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Speaker 1: This is Masters in Business with very Ridholts on Bloomberg Radio. Hey,

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Speaker 1: it's an extra special edition of Masters in Business. It's

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Speaker 1: our Shelter in Place version of Good Friday. What we

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Speaker 1: thought might be interesting to do was to reach out

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Speaker 1: to a number of people in a variety of different

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Speaker 1: fields and see if we could have a conversation about

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Speaker 1: how the pandemic is affecting them in their business. So

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Speaker 1: we spoke to a number of people, a real estate attorney,

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Speaker 1: and meat purveyor and economist, a variety of folks who

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Speaker 1: all explained how life has changed under the Shelter in

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Speaker 1: Place provisions. Some of the things we talked about were

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Speaker 1: really amazing and unexpected. Everybody is doing what they can

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Speaker 1: to get by. Everybody's trying their best to get through

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Speaker 1: what is obviously a difficult situation. And there is a

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Speaker 1: lot of ingenuity and a lot of creativity, and a

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Speaker 1: lot of people working to keep the gears of commerce moving,

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Speaker 1: to keep food and essential services flowing. I think you'll

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Speaker 1: find some of this quite fascinating. Some of it is

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Speaker 1: very amusing. So, with no further ado, our special Shelter

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Speaker 1: in Place Masters in Business. This is Masters in Business

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Speaker 1: with very Ridholts on Bloomberg Radio. You're listening to a

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Speaker 1: special Shelter in Place, Good Friday edition of Masters in Business.

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Speaker 1: We thought, given the circumstances of everybody being forced to

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Speaker 1: work from home if you're not in the medical field

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Speaker 1: or providing some other essential services fire, police, grocery, what

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Speaker 1: have you, everybody is trying their best to adapt to

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Speaker 1: these circumstances, and I thought it might be interesting to

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Speaker 1: talk to some people and find out how they are

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Speaker 1: adjusting to these currents. And so my first guest today

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Speaker 1: is Daniel Gershberg. He is a real estate attorney at

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Speaker 1: Roma Devas working in Manhattan and Brooklyn. Daniel Gershberg, normally

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Speaker 1: I would say Walton's Bloomberg, but welcome to wherever you are.

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Speaker 1: Sheltering in Place. Yes, thank you so much for the

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Speaker 1: distraction barrier, and thank you for having me so so, Daniel,

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Speaker 1: tell us a little bit about your practice under normal circumstances.

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Speaker 1: So under under a good month or a good day,

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Speaker 1: I primarily practice in real estate transaction real estate someone

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Speaker 1: buys someone's elves, and also consumer bankruptcy. So for the

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Speaker 1: most part of the last i'd say five or six years,

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Speaker 1: the majority of that was obviously devoted to to real estate.

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Speaker 1: The market UM was doing incredibly well. Uh And so

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Speaker 1: you know I would be involved in closing transactions. Someone's

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Speaker 1: buying a place, so I'd get the closing or negotiating contract.

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Speaker 1: I'd have, for instance, a desk in computers and a

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Speaker 1: working for system, and I plod through those things UM

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Speaker 1: with brokers do normal, normal things during the name. So

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Speaker 1: were you you live in Brooklyn? Were you going into

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Speaker 1: Manhattan on some days? Most days old days? I had

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Speaker 1: my own firm for about twelve years before emerged was

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Speaker 1: Rummer Divas a couple of years back, and I was

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Speaker 1: working very close to home in Brooklyn. Many of my

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Speaker 1: clients are based in Brooklyn, and so I didn't want

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Speaker 1: to commute. Uh. And so I had an office in Brooklyn.

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Speaker 1: About a year or so ago. I began UM going

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Speaker 1: into the main office on Madison Avenue. And for the

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Speaker 1: past year or so, i'd say four and there was

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Speaker 1: five days UM i'd be in the city working from

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Speaker 1: that office base itself. And Brooklyn was afterthought. I've lived

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Speaker 1: now for about three or four years in Williamsburg, Brooklyn

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Speaker 1: as well. So I live in and work there and breathing.

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Speaker 1: So Williamsburg is a very hot neighborhood in Brooklyn for

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Speaker 1: people were not familiar with it. A lot of condos

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Speaker 1: and co ops, prices have gone up, a time of

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Speaker 1: transactions have been taking place there until I'm gonna guess

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Speaker 1: about a month ago. How has the practice of real

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Speaker 1: estate law changed in this current environment? You know, I

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Speaker 1: was practicing UM during two thousands where the market just

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Speaker 1: sell UM. The market has essentially just stopped and any

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Speaker 1: deals that were in contract, and again us this anecdotally.

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Speaker 1: You can speak to other attorneys, maybe they have a

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Speaker 1: different feel for it, but any deals that are in

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Speaker 1: contract literally just time stopped. People are in near going

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Speaker 1: through the contracts themselves, or they're taking a pause, they're

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Speaker 1: renegotiating the prices UM and deals that are currently in contract.

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Speaker 1: You know, when I represent a seller and the sellers

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Speaker 1: are calling me and I'm having more zoom calls than

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Speaker 1: I ever want to have in my entire life, where

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Speaker 1: the sellers are calling me and saying, how do we

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Speaker 1: make this deal happen? And on the flip side, my

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Speaker 1: buyers are calling me and saying how do I get

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Speaker 1: out of this thing? And so real estate just yeah,

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Speaker 1: on on a sort of a large your level Brooklyn right,

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Speaker 1: and again across New York City as well. We're in

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Speaker 1: this sort of unstarted territory right now where um, frankly,

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Speaker 1: there aren't any easy answers, and so people are trying

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Speaker 1: to get out of deals. And and that's where I

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Speaker 1: think of my day is right now, is navigating the

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Speaker 1: ability for someone to get a better price, get out

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Speaker 1: of a deal, or in the seller's side, to stay

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Speaker 1: in the deal itself. So let's talk about the other

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Speaker 1: aspect of your practice, which is Chapter seven and thirteen

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Speaker 1: bankruptcy filings to discharge consumer debt. I'm going to ask

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Speaker 1: you to I'm going to ask you to look forward

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Speaker 1: and imagine that this goes on for two four eight

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Speaker 1: weeks longer before things normalize. What happens in the consumer

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Speaker 1: realm with people carrying credit card debt and auto loans

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Speaker 1: and perhaps even mortgage debt if they lose some or

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Speaker 1: all of their income, either temporarily or comin in what

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Speaker 1: what is on consumer debt world looking like three months

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Speaker 1: from now, I'm going to go out in a limb.

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Speaker 1: And as my wife often reminds me, I'm wrong. Most

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Speaker 1: of the time, I will say that I think Congress

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Speaker 1: has to deal with this in a particular way because

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Speaker 1: I think that, um, you're looking at a deluge of

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Speaker 1: cases that the courts may not be able to handle.

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Speaker 1: So bankruptcy to a certain extent is trailing. You don't

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Speaker 1: file for bankruptcy is the first thing you do. You

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Speaker 1: file for bankruptcy is the last thing. You pay your

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Speaker 1: credit card minimums. You try your best to negotiate with

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Speaker 1: your creditors, You do everything you can because there's a

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Speaker 1: stigma attached. So people will be filing two months from

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Speaker 1: now or three months ago. Remember there's in New York

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Speaker 1: there's a moratory amount evictions and from closures for at

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Speaker 1: least three months, so people are going to sort of

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Speaker 1: stay in place, right, No one's gonna be thinking this way.

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Speaker 1: I think what you'll see is if this continues for

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Speaker 1: let's say three or four or five months, then you

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Speaker 1: begin to see people filing because frankly, they won't have incomes. Um,

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Speaker 1: they won't be able to make And remember again, O,

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Speaker 1: wait was about people not being able to make their

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Speaker 1: mortgage things. Now you have people that can't make their rent,

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Speaker 1: and you you're bringing in this other section of the workforce,

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Speaker 1: and that wasn't there before. You're gonna have a large

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Speaker 1: number of cases. You're gonna have people that are living

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Speaker 1: off of credit cards for a period of time. You're

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Speaker 1: gonna have people that are taking personal loans or cashing

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Speaker 1: out there for one case or getting for one K

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Speaker 1: loans to the extent that they can. And then once

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Speaker 1: all of that stops and they can't take any more

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Speaker 1: credit out from anywhere else, only then do they come

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Speaker 1: to have this sort of come to Jesus moment where

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Speaker 1: they say, oh my God, I think I have to

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Speaker 1: file for bankruptcy, right, And so I would say, trailing,

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Speaker 1: you're looking at it rather than three months, you're looking

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Speaker 1: at six to seven months from now. But I think

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Speaker 1: you're gonna have an enormous number of cases. And I

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Speaker 1: say this, I know it sounds ridiculous because you know,

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Speaker 1: obviously in self interest, more clients is more money that

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Speaker 1: comes in. I don't even want this. Um. You hear

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Speaker 1: these worries sometimes of these people, and and Oheed O

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Speaker 1: nine really changed me in a lot of respects. Um,

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Speaker 1: I would rather people not filing and and there'll sort

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Speaker 1: of be a way out because the emotional toll that

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Speaker 1: this takes on people. Um is underappreciated when it comes

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Speaker 1: to a lot of this stuff. So I think if

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Speaker 1: you see anything, it's gonna be again half a year

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Speaker 1: from now. But I'm hoping that Congress sort of brings

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Speaker 1: some relief even within the laws themselves. Let's talk a

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Speaker 1: little bit about life in a Brooklyn apartment. I'm assuming

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Speaker 1: you're not on a a three thousand square foot giant apartment.

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Speaker 1: You're in a fairly normal Williamsburg um apartment. Are you

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Speaker 1: in a condo or a coh So I'm in a condo.

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Speaker 1: I'm a renter in the condo, and by fairly normal.

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Speaker 1: Just to give your audience some ideas to why it's

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Speaker 1: resiuleous to live in the city. Um, I am in

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Speaker 1: square foot which is big for the purposes of New

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Speaker 1: York and a garage for the rest of the country.

