Rating the Michelin Guide

Can the once-revered restaurant bible become relevant again?

In the Paris banlieue of Boulogne-Billancourt, in an unprepossessing dark stone building, a French institution has a new address. The Guide Michelin had for decades been headquartered in the ultra-smart 7th arrondissement. But a few months ago, it packed up and moved out of Avenue de Breteuil, one of the most elegant streets in Paris, with its lawns, lime trees and direct view of the golden dome of the Hôtel des Invalides.

On the short walk from the Metro station to the new suburban office, I saw a small boy urinating in the street amid piles of rubbish, in the shadows of several grim-looking blocks of flats. It may have been unfortunate timing but it was difficult not to feel sympathy for the staff of the venerable “red book”—which remains, after more than a century of handing out and taking away good food stars, the arbiter of gastronomic excellence in France and beyond.

One person who won’t be visiting this new address is Jean-Luc Naret, who quit as director of the Guide Michelin in December. It’s almost impossible to imagine this flamboyant globetrotter making the trip every morning across the Parisian “frontier” of the périphérique ring road.

Naret himself says that his former co-workers at the world’s oldest restaurant guide are “not happy” about the relocation. In his first interview since leaving the publisher, he says he understands the necessity of the belt-tightening imposed by senior managers at Michelin, the tyre-maker that owns the loss-making guide. But he stresses that “obviously nobody is happy to leave a beautiful building in the 7th and to move outside Paris”.

Indeed it is in the smart centre of Paris that the company’s secretive network of restaurant inspectors typically operates, sampling the fastidious, some say fussy, food associated with Michelin stars. Many food critics grumble that this heavily stylized cuisine is outmoded. François Simon of Le Figaro, France’s most feared food critic, says: “For me it is something from another century. It goes back to a time when everybody was obeying the rules and the bourgeoisie. But today things are so different, that approach is really over.” He adds that “every time they make an award it doesn’t mean anything to me. I say, well, that’s interesting from a marketing point of view, but that’s it. Today people consider the table a place where they want to feel at ease, to be self-indulgent, to have sexy people, to have good food, life and interesting things. But not these very serious dishes and all those boring things. Each time I see a Michelin star in a small town I say, well, that’s a boring place, and it always is.”

Nevertheless, the award of Michelin stars can add up to 30 per cent to takings, according to restaurant owners. The wealth just isn’t shared by the Guide Michelin, which is hemorrhaging more than €15m annually. Accenture, the consultancy firm, was brought in last year and issued a dire warning: the company needed to change rapidly or risk becoming a ­forgotten relic in the digital age. A year later, Michelin is still pondering what to do. And seven months after Naret’s departure, it has yet to announce a new editorial director.

Michelin & Co was founded in 1889 by brothers André and Edouard Michelin, in the Auvergne region of central France. In 1900, the first Michelin guide was launched when it was handed out to chauffeurs of some of the 3,500 cars then on the road in France.

The company remained a staunchly family affair into the 21st century. But adding to current anxiety surrounding the “red book” is the fact that an outsider, Jean-Dominique Senard, is about to take the helm of the parent company for the first time. There are murmurs about the family’s displeasure with the tougher financial line being proposed for the guides, though their influence is not what it once was.

For Naret and others it is inevitable that Senard, a finance man to boot, could not share the family’s strength of feeling about the guide, which has been the recipient of unquestioned largesse in recognition of the publicity it brings to what one insider describes as a “boring old tyre company”, but also in recognition of the fierce protectiveness shown by the family toward their gastronomic “jewel”.

“There’s an awful lot of pride amongst the Michelin family,” says Peter Harden of the eponymous UK restaurant guide. “The red book ­transformed them into a pillar of the French community at a cultural level rather than merely an industrial one.”

The Michelin insider agrees, saying the guide, which is bought by more than 1 million people in its various international guises each year, “is bigger than any person, it’s a national treasure”.

But some wonder whether the management team running the tyre company has the same devotion to culinary excellence as the younger Edouard Michelin, the last holder of the famous surname to run the firm. Great-grandson and namesake of the co-founder, Edouard drowned in a fishing accident off the coast of Brittany in 2006 at the age of 42.

