‘This is kind of boring. We’re not doing anything new,’ ” Wang said. “But we reinforced to each other, ‘Yes, it’s not the most exciting food that we’re making, but it is still damn good food. I know you guys might be tired of making the same five to six dishes, but it’s what’s paying all of us. It’s what’s keeping the restaurant open.’ ” Each of Thamee’s three delivery apps—Uber Eats, Grubhub, and DoorDash—takes a 15 percent cut of sales, the most allowed under D.C. law, so employees try to promote Toast, Thamee’s less-costly pickup ordering platform, whenever they post the menu on the restaurant’s social media accounts. Wang has noticed that Thamee regulars tend to use Toast because they know the restaurant will get to keep more of their money, and customers who order food for pickup tend to spend more per order. Delivery sales currently make up 35 percent of the restaurant’s orders and 30 percent of its revenue; the rest is pickup.

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Thamee had to keep its staff small to make these numbers work, especially because of its pay-equity initiative, which eliminated tipping in favor of an across-the-board living wage and a 30 percent surcharge that goes toward employee health benefits and profit-sharing. To make ends meet in Thamee’s delivery-and-carryout-only phase, management cut the restaurant’s cocktail and wine curation programs, which meant they no longer employed a full-time bartender or beverage director. The streamlined menu also meant less time needed for food prep and specialized skills, so they couldn’t keep on their sous chef or dishwasher. But in this iteration, none of Thamee’s current employees had to work more than 40 hours to make the business run five days a week. The new, simpler menu boosted sales revenue by about 5 to 8 percent, but with the cost savings on ingredients and labor, Thamee’s profits increased by 55 percent, making it possible for the restaurant to survive the winter.

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Every Thamee employee but one is an immigrant or a child of immigrants, which Wang credits with their willingness to soldier through this period of relative stagnation and belt-tightening. “They know that hunker-down need. … People get that right now is not the time to be creative and supercute with our menu,” he said.

But one of the restaurant’s most lucrative endeavors was also one of its most creative. In December, Thamee participated in Resy’s At Home Specials series, which was co-sponsored by American Express. The restaurant devised a week of prix fixe dinners, with each day’s menu made up of dishes that had never been served at Thamee before. Customers paid $75 to $100 for the meal, and Resy paid Thamee a participation fee that was “actually quite hefty,” according to Wang. Law-Yone built the menus around a Sino-Burmese theme, inspired by her father’s Chinese ancestry and roots in the Chinese border region of Burma. A former Thamee server who’d been tapped as the restaurant’s music director made playlists that were packaged with each meal, which also came with place mats that mimicked the vibrant designs of Thamee’s tabletops. “When people got home, they put those placemats in, they took pictures, and looked like they were at our restaurant. It was fantastic,” Wang said.

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And it turned out that the restaurant’s most loyal customers were just as happy to frequent Thamee in its new, casual form as they were to shell out for a special event or more gourmet fare, to Wang’s great relief. Some even volunteered to donate the remainder of their gift cards or house accounts to help ensure that restaurant is there when the pandemic subsides. Thamee’s owners maintain that restaurants shouldn’t open for dine-in service until their employees are vaccinated—but now that most of their staff members have gotten a shot or an appointment, they’re making plans to reopen in-person dining, ideally once D.C. increases indoor restaurant capacity to 50 percent. The in-house menu will be slightly more elevated than Thamee’s delivery offerings, but it will remain somewhat scaled down from the pre-COVID menu; Wang hopes to keep the labor and ingredient cost savings going for a while longer and maximize table turnover to seat as many customers as possible each day. Thamee will keep its carryout and delivery programs going, too, because Wang suspects that some customers will take time to feel comfortable in public spaces.

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That’s no longer such a disappointing prospect to Lee, who has come to enjoy finding ways to translate the in-person Thamee experience to at-home diners. He’s proud of the thoughtful touches they’ve incorporated into their delivery program, like labeling every container, printing out directions, and separating noodles from broth so they keep their texture. Every now and then, they’ll throw in something a customer didn’t order, along with a note explaining what it is—like Thamee’s house-made balachaung, a Burmese condiment made from dried shrimp, garlic, and chilies. “You don’t know until you try it that it goes with everything,” Lee said. “What’s really stuck with me, and kept me going, is that hospitality … is not just a warm greeting or a suggestion for a dish or a kind of music or chairs. Just because guests aren’t coming in through the door doesn’t mean hospitality has to stop.”

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