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Speaker 1: Squarefoot apartment UM with my wife, my almost three year

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Speaker 1: old son, and a newborn daughter, which again really really

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Speaker 1: great prior to a pandemic, as well as a seventy

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Speaker 1: pound English bulldog. UM. So I try my best to

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Speaker 1: leave that apartment as much as I can, then work

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Speaker 1: out of my car downstairs. Your no, I kid you,

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Speaker 1: not my my office. I have no problem deducting anything

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Speaker 1: regarding my car, my taxes this year my car. I

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Speaker 1: have a Nissan path funding that I that I that

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Speaker 1: I got this year at least it, and I worked

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Speaker 1: six hours a day out of this vehicle, because to

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Speaker 1: try and get anything done in what is basically an

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Speaker 1: insane asylum upstairs is impossible. I have one area of

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Speaker 1: that apartment, which is my wife's closet um that I

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Speaker 1: work out of sometimes, and I literally put a laptop

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Speaker 1: on the footstool and close the door so there's no

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Speaker 1: light anywhere there because if there's light, my sun will

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Speaker 1: will rip the door open. So I'm two minutes away

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Speaker 1: from a quill pen and a candle UM. So most

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Speaker 1: of the stuff that that I do is is running

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Speaker 1: downstairs taking calls UM, doing zooms again UM, and sending

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Speaker 1: emails out from from my car. Is that where we're

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Speaker 1: speaking to you right now? From your Nissan pathfinder. I

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Speaker 1: am in my Niecean pathfinder as we speak, as as

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Speaker 1: I like to say, my remote office, which see do

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Speaker 1: you win? I'm trying to picture this. I So I'm

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Speaker 1: in the driver's seat because God forbid the cops were

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Speaker 1: to pull up. If I'm double parked or by hydrant,

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Speaker 1: I would be able to to move and continue my

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Speaker 1: zoom call. I would search the audio only, or I

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Speaker 1: would stop the video itself. Um. Occasionally, when I need

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Speaker 1: the laptop, I will go to the back seat. The

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Speaker 1: pathfinder is wonderful and that there's there's a three row

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Speaker 1: capacity here. Um. So I can basically go to the

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Speaker 1: third road to take a nap if I need to.

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Speaker 1: I haven't done that as of yet, Barry, but this

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Speaker 1: is this is where my career has taken me. So so,

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Speaker 1: I lived in the city for a long time. I

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Speaker 1: lived on Lexon and St. And I remember what a

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Speaker 1: pain it was dealing with parking. But I have to

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Speaker 1: imagine that the New York City Traffic Enforcement Division, in

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Speaker 1: the midst of a pandemic of which New York State

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Speaker 1: is a hot spot and New York City is the

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Speaker 1: hottest hot spot within New York State, have eased up

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Speaker 1: on that sort of stuff. Are you Are you telling

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Speaker 1: me alternates out of the street parking is still in effect. No,

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Speaker 1: we're good. I'm just neurotic and I don't want to

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Speaker 1: take it, even through a pandemic. Itself and has nothing.

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Speaker 1: No one wants to get close to anyone Barry. So

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Speaker 1: I'm working. Yeah, so I'm just interest me being theronic. Alright,

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Speaker 1: So you're sitting in your front seat of the Pathfinder.

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Speaker 1: You tell me a little bit about the technology you

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Speaker 1: use to do your job. What what are you working with,

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Speaker 1: and how are you communicating with clients and others? They

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Speaker 1: sort of variety of sort of things. But obviously I'm

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Speaker 1: taking calls on my iPhone. I'm zooming, doing the zoom calls,

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Speaker 1: which to become this this new thing with with my

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Speaker 1: elephone as well most of my files of course it's

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Speaker 1: on a dropbox. I have access to those as well. Look,

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Speaker 1: I've been remote and virtual for for a number of

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Speaker 1: years prior to that, just because of again going from

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Speaker 1: Brooklyn to the city and having two offices. So it

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Speaker 1: hasn't really been that bad. The problem is you can't

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Speaker 1: get a lot of work done um in the car itself.

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Speaker 1: When you have to send emails out. I literally go

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Speaker 1: up to the apartment, um when I know my son

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Speaker 1: is either taking a nap or my wife has them

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Speaker 1: in a different room, and I will hyper focus on

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Speaker 1: sending an hour sort of email out um. In that closet,

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Speaker 1: I mentioned that I have a newborn as well, So

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Speaker 1: at some ungodly hour of let's say three thirty in

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Speaker 1: the morning, when when my daughter is up, I'm also

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Speaker 1: um as i'm as I'm feeding her, um sending out

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Speaker 1: emails from the living room itself. So I leverage as

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Speaker 1: much as anyone can at this point, my MacBook, my

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Speaker 1: iPhone and everything else. Just to again this is you know,

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Speaker 1: I'm not thriving just to survive. And I think what

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Speaker 1: you're really seeing, to be honest with you, uh, maybe

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Speaker 1: it's a left or interest in extent is every lawyer

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Speaker 1: is dealing with the same thing, or every person I'm

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Speaker 1: dealing with is doing the same thing. That famous skit

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Speaker 1: where the guys giving an interview and his two kids

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Speaker 1: running behind him. That's just that's just everyone these days.

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Speaker 1: So you don't feel weird about it. Uh, you don't

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Speaker 1: feel weird about someone showing up with a sweatshirt on

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Speaker 1: on the video on zoom because you know that they're

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Speaker 1: going through the same hell that you're going through on

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Speaker 1: the daily BA which is good. That was a BBC

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Speaker 1: broadcaster whose son came running into the room during a broadcast.

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Speaker 1: He subsequently brought the whole family and during the the lockdown,

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Speaker 1: and nobody even nobody even thought twice about it. So,

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Speaker 1: so if you're using you're using a laptop in the car,

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Speaker 1: are you using any sort of jet pack or or

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Speaker 1: WiFi connection to the laptop or you just using your

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Speaker 1: iPhone as a as a connection or do you not

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Speaker 1: need that? You just use the iPhone for the Zoom

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Speaker 1: conferences and you could deal with the laptop when you

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Speaker 1: get back up to the to the apartment. I try

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Speaker 1: my best to to separate those two things, because the

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Speaker 1: second I do listen, my life resembles that of Larry

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Speaker 1: David quite often. So the last thing I need to

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Speaker 1: do is try and connect the hot spot, and I'm

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Speaker 1: connected to someone else's WiFi and not this virus. I

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Speaker 1: try my best to separate and do the iPhone thing.

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Speaker 1: I have brought the laptop down, used it as a

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Speaker 1: hot spot. You know, sometimes it's better than others. Sometimes

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Speaker 1: emails are unfortunately go out very quickly. Um but I

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Speaker 1: try and make it so that if I need to

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Speaker 1: send that emails, I'm running upstairs to I can't believe

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Speaker 1: I'm saying this on the radio. Interview to my wife's closet,

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Speaker 1: and um, the rest of the time, I'm in my car, uh,

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Speaker 1: doing calls and everything else on my iPhone and zoom

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Speaker 1: on my own phone himself. So, so I'm picturing a

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Speaker 1: street in Williamsburg with all these high rise condos and

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Speaker 1: rows of cars parked. Are you the only person sitting

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Speaker 1: in your car or do you see dozens of other

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Speaker 1: people operating similarly? I am I am probably the only

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Speaker 1: person sitting in their car. Half of this neighborhood has

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Speaker 1: fled um to God knows where to second homes that

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Speaker 1: I don't have to their parents place. And my mother

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Speaker 1: lives in Miamily, my hives pens live in Europe, so

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Speaker 1: we don't we don't have that option. Um. So there's

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Speaker 1: no one in any cars really other than me. Um.

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Speaker 1: I see sometimes the same cops going around and the

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Speaker 1: same sort of people going around and walking their dogs

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Speaker 1: and everything else. There's there's really not a lot of

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Speaker 1: traffic in the street itself, So if you want to

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Speaker 1: picture it, it's it's really just me running a vehicle

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Speaker 1: inside a vehicle it self, doing some calls, sometimes with

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Speaker 1: the windows open when when the weather actually allows me.

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Speaker 1: Thank you. Daniel Gershberg of Rumor dubas real estate and

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Speaker 1: bankruptcy attorney, My next guest on our special Good Friday

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Speaker 1: edition of Shelter in Place, Masters in Business is a

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Speaker 1: former m IB guest, Joe Davis. He is the chief

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Speaker 1: economist and investment giant Vanguard, and I was surprised to

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Speaker 1: learn that he is considered essential person l during a pandemic.

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Speaker 1: Joe Davis, are you not sheltering at home? Are you

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Speaker 1: actually in the Vanguard office? Uh? Hi, very thanks for

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Speaker 1: having me. I am, although we uh, you know, for

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Speaker 1: for some time, we've taken UM, uh you know, pretty

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Speaker 1: pretty significant steps. I'm I'm the only one on my

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Speaker 1: floor here, uh, in the building uh that I work

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Speaker 1: at UM, you know, because I'm a part of the

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Speaker 1: investment management group. UM. There's just very select personnel that

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Speaker 1: UM maybe either in the building or and and what

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Speaker 1: we call hot sites. So it's UM in one sense.

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Speaker 1: Even though I'm I'm in the office, I'm actually alone.

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Speaker 1: So it's uh, and you know, it's a question in

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Speaker 1: my office where I can close the door. So it's

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Speaker 1: the it's pretty much an isolated environment. Any meetings that

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Speaker 1: we're having, clearly our our video, um even for a

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Speaker 1: certain career that maybe on campus, which is, you know,

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Speaker 1: fairly few. So so let me paint a little bit

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Speaker 1: of a picture for those people who have never made

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Speaker 1: it to the enormous campus that Vanguard has uh in Malvern, Pennsylvania.

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Speaker 1: It is like a college campus with lots of three

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Speaker 1: story brick buildings and here's a conference center, and there's

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Speaker 1: an auditorium over there, and here's a parking garage, and

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Speaker 1: it goes on for it feels like thousands of acres.

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Speaker 1: I don't know if I'm overstating it, but it's like

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Speaker 1: a giant, thousand student campus. And when I've been there

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Speaker 1: many times. When you're there, there are cars coming and

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Speaker 1: going and people walking around, and offices filled with people,

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Speaker 1: and um various conference rooms and public facilities. It's a

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Speaker 1: small city kind of in the woods of Pennsylvania. Is

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Speaker 1: is that a fair description? Yeah, Berry, it is. I mean,

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Speaker 1: it's it's it's actually a beautiful campus. We're in the suburbs,

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Speaker 1: about a half power from Philadelphia Airport. So so given

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Speaker 1: that this is normally a bustling city, how different is

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Speaker 1: it today? When you walk in? Is it like a weekend?

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Speaker 1: Is it how do you compare what you're experiencing today

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Speaker 1: compared to the normal day to day operations of Vanguard. Yeah,

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Speaker 1: I mean I think it's for uh, you know, for

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Speaker 1: for for for I would imagine it feels similar to others, uh,

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Speaker 1: in other industries maybe around the country. UM, you know,

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Speaker 1: you're you at best, it feels like a weekend. Although

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Speaker 1: I can see the highway from from my building, UM

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Speaker 1: and you know, very little traffic. UM, so even that

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Speaker 1: seems really out of place. UM, you know, but I

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Speaker 1: think for you know, if I I lead a group

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Speaker 1: of roughly sixty employees around the world, UM, I think

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Speaker 1: the what we're fortunate is that we can do our

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Speaker 1: jobs pretty much anywhere in the world. We have wonderful technology. UM.