For Naret, who was recruited by Edouard after decades working in the hotel industry, this tragedy has fundamentally altered the relationship between the tyre company and the guide. “There is no Edouard Michelin any more,” he says. “His secret dream, he told me many times, was that he wanted to be an inspector … he was really passionate about food, passionate about restaurants, we used to talk about gastronomy all the time.

“Obviously now we don’t have anyone with the same spirit and at the same time the guide was carrying his name on the cover, which is obviously not the case any more,” adds Naret. “I would imagine there is a change taking place; developments that were brought in have stopped. A ­magazine we launched called Etoile, a beautiful magazine, was stopped.”

For its part, the current Michelin management team insists that fears about its stewardship of the guides are overcooked. Senard and Michel Rollier—the current boss of the tyre firm and a Michelin family cousin—fully appreciate the marketing “genius” behind André and Edouard Michelin’s 111-year-old idea, it says.

“One of the biggest assets of Michelin is the brand, so it is key,” says Claire Dorland-Clauzel, the Michelin executive in charge of international branding. “It is not a question of the financial background of Mr Rollier or Mr Senard [both former finance directors] or other things. They are both not only financial, they have an industrial background also and they have a global view. They are very careful about the brand. Without the brand, Michelin group is what? I can tell you that finances are not the only drivers for these two men.”

Naret and others also concede that Rollier should be applauded for turning round the fortunes of the parent company during his time in charge, carrying on a restructuring started by Edouard and instilling a sense of fiscal discipline.

Nevertheless, there has been a clear change in attitude towards the guide over the past few years, which some say helps explain the departure of Naret—even though he insists that he always intended to leave at the end of last year and had even considered leaving after the death of Edouard before being persuaded to stay by Rollier.

According to a person who knows the ­company well, there was a feeling that while the big-spending Naret had done a fine job expanding the guides into new international markets such as New York and Tokyo, he was a bit too “bling” for the stuffier types in Clermont-Ferrand, the tyre company’s home city in the Auvergne.

“Jean-Luc was different from the old Michelin inspectors,” the person says. “He was glamorous and international, a bit of a playboy even in his style of dress, so he was absolutely the opposite of the traditional approach of discretion above all things. But he did a great job, I think. First of all he internationalised the guide, and he also modernised it, opened it up to the world. He loved to talk, he had an enormous ego, he liked to be in the papers, but he was fun and sympathique too. But he was so over everything, so often in the papers, that I think it started to bother the top guys.”

There are rumours that Michelin’s new choice of editorial director is somebody from Clermont-Ferrand, possibly even someone from a tyre factory. To put a “tyre man” in charge of the famous old guide books would be a pretty remarkable change from Naret, who will take the reins of a luxury hotel group in Mauritius in August.

Michelin declines to comment on the identity of the replacement, saying that an announcement will be made in the next few weeks. It also defends the seven-month delay by arguing that it needed first to complete a bigger restructuring of the non-tyre businesses. It merged the company’s guides and maps business with its digital travel assistance division, a decision that it says also explains the move to the new suburban premises, where they will all be under one roof.

Michelin stresses though that when taken together, the maps, guides and digital businesses are profitable. But the losses incurred by the red books have become such a concern that Michelin has turned to outside consultants. Accenture looked last year at three different scenarios for the red books, including outright closure.

The nuclear option was quickly rejected, partly in recognition of the undoubted brand value of the guide but also because of the political impossibility in France of such drastic action. However, Accenture warned that to carry on with things as they are today would mean yearly losses at the guide hitting €19m by 2015, representing a cumulative loss of €70m over the next four years.

As a result, the consultants proposed a new business plan that would allow Michelin to make money by offering online “services” to the hotels and restaurants included in the guides.

The thinking seems to be that Michelin would do well to seek a share of the good fortune that its awards bestow on restaurants, possibly by creating a “red book” website that provides paid-for links for those establishments with Michelin stars and allows users to make online reservations.