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Speaker 1: We're continuing to operate day to day as if it's

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Speaker 1: best you can, as if uh, you know, we didn't

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Speaker 1: have this, um, you know, unfortunate health crisis. UM. But

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Speaker 1: you you try to you know, I think I think

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Speaker 1: many of my team it's just trying to balance what

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Speaker 1: goes on in your personal life with your work life,

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Speaker 1: even more so because you're you're often you know, at

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Speaker 1: home trying to navigate you know, those those two uh,

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Speaker 1: you know those two worlds. You know, I'm isolated here. UM.

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Speaker 1: So again, even if you have a meeting with someone

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Speaker 1: else who may be in a different building, which again

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Speaker 1: are few, and where they're or they're at home, we're

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Speaker 1: just operating all Microsoft teams. And UM, it's been a

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Speaker 1: it's been a real benefit. UM. You know, you get

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Speaker 1: out some of the cadence, UM, you know, some of

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Speaker 1: your habits. UM. But it's I've actually been pleasantly surprised, um,

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Speaker 1: how productive you can be. UM. You know, if you

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Speaker 1: have access to to really good technology into the you know,

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Speaker 1: the information you need to do to do your job.

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Speaker 1: You're telling me that a constant stream of people walking

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Speaker 1: into your office to interrupt you with questions or issues

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Speaker 1: or things somehow reduces your productivity. Is that what the normal, uh,

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Speaker 1: the normal workflow is is? Yeah, well, I tell you

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Speaker 1: know what that what that has been challenging is just

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Speaker 1: keeping up with just the rapidity of events. And again

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Speaker 1: we've we've been watching the the unfolding of this of

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Speaker 1: this unfortunate health crisis. UM, you know, since since December thirtieth.

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Speaker 1: I recall that in China because I recall that because

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Speaker 1: it was my birthday. And you know we we've been

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Speaker 1: you know, using alternative data sources for years and particularly

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Speaker 1: applied them in this situation. And it's um, you know,

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Speaker 1: I'm spending just as much time uh thinking about um,

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Speaker 1: you know, what potential additional solutions we may need unite

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Speaker 1: day from a policy perspective, um, you know, in terms

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Speaker 1: of a public service, as much as I am importantly

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Speaker 1: thinking about the economic conditions and what that may mean

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Speaker 1: for the markets over the coming months and years. So

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Speaker 1: I spend a lot of time with that, with some

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Speaker 1: of my colleagues of Vanguard, you know, to try to

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Speaker 1: help policymakers because because I think we're gonna need additional

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Speaker 1: firepower applied to the situation. Joe, Let's talk a little

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Speaker 1: bit about the impact so far of the coronavirus. We

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Speaker 1: saw the initial unemployment claims two weeks ago at about

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Speaker 1: four million new job losses. This past week it was

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Speaker 1: six million. God knows what we're gonna get uh the

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Speaker 1: week of April five already ten million job losses. That's

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Speaker 1: more than we lost in the entire financial crisis of

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Speaker 1: oh eight oh nine. How significant is the labor market

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Speaker 1: damage today, Well, it's it is pretty significant barry and

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Speaker 1: we're not I don't think we're I don't think we've

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Speaker 1: seen the worst of it, not uh necessarily, which is unfortunate. UM,

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Speaker 1: and I really my heart goes out. In fact, I

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Speaker 1: have a family uh and friends who have who had

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Speaker 1: to go on unemployment insurance. So it's, um, I mean,

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Speaker 1: it's it's it's one of the sigma it's it's certainly

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Speaker 1: we were projecting over over a month ago and yet

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Speaker 1: we've had the revisor estimates. Um, it's it's the worst

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Speaker 1: single quarter in terms of a rate of a change,

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Speaker 1: a deterioration of labor market that that I think is

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Speaker 1: ever on record. Um, you know, I think it's. Uh,

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Speaker 1: it may not be we may not get to unemployment

402
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Speaker 1: rights there that worth highs the Great Depression, although that

403
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Speaker 1: played out over you know, three or four years. This

404
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Speaker 1: is playing out in a matter of weeks and months,

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Speaker 1: and so it's been a significant uh reversal in conditions. Again,

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Speaker 1: it gets back to this, there's just a vacuum of

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Speaker 1: cash flows for many businesses across the entire economy, and

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Speaker 1: which which is why it's important to to really try

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Speaker 1: to arrest that. But it's it's, Um, you know, it's

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Speaker 1: most sectors are are impacted, and it's so it's broad based,

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Speaker 1: it's significant, and it's been fast, and UM, you know

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Speaker 1: we will. We are expecting at least five million uh

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Speaker 1: additional job losses just from the just from the job's

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Speaker 1: report UM over the next month. UM. I think we're seeing,

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Speaker 1: you know, additionally, we are seeing claims UM elevated a

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Speaker 1: little bit. UM. I don't mean to dismiss them, but

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Speaker 1: they are elevated a little bit because the Cares act

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Speaker 1: U makes unemployment benefits a little bit more generous and

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Speaker 1: has changed some of the criteria by which you can

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Speaker 1: qualify for unemployment insurance. It's to be very positive from

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Speaker 1: A from A for the that have been affected right

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Speaker 1: in terms of their job. But that is leading to

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Speaker 1: even additional uh increasing claims over and above just those

424
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Speaker 1: losing their job. So it's um. But it's I mean,

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Speaker 1: it's I didn't think I might I would be in

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Speaker 1: a place of my career where I'm projecting GDP declines

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Speaker 1: as as large as we are and job losses as

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Speaker 1: high as they are, and yet worrying that perhaps uh,

429
00:24:28,040 --> 00:24:32,480
Speaker 1: we don't, perhaps there are actually too optimistic. So I

430
00:24:32,600 --> 00:24:35,680
Speaker 1: know most economic data comes out with a bit of

431
00:24:35,720 --> 00:24:39,280
Speaker 1: a lag. You're always looking backwards that would just occurred.

432
00:24:39,800 --> 00:24:43,480
Speaker 1: But I keep hearing anecdotally that people who have been

433
00:24:43,520 --> 00:24:47,480
Speaker 1: trying to file claims for unemployment they can't get through

434
00:24:47,480 --> 00:24:52,000
Speaker 1: on the phones, the websites crashing. I'm curious how accurate

435
00:24:52,119 --> 00:24:55,800
Speaker 1: is the data as to the true state of the

436
00:24:55,880 --> 00:24:59,960
Speaker 1: labor market damage? Are things worse than the official data

437
00:25:00,080 --> 00:25:04,240
Speaker 1: UH states or is it possible that we're just not

438
00:25:04,359 --> 00:25:08,399
Speaker 1: keeping up with of the new job losses? Well, I

439
00:25:08,760 --> 00:25:10,879
Speaker 1: think it is. I mean again, we're going to have

440
00:25:10,920 --> 00:25:12,960
Speaker 1: a lag, there's no doubt about that, Barry. But we're

441
00:25:12,960 --> 00:25:16,200
Speaker 1: trying to triangulate. When you triangulate on I think we're

442
00:25:16,240 --> 00:25:19,000
Speaker 1: real time data, and we were doing this in China

443
00:25:19,040 --> 00:25:21,400
Speaker 1: and doing it for Europe as well as the United States.

444
00:25:21,440 --> 00:25:24,200
Speaker 1: When you look at I don't know the usage of

445
00:25:24,200 --> 00:25:26,920
Speaker 1: of of credit cards, when you look at Google searches

446
00:25:27,040 --> 00:25:29,919
Speaker 1: of of certain keywords, we were tracking that over a

447
00:25:29,960 --> 00:25:33,040
Speaker 1: month ago. We started with airline cancelations, and now you

448
00:25:33,080 --> 00:25:40,160
Speaker 1: look about unemployment search activity, it tends to correspond, uh,

449
00:25:40,240 --> 00:25:43,159
Speaker 1: you know with our economic outlook, which is which is

450
00:25:43,200 --> 00:25:46,119
Speaker 1: really called for a significant fall um, not only for

451
00:25:46,160 --> 00:25:48,399
Speaker 1: the past quarter which just ended, but for the for

452
00:25:48,440 --> 00:25:52,040
Speaker 1: the second quarter. UM. So, I I think you know,

453
00:25:52,040 --> 00:25:54,040
Speaker 1: when you when you look at the distillation of of

454
00:25:54,160 --> 00:25:58,200
Speaker 1: information and as well some more high frequency UH data,

455
00:25:58,240 --> 00:26:01,160
Speaker 1: I think it. I think it's generally assistant with the headlines,

456
00:26:01,200 --> 00:26:04,760
Speaker 1: which are not you know, which are concerning UM. You know.

457
00:26:04,920 --> 00:26:06,960
Speaker 1: I think though, I will tell you is that we

458
00:26:07,359 --> 00:26:12,320
Speaker 1: do see as our baseline UM conditions stabilizing and then

459
00:26:12,359 --> 00:26:15,879
Speaker 1: modestly approving as we get to the back half of

460
00:26:15,920 --> 00:26:20,520
Speaker 1: the year. Now that rests largely on the big assumption UM,

461
00:26:20,560 --> 00:26:23,560
Speaker 1: which which we still have as as our most likely outcome,

462
00:26:23,600 --> 00:26:26,479
Speaker 1: that at some point this year these needs for shelter

463
00:26:26,520 --> 00:26:31,520
Speaker 1: in place UM dissipate over time. But that's really the

464
00:26:31,600 --> 00:26:35,439
Speaker 1: key variable is really is the health variable more so

465
00:26:35,520 --> 00:26:39,320
Speaker 1: than the economic one. Let me ask you a more

466
00:26:39,359 --> 00:26:42,800
Speaker 1: speculative question that that requires you to use a little

467
00:26:42,840 --> 00:26:47,399
Speaker 1: bit of your imagination. This has obviously been a wrenching

468
00:26:47,760 --> 00:26:54,359
Speaker 1: and unprecedented experience for everybody who's been involved. What sort

469
00:26:54,400 --> 00:27:00,000
Speaker 1: of lasting changes are going to come to the economy,

470
00:27:00,080 --> 00:27:04,679
Speaker 1: how business is conducted. Just look across the board, UH,

471
00:27:04,840 --> 00:27:09,560
Speaker 1: service sector, real estate, labor. How is the world changed

472
00:27:10,200 --> 00:27:14,640
Speaker 1: on a permanent basis by the coronavirus. What's a really

473
00:27:14,640 --> 00:27:16,960
Speaker 1: good question, Barry. You know, I think when I when

474
00:27:16,960 --> 00:27:21,119
Speaker 1: I study world history, what at least what I've learned

475
00:27:21,200 --> 00:27:25,399
Speaker 1: is that when there's profound shocks and crises, UM, it

476
00:27:25,520 --> 00:27:29,360
Speaker 1: could be war, there's certainly economic shocks. And this clearly qualifies.

477
00:27:30,080 --> 00:27:33,280
Speaker 1: It usually does two things. One is it accelerates a

478
00:27:33,359 --> 00:27:37,360
Speaker 1: trend that was already in place before the shock began. UM.

479
00:27:37,480 --> 00:27:42,280
Speaker 1: And then secondly, UM, there are typically i'll call them

480
00:27:42,320 --> 00:27:45,440
Speaker 1: social or political reactions to very shock itself. So let's

481
00:27:45,440 --> 00:27:47,760
Speaker 1: take the first one. I mean, I think things that

482
00:27:47,800 --> 00:27:51,680
Speaker 1: we were already seen, you've talked about and documented uh

483
00:27:52,160 --> 00:27:55,280
Speaker 1: in a number of times. I think both the need

484
00:27:55,440 --> 00:27:58,520
Speaker 1: for UM, I think a revisit of some aspects of

485
00:27:58,560 --> 00:28:01,080
Speaker 1: the global supply chain will be in order, and I

486
00:28:01,080 --> 00:28:04,320
Speaker 1: think we may we may see more serious conversations of

487
00:28:04,320 --> 00:28:08,840
Speaker 1: that from a risk perspective, UM, meaning you know, these

488
00:28:08,840 --> 00:28:12,199
Speaker 1: shocks may occur every so often, and so from we

489
00:28:12,240 --> 00:28:16,440
Speaker 1: may see more supply chain changes than we did UH

490
00:28:16,640 --> 00:28:20,240
Speaker 1: from the trade war. Explain that a moment, how might

491
00:28:21,040 --> 00:28:24,320
Speaker 1: the supply chain shift? Are you referring to the just

492
00:28:24,480 --> 00:28:28,840
Speaker 1: in time delivery system or yep, yep, I think, I

493
00:28:28,880 --> 00:28:30,760
Speaker 1: think so, I mean, you know, you know it's been

494
00:28:30,800 --> 00:28:34,040
Speaker 1: it's been hugely UH. There's been a number of positive

495
00:28:34,040 --> 00:28:37,119
Speaker 1: economic benefits of just in time. But you know, because

496
00:28:37,160 --> 00:28:40,160
Speaker 1: when when when when the industrial economy, when the whole

497
00:28:40,320 --> 00:28:43,120
Speaker 1: broad based global economy runs so lean for lack of

498
00:28:43,160 --> 00:28:46,200
Speaker 1: a better word, there is a risk of that, the

499
00:28:46,280 --> 00:28:48,120
Speaker 1: risk of that as you don't have capacity in the

500
00:28:48,200 --> 00:28:51,280
Speaker 1: system or um. And we've seen these shocks before, but

501
00:28:51,360 --> 00:28:53,239
Speaker 1: they weren't at the same magnitude and may you can

502
00:28:53,240 --> 00:28:56,720
Speaker 1: go back to the unfortunate you know, earthquake in Japan,

503
00:28:57,080 --> 00:28:59,160
Speaker 1: right and what that did two parts of the electrical

504
00:28:59,720 --> 00:29:02,400
Speaker 1: can outer industry. So that that I think when you

505
00:29:02,400 --> 00:29:04,680
Speaker 1: start to say no, they'll trick. You know, if you

506
00:29:04,720 --> 00:29:07,960
Speaker 1: assign a certain probability to these events occurring ever so

507
00:29:08,040 --> 00:29:13,840
Speaker 1: often with a very large negative economic loss, you then

508
00:29:13,880 --> 00:29:16,120
Speaker 1: if you if you're in the in the in the

509
00:29:16,320 --> 00:29:19,520
Speaker 1: seat of a chief financial officer or CEO, you may

510
00:29:19,560 --> 00:29:22,720
Speaker 1: start to you know, assign a little bit greater um,

511
00:29:23,040 --> 00:29:28,560
Speaker 1: you know, assets or investment into uh, adding redundancies into

512
00:29:28,600 --> 00:29:31,280
Speaker 1: the system. Right then before it's just from a risk

513
00:29:31,280 --> 00:29:33,720
Speaker 1: control perspective, So I think we'll see some of that

514
00:29:33,800 --> 00:29:36,320
Speaker 1: in what magnitude. I don't know, but I think it's

515
00:29:36,320 --> 00:29:38,920
Speaker 1: hard to imagine that in my mind that we'll go

516
00:29:39,360 --> 00:29:41,560
Speaker 1: as lean as possible in just in time as we

517
00:29:41,600 --> 00:29:44,880
Speaker 1: did before, because that opens up a business on operational risk.

518
00:29:45,160 --> 00:29:47,280
Speaker 1: The secondly is that I think we'll see a little

519
00:29:47,320 --> 00:29:50,680
Speaker 1: bit more. We certainly will see acceleration and automation, but

520
00:29:50,720 --> 00:29:54,880
Speaker 1: again this was a something that was already occurring. UM.

521
00:29:54,920 --> 00:29:58,600
Speaker 1: I think we'll also see uh, you know, it'll take

522
00:29:58,640 --> 00:30:02,800
Speaker 1: some time for some sectors to come back from um,

523
00:30:03,320 --> 00:30:05,680
Speaker 1: you know, like air travel and you know, things that

524
00:30:05,840 --> 00:30:10,040
Speaker 1: really are our social you know, social interactions of human beings.

525
00:30:10,080 --> 00:30:12,000
Speaker 1: I don't think though I think there will be a

526
00:30:12,040 --> 00:30:14,040
Speaker 1: recovery in business travel. I think there will be a

527
00:30:14,120 --> 00:30:17,680
Speaker 1: recovery in intervals, individuals going out to eat. I mean,

528
00:30:17,720 --> 00:30:20,720
Speaker 1: I recall nine eleven there was a significant concern or

529
00:30:20,840 --> 00:30:23,720
Speaker 1: future of air travel. UM. But it will take time.

530
00:30:23,760 --> 00:30:26,720
Speaker 1: That's where I think to anybody tests and the ability

531
00:30:26,720 --> 00:30:30,120
Speaker 1: and you and I and all of our human citizens

532
00:30:30,120 --> 00:30:31,840
Speaker 1: baried to be able to know that if if I

533
00:30:31,880 --> 00:30:34,680
Speaker 1: go into you know, a certain social setting, am I

534
00:30:34,720 --> 00:30:36,920
Speaker 1: and my is my health at risk? I think when

535
00:30:36,920 --> 00:30:39,880
Speaker 1: we get greater confidence with that right, I think we

536
00:30:39,920 --> 00:30:43,080
Speaker 1: will eventually see a return to some of those sectors,

537
00:30:43,080 --> 00:30:46,000
Speaker 1: but it will take a little bit longer um and

538
00:30:46,080 --> 00:30:48,880
Speaker 1: until until that dissipates, but that we will see a

539
00:30:48,960 --> 00:30:50,960
Speaker 1: recovery in some parts of the comment that are really

540
00:30:51,000 --> 00:30:54,440
Speaker 1: on their dress right now. This is part one of

541
00:30:54,480 --> 00:30:58,400
Speaker 1: our special edition Good Friday's Masters in Business talking to

542
00:30:58,520 --> 00:31:02,040
Speaker 1: people how they are adapt don to the coronavirus and

543
00:31:02,120 --> 00:31:05,840
Speaker 1: working at home. Our guest today is Pat La Frida.

544
00:31:05,920 --> 00:31:09,280
Speaker 1: He is a third generation butcher from a family that's

545
00:31:09,280 --> 00:31:13,040
Speaker 1: been in the meat business for over a century. Lo

546
00:31:13,200 --> 00:31:17,040
Speaker 1: Frida's Meat Purveyors supply stakes to many of New York

547
00:31:17,080 --> 00:31:22,360
Speaker 1: City's high end restaurants, including Minetta, Tavern, Spotted Pig, Union Square, Cafe,

548
00:31:22,480 --> 00:31:27,560
Speaker 1: Blue Smoke, and Market Table. Perhaps most famously, Danny Myers

549
00:31:27,600 --> 00:31:31,120
Speaker 1: tapped him to help create the unique shake Shack Burger,

550
00:31:31,480 --> 00:31:36,320
Speaker 1: which became an immediate hit and is now a global chain,

551
00:31:37,040 --> 00:31:40,760
Speaker 1: largely attributed to the success of the custom meat blend

552
00:31:41,200 --> 00:31:46,560
Speaker 1: Pat La Frida created. Patla Frida, welcome to a work

553
00:31:46,600 --> 00:31:49,320
Speaker 1: from home edition of Bloomberg. Thank you very much for

554
00:31:49,320 --> 00:31:55,200
Speaker 1: having its pleasure. So your business really developed as a

555
00:31:55,240 --> 00:31:59,840
Speaker 1: meat supplier to high end restaurants. Obviously, restaurants are on

556
00:32:00,000 --> 00:32:05,080
Speaker 1: are incredible dress today. What are you hearing from your customers? Well,

557
00:32:05,120 --> 00:32:08,360
Speaker 1: I'll tell you that the restaurant in the industries is

558
00:32:08,440 --> 00:32:11,960
Speaker 1: really they're struggling. I would say that they're split between

559
00:32:12,840 --> 00:32:18,680
Speaker 1: thinking of closing down completely or reorganizing. Um. But but

560
00:32:18,840 --> 00:32:22,120
Speaker 1: the brighter side of the other fifty, I call it

561
00:32:22,200 --> 00:32:25,600
Speaker 1: the positive fifty that many of them I've talked off

562
00:32:25,600 --> 00:32:29,680
Speaker 1: the ledge, which is get off the couch, improvised, and

563
00:32:29,680 --> 00:32:32,880
Speaker 1: we've seen so much of that. I've seen I've seen

564
00:32:32,960 --> 00:32:39,760
Speaker 1: more ingenuity in original ideas for restaurants that I've ever seen.

565
00:32:39,880 --> 00:32:44,360
Speaker 1: And you know, sometimes it takes a chaotic time like

566
00:32:44,440 --> 00:32:48,520
Speaker 1: this to to to really get um, people's minds rolling.