The danger of such an approach is if it threatens the cherished independence of Michelin’s inspector system, particularly if restaurants without stars are allowed to buy into the online service—one suggestion made by consultants. Michelin has always made great play of the fact that there is no charge for entry in its pages, which means that it retains credibility.

While it appears happy to take on the chin the constant stream of criticism from Parisian food critics like Simon who say its innate conservatism has turned French cuisine into a museum piece—or the suggestion that its inspectors are awed by big-name chefs such as Gordon Ramsay and Alain Ducasse—it is much more sensitive when anyone questions its propriety.

And Michelin has been burnt in the past after it put out a favourable review of a Belgian restaurant even though it was shown later to have not yet opened. A tell-all book by a disgruntled inspector in 2004 alleged that his former colleagues, who work incognito, sometimes play favorites with chefs and do not always visit reviewed restaurants as often as they say. (Michelin inspectors, of whom there are 90 worldwide, visit each premises once every 18 months—more frequently if the quality of food is seen to be improving or worsening.)

Dorland-Clauzel, the Michelin executive, indicates that the possibility of offering services may be considered, though it is too early to say how this might work. But she insists that “the independence and autonomy of how we select restaurants is going to continue, it is key. We will not compromise this … People think we are honest and they trust that.”

The big problem for Michelin, as for all publishing companies, is how to make money from the internet as younger people shun their heavy guide books and flock instead to online sites such as ­toptable.com with their constantly updated, user-generated reviews. While Michelin has developed an app for the iPhone, the guide itself has a limited online presence—found by trawling through ViaMichelin.com, a complicated travel itinerary service.

For Naret this failure to create a “beautiful” red book website is a source of great frustration. “The internet was one of my biggest battles over the last seven years,” he says. “I remember before I left in December having the same conversation about it with the same people who were in charge seven years ago and they still didn’t understand what the Michelin guide was all about. Obviously something is wrong there.”

In response, Dorland-Clauzel acknowledges that “we have to move, for sure, but we have started to do that.” Harden also defends his rival, admitting that “if you look at all of the brands that have authority offline, none of us has really discovered a brilliant online business model, because nothing really works with all that free stuff out there”.

Better news for devotees of the red book’s star-system is found in a separate internal study carried out for those now running the company, who wanted to know just how much all that Guide Michelin publicity was worth to the bread and butter business of selling tyres. The study shows that the presence of Guide Michelin in a country means people are up to 3 per cent more likely to buy its tyres. With €5bn of tyre sales in the first three months of this year alone, these are figures to be taken seriously. Certainly, defenders of the faith are eager to stress the huge amount of “buzz” every time a guide is launched or Michelin starts covering a new city.

“When we launched in Tokyo, there were 150 people at the press conference, and 12 hours of prime-time TV and interviews,” says Naret. “That was really very clever in front of Bridgestone [a big tyre-making rival] in their home town, and this is the basic idea behind the guide going back to when it was launched more than 100 years ago.”

While the company has been forced to close the Guide Michelin in Austria, Los Angeles and Las Vegas, the belief remains that new books could help it crack crucial tyre markets such as China and Brazil.

One thing, however, is certain. Whatever changes are decided upon by Senard as he gradually takes control, he will want to make sure that the cherished red book does not become a rallying point for disgruntled Michelin family members.

Dorland-Clauzel claims that the family now owns only about 3 per cent of Michelin, though some industry analysts believe this is closer to 10 per cent and she declines to say how many of the voting rights they control. “A lot of people think it is a family-owned company, but it is not at all, not for a long time. It is in terms of values, which are very strong and important, but not in terms of ownership.”

Nevertheless, given the Guide Michelin’s heritage in France and the cultural and political clout it bestows on those bearing the name, it would be foolish to ignore their views entirely. For now the family is keeping its counsel, but the person who knows the company well says “everybody has heard that they are not happy [about the more financial approach] … I think they [the Michelins] still love the guide. What industrial company has such a powerful communications tool? I’m not sure such a thing exists.”

This article originally appeared in Financial Times. Click here to read more coverage from the Weekend FT.