567
00:32:48,800 --> 00:32:52,240
Speaker 1: And you know, there are so many great examples. But

568
00:32:53,520 --> 00:32:57,520
Speaker 1: I think restaurants that had never thought of anything like

569
00:32:57,680 --> 00:33:01,880
Speaker 1: curbside delivery before thought they were above that. But we

570
00:33:01,920 --> 00:33:03,760
Speaker 1: don't even wanted to do that. So when we talk

571
00:33:03,760 --> 00:33:07,120
Speaker 1: about high end restaurants in New York City, they kind

572
00:33:07,120 --> 00:33:10,880
Speaker 1: of looked down upon, uh, you know, a curbside pick

573
00:33:11,000 --> 00:33:15,280
Speaker 1: up or take out. Um, they actually didn't permit it.

574
00:33:15,360 --> 00:33:20,680
Speaker 1: And then but they wanted to um historically. Now this

575
00:33:20,920 --> 00:33:24,720
Speaker 1: gives them a chance to actually take that that that

576
00:33:24,800 --> 00:33:28,680
Speaker 1: leap and and to begin that part of this evolution,

577
00:33:28,720 --> 00:33:30,640
Speaker 1: because that's what this is going to be. Restaurants are

578
00:33:30,640 --> 00:33:34,480
Speaker 1: going to be different forever. UM. We hope that that

579
00:33:34,640 --> 00:33:38,720
Speaker 1: there will be some you know, returned to normalcy, but

580
00:33:38,920 --> 00:33:43,040
Speaker 1: for anything, for for foreseeable future, things are going to

581
00:33:43,120 --> 00:33:46,360
Speaker 1: be different. We we already feel it, um. And when

582
00:33:46,360 --> 00:33:49,520
Speaker 1: restaurants get to reopen, I think we're going to see

583
00:33:49,560 --> 00:33:53,920
Speaker 1: the biggest surgeon and rebound in New York City. Um.

584
00:33:54,760 --> 00:33:58,280
Speaker 1: You know, despite it being the epicenter of the of

585
00:33:58,320 --> 00:34:01,680
Speaker 1: the coronavirus. UM, I disagree. I think it's gonna be

586
00:34:02,160 --> 00:34:05,000
Speaker 1: We'll have more people that have contracted it and have

587
00:34:05,280 --> 00:34:08,200
Speaker 1: gotten past it, um. And those are the people, the

588
00:34:08,360 --> 00:34:10,320
Speaker 1: very people that we will be the first back to

589
00:34:10,360 --> 00:34:14,320
Speaker 1: work at, the first to feel most comfortable in restaurants.

590
00:34:14,440 --> 00:34:19,040
Speaker 1: But to have restaurants, I think, UM, like they have

591
00:34:19,719 --> 00:34:26,520
Speaker 1: now to to create concepts um meal kits um. Again.

592
00:34:26,680 --> 00:34:31,440
Speaker 1: The the car is pulling up to the restaurant, topping

593
00:34:31,440 --> 00:34:34,239
Speaker 1: the trunk for orders that were already paid for with

594
00:34:34,280 --> 00:34:38,800
Speaker 1: a credit card, confirming through the window a closed window

595
00:34:38,960 --> 00:34:43,319
Speaker 1: as the who that customer is with customer that was

596
00:34:43,400 --> 00:34:47,200
Speaker 1: picking up UH, and then the someone from the restaurant

597
00:34:47,400 --> 00:34:49,719
Speaker 1: just putting the food in the trunk of the car

598
00:34:49,800 --> 00:34:53,000
Speaker 1: and the car driving off. Talking about social distancing and

599
00:34:53,280 --> 00:34:56,759
Speaker 1: restaurants are a place, it's New York City's golf course.

600
00:34:56,840 --> 00:34:59,879
Speaker 1: It's where we do businesses, where we celebrate, it's where

601
00:34:59,880 --> 00:35:03,200
Speaker 1: we spend time together. Um. But at the same time,

602
00:35:03,480 --> 00:35:08,839
Speaker 1: six of New York City residents got their meals from

603
00:35:08,880 --> 00:35:11,360
Speaker 1: outside of the home. So when you close that down,

604
00:35:12,000 --> 00:35:16,080
Speaker 1: when you're closing a major part of not just food

605
00:35:16,200 --> 00:35:20,040
Speaker 1: supply but culture, and you know, how will that culture

606
00:35:20,120 --> 00:35:23,840
Speaker 1: change in the future. And UM, I certainly hope we

607
00:35:23,880 --> 00:35:29,160
Speaker 1: get back more to a personal place where where those

608
00:35:29,360 --> 00:35:34,239
Speaker 1: meals are unique and meaningful. And I really think it's

609
00:35:34,239 --> 00:35:36,719
Speaker 1: going to take some time so between now and then

610
00:35:37,400 --> 00:35:40,640
Speaker 1: the restaurants to survive that percent I was talking about

611
00:35:41,800 --> 00:35:45,120
Speaker 1: those UH restaurants may not be making money right now,

612
00:35:45,160 --> 00:35:47,560
Speaker 1: and that's really not what it's about. And no one's

613
00:35:47,600 --> 00:35:52,320
Speaker 1: doing well right now, but it's certainly feels better to

614
00:35:53,360 --> 00:35:57,680
Speaker 1: the operational in some capacity so that when it is

615
00:35:57,760 --> 00:36:00,360
Speaker 1: time to come back online and it is time to

616
00:36:00,400 --> 00:36:05,200
Speaker 1: get the troops back, that that it'll be that much easier,

617
00:36:05,440 --> 00:36:10,040
Speaker 1: and that feeling of desperation of being on a couch,

618
00:36:10,960 --> 00:36:16,759
Speaker 1: um watching more cable pay per view and Netflix, and

619
00:36:16,760 --> 00:36:20,200
Speaker 1: you ever thought you you more to watch? Um? It

620
00:36:20,360 --> 00:36:22,560
Speaker 1: just there's so much more of a of a life

621
00:36:22,920 --> 00:36:26,440
Speaker 1: in feeling that. Um. You know, Yes, it's a virus,

622
00:36:26,480 --> 00:36:29,560
Speaker 1: it's horredness, it's taking lives, but you know what, it's

623
00:36:29,600 --> 00:36:32,680
Speaker 1: not gonna take my life. It's not gonna take all

624
00:36:32,719 --> 00:36:36,520
Speaker 1: of our lives. And we need to fight it by living.

625
00:36:37,000 --> 00:36:40,239
Speaker 1: We need decided by succeeding. That's a great philosophy path.

626
00:36:40,800 --> 00:36:45,120
Speaker 1: When you say, of your client base, which tends to

627
00:36:45,239 --> 00:36:50,080
Speaker 1: be middle to high end restaurants, how many are still

628
00:36:50,560 --> 00:36:55,600
Speaker 1: operating today and doing either curbside or take out um

629
00:36:55,640 --> 00:36:58,480
Speaker 1: service in New York and and in any of the

630
00:36:58,480 --> 00:37:02,600
Speaker 1: other boroughs, Well that's I put that number at about

631
00:37:02,600 --> 00:37:07,000
Speaker 1: fift are still closed from the day that the restaurants

632
00:37:07,000 --> 00:37:11,239
Speaker 1: were asked to clothes. And that's really scary. That's not

633
00:37:11,440 --> 00:37:14,080
Speaker 1: just fifty percent of my business. That's not just fifty

634
00:37:14,080 --> 00:37:18,120
Speaker 1: percent of my receivables. Um, you know, that's fifty of

635
00:37:18,120 --> 00:37:22,400
Speaker 1: our lives. We've built our lives around supplying restaurants. Um

636
00:37:22,480 --> 00:37:25,440
Speaker 1: and and I'll tell you that. You know, we had

637
00:37:25,480 --> 00:37:29,319
Speaker 1: to pivot ourselves and we had to change that our

638
00:37:29,440 --> 00:37:32,759
Speaker 1: business model. But but and we were already diversified into

639
00:37:32,800 --> 00:37:36,719
Speaker 1: supply retailers and and and you know our own home

640
00:37:36,760 --> 00:37:41,799
Speaker 1: delivery service. But we really ramped up our production. Our

641
00:37:41,840 --> 00:37:45,320
Speaker 1: production has been running six days a week, twelve hours

642
00:37:45,320 --> 00:37:47,879
Speaker 1: a day. We have not taken a day off from

643
00:37:47,880 --> 00:37:51,839
Speaker 1: this for during this entire pandemic. Because we are an

644
00:37:51,960 --> 00:37:56,360
Speaker 1: essential part of the food chain. We were essential personnel.

645
00:37:56,400 --> 00:37:58,520
Speaker 1: So we've been in the fight from the beginning. And

646
00:37:59,200 --> 00:38:02,719
Speaker 1: and quite frank we like it that way. Um. We

647
00:38:02,760 --> 00:38:04,920
Speaker 1: would want to be forced not to be able to

648
00:38:04,920 --> 00:38:07,680
Speaker 1: come to work. Pat, I notice on your website that

649
00:38:07,760 --> 00:38:12,960
Speaker 1: you are now delivering directly to consumers. Tell us about that.

650
00:38:13,880 --> 00:38:18,239
Speaker 1: It's a sector that was always about one or two

651
00:38:18,239 --> 00:38:22,720
Speaker 1: percent of our annual sales and now we'll probably account

652
00:38:22,760 --> 00:38:27,360
Speaker 1: for about fifteen or um. And and it is really

653
00:38:27,600 --> 00:38:30,359
Speaker 1: the access. What we saw in the first few weeks

654
00:38:30,400 --> 00:38:36,000
Speaker 1: of the pandemic when it was actually called such, is

655
00:38:36,040 --> 00:38:42,279
Speaker 1: that the run on supermarkets was extreme. And what what

656
00:38:42,400 --> 00:38:46,399
Speaker 1: none of us want as Americans is panic. I think

657
00:38:46,440 --> 00:38:49,440
Speaker 1: we can all agree upon that we don't want unnecessary panic.

658
00:38:50,000 --> 00:38:52,520
Speaker 1: So when you when you don't own a meat company

659
00:38:52,760 --> 00:38:55,680
Speaker 1: or a food company, and you know you're online for

660
00:38:55,840 --> 00:38:58,080
Speaker 1: five hours in a supermarket to find out that they

661
00:38:58,080 --> 00:39:01,799
Speaker 1: have nothing on the shelves that will cause panic, and

662
00:39:01,800 --> 00:39:05,600
Speaker 1: and and the virus cannot break this country, cannot break

663
00:39:05,760 --> 00:39:08,680
Speaker 1: our cities. So you cannot break these states. It cannot

664
00:39:08,760 --> 00:39:12,440
Speaker 1: do it, but panic can. And that's what we felt.

665
00:39:13,960 --> 00:39:18,440
Speaker 1: We made a statement to ourselves, among our family and

666
00:39:18,480 --> 00:39:22,160
Speaker 1: among our teams, we need to start to think of

667
00:39:22,239 --> 00:39:25,680
Speaker 1: how to alleviate this panic. How we are abridge the

668
00:39:25,840 --> 00:39:30,080
Speaker 1: food between between food and people and we need to

669
00:39:30,080 --> 00:39:35,520
Speaker 1: get me to people. And we are not going to

670
00:39:35,680 --> 00:39:39,880
Speaker 1: um tolerate in anyone that we work with. So and

671
00:39:39,920 --> 00:39:42,920
Speaker 1: I'll explain how we got others involved to help the

672
00:39:43,480 --> 00:39:47,600
Speaker 1: distribute products. They will not tolerate a price guage by

673
00:39:47,600 --> 00:39:49,880
Speaker 1: a penny. It's just it's not gonna happen. It's not

674
00:39:50,040 --> 00:39:54,520
Speaker 1: who we are. This is really to stop panic. And

675
00:39:54,560 --> 00:39:58,920
Speaker 1: I mean our lives are abridging food with people. And

676
00:39:59,000 --> 00:40:00,920
Speaker 1: if we will eat with we're able to do that

677
00:40:01,040 --> 00:40:04,759
Speaker 1: during this then we would have saved so many more

678
00:40:06,040 --> 00:40:09,799
Speaker 1: um maybe not lives, we maybe lives. I mean, just

679
00:40:11,200 --> 00:40:12,800
Speaker 1: we've got a lot of that feedback. I mean, we

680
00:40:12,840 --> 00:40:15,319
Speaker 1: don't like to accept that, but we just save so

681
00:40:15,440 --> 00:40:19,160
Speaker 1: much worried by staying. So let me ask you a

682
00:40:19,200 --> 00:40:25,160
Speaker 1: little bit about the supply chain. How is your business adapting?

683
00:40:25,760 --> 00:40:29,160
Speaker 1: Where are your what are your suppliers doing when they're

684
00:40:29,200 --> 00:40:33,759
Speaker 1: making their delivery. How do the logistics work? Is this

685
00:40:33,800 --> 00:40:38,680
Speaker 1: business as usual or have things really changed radically from

686
00:40:38,719 --> 00:40:42,560
Speaker 1: the farm too? When you ultimately drop off a package

687
00:40:42,560 --> 00:40:47,560
Speaker 1: of burgers and steaks to a restaurant or somebody's house, well,

688
00:40:48,000 --> 00:40:50,600
Speaker 1: I have to say that the meat industry has become

689
00:40:51,400 --> 00:40:56,680
Speaker 1: uh one of the most efficient systems food systems in

690
00:40:56,719 --> 00:41:01,080
Speaker 1: the world, and it has not been broke. So they're

691
00:41:01,200 --> 00:41:05,160
Speaker 1: still people still need to eat with girls if it's

692
00:41:05,200 --> 00:41:07,360
Speaker 1: coming from a restaurant or a retail market, is just

693
00:41:07,400 --> 00:41:10,920
Speaker 1: getting delivered to your house or getting curbside delivery. People

694
00:41:10,960 --> 00:41:15,160
Speaker 1: still need to eat. For most people, they eat meat

695
00:41:15,320 --> 00:41:18,880
Speaker 1: and and it's one of the staples they their family

696
00:41:19,160 --> 00:41:24,760
Speaker 1: need to see on on that table. So just making

697
00:41:24,840 --> 00:41:29,560
Speaker 1: sure that our suppliers and our suppliers from out west

698
00:41:29,680 --> 00:41:33,520
Speaker 1: have been so I mean, they really still think it's

699
00:41:33,600 --> 00:41:36,640
Speaker 1: it's it's an East Coast and and like New York

700
00:41:36,719 --> 00:41:41,839
Speaker 1: Center problem, and I'm trying to explain what's happening here

701
00:41:41,880 --> 00:41:45,319
Speaker 1: is going to happen there a hundred and any one

702
00:41:45,440 --> 00:41:48,880
Speaker 1: countries in two months. I guarantee you it hit all

703
00:41:48,920 --> 00:41:52,719
Speaker 1: fifty states. Um, but maybe they won't see at such

704
00:41:52,880 --> 00:41:56,200
Speaker 1: a rate that work that we saw it. But we're

705
00:41:56,320 --> 00:42:01,680
Speaker 1: in constant contact about restaurants and up again food were

706
00:42:02,560 --> 00:42:05,279
Speaker 1: what they are telling me are about one third of

707
00:42:05,320 --> 00:42:08,440
Speaker 1: the sales that they used to have. However, if you

708
00:42:08,719 --> 00:42:11,640
Speaker 1: speak to a restaurant that's partially open compared to a

709
00:42:11,680 --> 00:42:16,200
Speaker 1: restaurant that's completely closed, you'll hear a big difference in

710
00:42:15,440 --> 00:42:19,520
Speaker 1: in in their voices. You'll you'll know and feel depression

711
00:42:20,040 --> 00:42:23,160
Speaker 1: for those that haven't opened at all, and and and

712
00:42:23,160 --> 00:42:26,920
Speaker 1: and boredom. And you'll hear triumphs in those that are

713
00:42:27,120 --> 00:42:30,320
Speaker 1: going in every day and you know they're losing money,

714
00:42:30,400 --> 00:42:34,040
Speaker 1: but but their customers are so happy that that that

715
00:42:34,160 --> 00:42:38,080
Speaker 1: they've stuck it out and that they're providing food. Um.

716
00:42:38,120 --> 00:42:42,640
Speaker 1: You know, it's it's it's a very strange time. But

717
00:42:42,880 --> 00:42:47,560
Speaker 1: you know, as things changed in time and we all

718
00:42:47,600 --> 00:42:51,359
Speaker 1: need to adapt to to to what's ahead of us.

719
00:42:51,960 --> 00:42:55,240
Speaker 1: I I truly think if we stick to that abl

720
00:42:55,320 --> 00:42:59,080
Speaker 1: thirtieth reopening, I really think New York is going to

721
00:42:59,160 --> 00:43:01,480
Speaker 1: be one of the city that bound us back so

722
00:43:01,600 --> 00:43:05,480
Speaker 1: quickly that we'll be talking for years as to why

723
00:43:05,640 --> 00:43:11,120
Speaker 1: it was reported internationally that New York was crumbling. I've

724
00:43:11,120 --> 00:43:15,480
Speaker 1: gotten bolans letters basically from friends and other countries like,

725
00:43:15,520 --> 00:43:17,719
Speaker 1: I don't know if you guys have heard, but we're okay.

726
00:43:17,920 --> 00:43:20,399
Speaker 1: The faster we can get through this, the faster we're

727
00:43:20,400 --> 00:43:23,040
Speaker 1: going to rebound. Let's just talk a little bit more

728
00:43:23,120 --> 00:43:27,640
Speaker 1: about how your day to day work life has changed.

729
00:43:28,239 --> 00:43:32,160
Speaker 1: You're an essential service provider. Are you still going into

730
00:43:32,160 --> 00:43:36,040
Speaker 1: the shop? Are you still supervising the distribution of meat

731
00:43:36,120 --> 00:43:40,840
Speaker 1: to restaurants and homes? Yes. That's the one thing about

732
00:43:40,880 --> 00:43:44,960
Speaker 1: being a part of you know, in essential part to

733
00:43:45,040 --> 00:43:50,960
Speaker 1: the to the meat supply chain, is that as essential personnel,

734
00:43:51,280 --> 00:43:57,400
Speaker 1: our schedule never changes, never changed. Through Hurricane Sandy at

735
00:43:57,680 --> 00:44:00,000
Speaker 1: eleven we were we were very close to the tower.

736
00:44:00,480 --> 00:44:06,960
Speaker 1: Unfortunately UM to have witnessed them, the tragic, the atrocity,

737
00:44:07,080 --> 00:44:09,279
Speaker 1: UM and we will only close for one day then,

738
00:44:09,560 --> 00:44:13,279
Speaker 1: so this we well, we haven't closed at all. And

739
00:44:14,280 --> 00:44:19,160
Speaker 1: actually because of our pivot to to help retailers restop

740
00:44:19,200 --> 00:44:22,520
Speaker 1: their shelves, and that being a more labor intensive process.

741
00:44:22,960 --> 00:44:27,520
Speaker 1: My product production team has been working at full capacity

742
00:44:27,680 --> 00:44:32,319
Speaker 1: ever since this begin Wow. So in my freezer, I

743
00:44:32,400 --> 00:44:37,440
Speaker 1: have a couple of Australian racks of lamb that are

744
00:44:37,440 --> 00:44:42,320
Speaker 1: shrink wrapped from La fred to meat distribution. Uh, how

745
00:44:42,360 --> 00:44:46,759
Speaker 1: are you selling product directly to households? Is everything show

746
00:44:46,840 --> 00:44:49,040
Speaker 1: up shrink wrapped or is it like going to a

747
00:44:49,080 --> 00:44:55,359
Speaker 1: local butcher. Everything gets delivered vacuumed. But it's it's it's

748
00:44:55,440 --> 00:45:00,200
Speaker 1: vacuumed fresh. It's never been frozen. So our product, it's

749
00:45:00,239 --> 00:45:04,879
Speaker 1: just the way our culture as butchers has always been

750
00:45:04,960 --> 00:45:08,640
Speaker 1: from my grandfather to my dad to me. UM meets

751
00:45:08,640 --> 00:45:13,080
Speaker 1: always better fresh. So when we vacuum product where you're

752
00:45:13,120 --> 00:45:16,160
Speaker 1: actually able to you make the decision if you'd like

753
00:45:16,200 --> 00:45:18,759
Speaker 1: to freeze your product or run ahead and freezes it

754
00:45:18,760 --> 00:45:21,320
Speaker 1: will be good for over a year. Um, if you don't,

755
00:45:22,480 --> 00:45:25,720
Speaker 1: your product would be good in the refrigerator for about

756
00:45:25,719 --> 00:45:30,520
Speaker 1: twenty one days. So you really have meat as fresh

757
00:45:30,560 --> 00:45:32,959
Speaker 1: as as a restaurant. We would get it as fresh

758
00:45:33,000 --> 00:45:35,400
Speaker 1: as a butcher's shop to getting Hey, Pat, tell us

759
00:45:35,440 --> 00:45:39,160
Speaker 1: a little bit about how you're getting these products directly

760
00:45:39,239 --> 00:45:43,680
Speaker 1: to consumers. So our product is shipped fresh and it's

761
00:45:43,800 --> 00:45:47,600
Speaker 1: got ice gel packs in the in the boxes. In

762
00:45:47,640 --> 00:45:52,560
Speaker 1: the boxes are insulated themselves, so although we ship overnight,

763
00:45:53,680 --> 00:45:56,080
Speaker 1: that box is good in the temperatory. I think we've

764
00:45:56,120 --> 00:46:01,799
Speaker 1: tested it up to five days without without having the

765
00:46:01,840 --> 00:46:06,960
Speaker 1: temperature being compromised. But um, we we do all the

766
00:46:07,000 --> 00:46:10,879
Speaker 1: fulfillment here and we work all night long. So um,

767
00:46:10,920 --> 00:46:16,800
Speaker 1: after the virus of chaos, yes, our home delivery business

768
00:46:16,840 --> 00:46:22,279
Speaker 1: has really shot up. However, um, you know, so has

769
00:46:22,480 --> 00:46:27,960
Speaker 1: all reacha oil. So whereas most of our business, of

770
00:46:27,960 --> 00:46:33,000
Speaker 1: our business with supplying restaurants right now, about of our

771
00:46:33,000 --> 00:46:38,880
Speaker 1: business is supplying retailers to include Amazon, to include shop

772
00:46:38,960 --> 00:46:45,040
Speaker 1: right Fresh direct, UM in Italy and and and just

773
00:46:45,200 --> 00:46:49,960
Speaker 1: trying to help resupply the retailers so that we could

774
00:46:50,000 --> 00:46:53,719
Speaker 1: avoid panic in the city and panic in the try state.

775
00:46:53,800 --> 00:46:55,759
Speaker 1: We just don't want it to happen because there's no

776
00:46:55,800 --> 00:46:59,560
Speaker 1: reason for it. The food supply chain has not been broken,

777
00:47:01,400 --> 00:47:04,400
Speaker 1: and I'm I'm proof of it right here. Like I

778
00:47:04,440 --> 00:47:06,680
Speaker 1: just said, we have not closed one day. We've been

779
00:47:06,719 --> 00:47:10,160
Speaker 1: in production every day. I'm in constant contact with my

780
00:47:10,320 --> 00:47:17,520
Speaker 1: growers out west and the harvesting facilities again out west.

781
00:47:17,960 --> 00:47:22,080
Speaker 1: You know, everyone is in in in food supply has

782
00:47:22,160 --> 00:47:25,799
Speaker 1: really been has come together like you see in all

783
00:47:25,840 --> 00:47:30,480
Speaker 1: the parts of in other industries in our country. Really

784
00:47:30,680 --> 00:47:32,880
Speaker 1: when when it needs to get together and binding together,

785
00:47:33,000 --> 00:47:36,640
Speaker 1: it does. So let's talk a little bit about everybody's

786
00:47:36,680 --> 00:47:42,279
Speaker 1: favorite barbecue item, the hamburger. You have been credited with

787
00:47:42,440 --> 00:47:47,080
Speaker 1: stoking a giant burger boom in New York City prior

788
00:47:47,360 --> 00:47:52,160
Speaker 1: to this whole current situation that's taking place. How much

789
00:47:52,200 --> 00:47:54,480
Speaker 1: of that is hyperbole and how much of that is

790
00:47:54,480 --> 00:47:59,120
Speaker 1: is true? How responsible are you for all of these

791
00:47:59,239 --> 00:48:06,560
Speaker 1: lovely high hamburgers at all of our favorite restaurants in Manhattan? Uh?

792
00:48:06,600 --> 00:48:12,520
Speaker 1: And gildous charged? And you know, uh, I'll tell you

793
00:48:12,560 --> 00:48:21,440
Speaker 1: that that before we began making blends specifically for restaurants,

794
00:48:21,440 --> 00:48:26,239
Speaker 1: specifically for the cooking equipment that those restaurants had in them,

795
00:48:26,280 --> 00:48:29,880
Speaker 1: and specifically for the play buds of the chiefs in

796
00:48:29,880 --> 00:48:36,480
Speaker 1: those restaurants, really shop beef or ground beef was sold

797
00:48:37,440 --> 00:48:42,120
Speaker 1: in burger form or in bulk by its fat percentage.

798
00:48:42,520 --> 00:48:48,959
Speaker 1: So you saw, we never really used those numbers. Those

799
00:48:49,080 --> 00:48:52,719
Speaker 1: numbers are really in order to calculate those numbers if

800
00:48:52,719 --> 00:48:55,160
Speaker 1: you didn't send that product to a lab. What you're

801
00:48:55,160 --> 00:49:01,560
Speaker 1: doing is taking imported trimmings and um that that are

802
00:49:01,680 --> 00:49:05,200
Speaker 1: tested for it's how lean they are, and then adding

803
00:49:05,239 --> 00:49:09,440
Speaker 1: it with some domestic trimmings and maybe some mechanically bone beef,

804
00:49:10,239 --> 00:49:13,640
Speaker 1: making the burger that we've all seen more gray and

805
00:49:13,760 --> 00:49:19,279
Speaker 1: flavorless than it is a real steak experience. So my

806
00:49:19,400 --> 00:49:23,880
Speaker 1: grandfather always said, you cannot hide your sins in the

807
00:49:23,960 --> 00:49:26,440
Speaker 1: chopping machine. So what you put in there is what

808
00:49:26,480 --> 00:49:29,600
Speaker 1: you're gonna get out of there. And and what he

809
00:49:29,680 --> 00:49:32,719
Speaker 1: meant was when you use hole muscle only, so full

810
00:49:32,840 --> 00:49:36,080
Speaker 1: hole cuts of beef, when you're using a whole chuck,

811
00:49:36,239 --> 00:49:38,440
Speaker 1: and when you're using the clod which has the flat

812
00:49:38,480 --> 00:49:43,520
Speaker 1: iron attached, which has many many retail cuts in there,

813
00:49:44,880 --> 00:49:47,200
Speaker 1: you're gonna You're gonna get the flavors of ribbi, You're

814
00:49:47,200 --> 00:49:50,360
Speaker 1: gonna get the flavors of New York strip um. And

815
00:49:51,480 --> 00:49:54,880
Speaker 1: a big part of our recipe is to use whole briskets.

816
00:49:55,400 --> 00:50:00,279
Speaker 1: Briskets have a buttery flavor um from that fat layer

817
00:50:00,360 --> 00:50:03,600
Speaker 1: that separates the two muscle groups in a brisket. The

818
00:50:03,680 --> 00:50:06,400
Speaker 1: brisket holds up thirty of the weight of an animal.

819
00:50:06,520 --> 00:50:11,080
Speaker 1: So it's a it's a real tough, slow cooked, slow

820
00:50:11,120 --> 00:50:16,080
Speaker 1: cooked type of beef. However, when you chop it, it

821
00:50:16,160 --> 00:50:19,360
Speaker 1: has great flavor and it really holds back a little

822
00:50:19,360 --> 00:50:22,279
Speaker 1: bit and give us the burger some fight so that

823
00:50:22,320 --> 00:50:26,080
Speaker 1: you don't have a mushy, gray cafeteria burger that we

824
00:50:26,160 --> 00:50:31,720
Speaker 1: had back in high school. And it says the very special.

825
00:50:32,200 --> 00:50:38,520
Speaker 1: And actually how this started, Um, my grandfather always made

826
00:50:38,800 --> 00:50:42,600
Speaker 1: great burger meat. And although we didn't sell to some

827
00:50:42,760 --> 00:50:47,640
Speaker 1: of the really fancy restaurants like Les Banasa, to the

828
00:50:47,719 --> 00:50:53,359
Speaker 1: Chef Delivier, yet during grilling season they stopped by our

829
00:50:53,440 --> 00:50:58,000
Speaker 1: place for their burger meat to grill for burgers because

830
00:50:58,080 --> 00:51:02,080
Speaker 1: my grandfather had such a great reputation for for that

831
00:51:02,880 --> 00:51:08,839
Speaker 1: and that that really carried through so all of the disciples,

832
00:51:08,880 --> 00:51:12,720
Speaker 1: So all of the chefs that spawned from from that group,

833
00:51:13,160 --> 00:51:16,319
Speaker 1: when they move on to other restaurants, they know, um

834
00:51:16,400 --> 00:51:20,760
Speaker 1: and they know where to get. They wanted the best caviat,

835
00:51:20,760 --> 00:51:22,839
Speaker 1: if they wanted the best burger, then they know where

836
00:51:22,880 --> 00:51:26,640
Speaker 1: to go. Let's talk about something that's a little bit blasphemous,

837
00:51:26,680 --> 00:51:30,759
Speaker 1: and that is the black label burger. How did you

838
00:51:30,920 --> 00:51:34,879
Speaker 1: ever decide to say, I know let's take the most

839
00:51:34,920 --> 00:51:39,799
Speaker 1: expensive cut of dry aged meat in our refrigerators, and

840
00:51:39,920 --> 00:51:42,920
Speaker 1: what the heck, let's just grind it up into hamburgers.

841
00:51:42,960 --> 00:51:47,960
Speaker 1: A lot of people thought that was just blasphemous. Yes,

842
00:51:48,239 --> 00:51:51,960
Speaker 1: And you know, as as I experimented with different blends

843
00:51:52,000 --> 00:51:55,399
Speaker 1: for different restaurants according to what they wanted. I had

844
00:51:55,440 --> 00:51:59,000
Speaker 1: met with a chef that was going to open a

845
00:51:59,120 --> 00:52:04,759
Speaker 1: restaurant in six months and wanted something very different. And

846
00:52:04,800 --> 00:52:06,839
Speaker 1: now have to remember, we were on the cusp of

847
00:52:06,880 --> 00:52:13,520
Speaker 1: the financial bubble like it bursts them, so in the

848
00:52:13,600 --> 00:52:16,600
Speaker 1: planning stages of you know, I guess you could say

849
00:52:16,600 --> 00:52:21,080
Speaker 1: that the financial crash happened during the planning stage of

850
00:52:22,000 --> 00:52:25,680
Speaker 1: this chef trying to find something special, and I just

851
00:52:25,719 --> 00:52:28,840
Speaker 1: so happened to have been working run because of my

852
00:52:28,960 --> 00:52:32,280
Speaker 1: love of dry aged beef, a portion of the burger

853
00:52:32,800 --> 00:52:37,200
Speaker 1: having dry aged beef in it. I thought I would

854
00:52:37,200 --> 00:52:42,160
Speaker 1: give a dry aged steak experience with you, not as

855
00:52:42,200 --> 00:52:47,720
Speaker 1: expensive as a steak, but not as inexpensive as a burger.

856
00:52:48,040 --> 00:52:50,279
Speaker 1: I was trying to reach somewhere in between, but I

857
00:52:50,360 --> 00:52:55,960
Speaker 1: still have that great dry age flavor. So that restaurant

858
00:52:56,640 --> 00:53:01,000
Speaker 1: wound up to be Minetta Tavern, and the chef riad

859
00:53:01,440 --> 00:53:05,799
Speaker 1: had asked me for an agreement that we would not

860
00:53:05,960 --> 00:53:10,120
Speaker 1: fell black label did that specific drage blend to anybody else,

861
00:53:10,920 --> 00:53:13,560
Speaker 1: And we shook hands on it. And he is no

862
00:53:13,719 --> 00:53:17,720
Speaker 1: longer adminant at tavern, but we still hold our problems.

863
00:53:17,800 --> 00:53:20,880
Speaker 1: We've never given that blend to anyone else. What was

864
00:53:20,920 --> 00:53:28,600
Speaker 1: the pushback like to a dollar hamburger in two thousand, Well,

865
00:53:29,920 --> 00:53:35,760
Speaker 1: so when the restaurant opened the eight the crash had happened,

866
00:53:35,920 --> 00:53:40,959
Speaker 1: so ownership and the chefs were really considering not not

867
00:53:41,520 --> 00:53:44,440
Speaker 1: putting it on the menu. Black label almost did not

868
00:53:44,600 --> 00:53:48,520
Speaker 1: exist because they thought the twenty six dollar hamburger as

869
00:53:48,560 --> 00:53:53,240
Speaker 1: opposed to the sixteen dollar hamburger, which was a great burger.

870
00:53:53,280 --> 00:53:57,440
Speaker 1: Also it's a short rim blend. Um. But they figured, okay,

871
00:53:57,480 --> 00:54:00,560
Speaker 1: let's do it, and they got a little bit. There

872
00:54:00,719 --> 00:54:03,279
Speaker 1: was a writer or two that that brought it to

873
00:54:03,320 --> 00:54:06,200
Speaker 1: everyone's attention that you know, during these times, why is

874
00:54:06,200 --> 00:54:09,480
Speaker 1: there a twenty six dollar hamburger from the menu. Yet

875
00:54:09,520 --> 00:54:14,800
Speaker 1: they didn't complain about the coat the boof so a

876
00:54:14,920 --> 00:54:18,440
Speaker 1: dry aged rib steak was ninety dollars, but the burger

877
00:54:18,520 --> 00:54:26,400
Speaker 1: was twenty seven. After one year, Um, I remember, um,

878
00:54:26,480 --> 00:54:29,160
Speaker 1: the chef colony and asking me, Pat, do you know

879
00:54:29,200 --> 00:54:32,520
Speaker 1: how many black label burgers we sold in year one?

880
00:54:33,040 --> 00:54:35,640
Speaker 1: I said, yes, sixteen thousand, five hundreds. Like, but how

881
00:54:35,640 --> 00:54:40,040
Speaker 1: would you know that I saw you the beefy they

882
00:54:40,200 --> 00:54:43,320
Speaker 1: ate iceburger. I know exactly how many ab because of

883
00:54:43,360 --> 00:54:47,600
Speaker 1: trace ability we track you know, every pound um for

884
00:54:47,960 --> 00:54:52,120
Speaker 1: our USBA guidelines in their own personal trace ability and

885
00:54:53,200 --> 00:54:58,120
Speaker 1: of the less expensive short rib burger UM eight thousands,

886
00:54:59,120 --> 00:55:02,800
Speaker 1: so slightly less than half of the twenty dollar burgers

887
00:55:04,400 --> 00:55:07,400
Speaker 1: dollar burger is is three hundred a week. Is is

888
00:55:07,440 --> 00:55:10,360
Speaker 1: back in the envelope calculations. That's a lot of burgers,

889
00:55:11,200 --> 00:55:16,600
Speaker 1: a lot of burgers, especially a steak house. So so

890
00:55:16,680 --> 00:55:19,799
Speaker 1: let's talk about some steakhouses, and I want to ask

891
00:55:19,840 --> 00:55:23,759
Speaker 1: you about two specific ones that you're involved with. Tell

892
00:55:23,840 --> 00:55:26,960
Speaker 1: us a little bit about the chop House at City

893
00:55:27,000 --> 00:55:32,879
Speaker 1: Field where the New York Mets play. Well. I had

894
00:55:32,960 --> 00:55:36,440
Speaker 1: become friends with, you know, the ownership of the Mets.

895
00:55:36,600 --> 00:55:39,360
Speaker 1: There were big fans of Hours, as we were of theirs.

896
00:55:39,480 --> 00:55:43,480
Speaker 1: And one day they asked me and they said, Pat,

897
00:55:43,560 --> 00:55:46,319
Speaker 1: you know there's one thing that our ballpark does not have,

898
00:55:46,600 --> 00:55:50,600
Speaker 1: and that's a steak sandwich. They had asked me if

899
00:55:50,800 --> 00:55:53,080
Speaker 1: if it's something that we would consider if we had

900
00:55:53,080 --> 00:55:56,480
Speaker 1: a steak sandwich in our family, and we did it

901
00:55:57,040 --> 00:56:00,880
Speaker 1: had skirted steak, we had we had changed that because, um,

902
00:56:01,520 --> 00:56:04,160
Speaker 1: you know, scool of steak is my favorite cut of beef.

903
00:56:04,239 --> 00:56:07,640
Speaker 1: But it's just too um, I don't want to say tough.

904
00:56:07,680 --> 00:56:10,800
Speaker 1: It's it's not tender enough for a sandwich in a ballpark.

905
00:56:11,560 --> 00:56:13,400
Speaker 1: People would be ripping the lay at it because they

906
00:56:13,400 --> 00:56:20,480
Speaker 1: don't know what the attributes of the scoop steaks. So um.

907
00:56:20,640 --> 00:56:25,399
Speaker 1: They asked me to come cook our steak sandwich and

908
00:56:25,560 --> 00:56:28,319
Speaker 1: I didn't think that I would be cooking it. I

909
00:56:28,360 --> 00:56:30,480
Speaker 1: thought like the chefs and they would be cooking it

910
00:56:31,440 --> 00:56:35,840
Speaker 1: and amount of three D and they loved it, and

911
00:56:35,880 --> 00:56:37,840
Speaker 1: they act. They told me that the season would be

912
00:56:37,880 --> 00:56:42,759
Speaker 1: starting in twelve days, and did I'd be operational in

913
00:56:43,120 --> 00:56:47,000
Speaker 1: two locations in twelve days. And I'm not one to

914
00:56:47,040 --> 00:56:52,560
Speaker 1: say no, I did. And they're still told today big

915
00:56:52,680 --> 00:56:56,520
Speaker 1: Hits and and at the ballpark that if you haven't

916
00:56:56,520 --> 00:57:00,360
Speaker 1: been there, to anyone listening, um, it's a ball parking

917
00:57:00,480 --> 00:57:04,160
Speaker 1: in which there's no better food in any other large

918
00:57:04,239 --> 00:57:12,160
Speaker 1: format capacity than city field. It's a giant upgrade. It's

919
00:57:12,200 --> 00:57:15,080
Speaker 1: a giant upgrade from Chase Stadium, to say the least.

920
00:57:15,440 --> 00:57:20,120
Speaker 1: But since you mentioned ballpark, I have to bring up MSG.

921
00:57:20,720 --> 00:57:24,520
Speaker 1: You sell Patla Freda steak sandwiches at the Home of

922
00:57:24,560 --> 00:57:26,640
Speaker 1: the Knicks. In fact, it's really the only reason to

923
00:57:26,680 --> 00:57:30,080
Speaker 1: go to the garden these days. What what gave you

924
00:57:30,120 --> 00:57:33,000
Speaker 1: the idea of saying, Hey, here's a venue where we

925
00:57:33,080 --> 00:57:37,280
Speaker 1: can reach out to the public with a really high

926
00:57:37,320 --> 00:57:42,240
Speaker 1: quality food experience at a place that usually sells not

927
00:57:42,360 --> 00:57:51,160
Speaker 1: necessarily the greatest food. Yes, but unfortunately that building is

928
00:57:51,280 --> 00:57:58,000
Speaker 1: under major renovation to the tone of one billion dollars,

929
00:57:58,000 --> 00:58:04,640
Speaker 1: so our footprint the gardens will will be suspended until

930
00:58:05,240 --> 00:58:09,960
Speaker 1: that construction is finished. What we did open, though, was

931
00:58:10,440 --> 00:58:14,360
Speaker 1: in in the time Out building in Dumbo, which was

932
00:58:14,520 --> 00:58:17,080
Speaker 1: a great food hall, un though it was closed recently,

933
00:58:17,560 --> 00:58:21,480
Speaker 1: but we'll reopen when all the restaurants reopened. Is the

934
00:58:21,640 --> 00:58:25,360
Speaker 1: same concept on the first floor on the fifth floor

935
00:58:26,000 --> 00:58:29,040
Speaker 1: UM with an additional concept of the first floor. So

936
00:58:29,080 --> 00:58:31,720
Speaker 1: we have three locations and one food hall that has

937
00:58:31,920 --> 00:58:39,320
Speaker 1: twenty three concepts. We're the only concept that has more

938
00:58:39,400 --> 00:58:45,600
Speaker 1: than than one under one roof uh and the most successful,

939
00:58:46,720 --> 00:58:49,400
Speaker 1: So we're really proud of that, and it's amazing. As

940
00:58:49,440 --> 00:58:52,560
Speaker 1: a kid, I'm born and raised in Brooklyn, and as

941
00:58:52,600 --> 00:58:56,080
Speaker 1: a kid, I wasn't leaning allowed in that in those areas.

942
00:58:56,160 --> 00:58:59,600
Speaker 1: And to see how it's changed in the amount of

943
00:58:59,680 --> 00:59:03,240
Speaker 1: tour as people that you just you can't even drive

944
00:59:03,280 --> 00:59:06,320
Speaker 1: them the streets down there on the cobblestone. I mean,

945
00:59:06,320 --> 00:59:12,280
Speaker 1: it's just littered with with with tourists in a very

946
00:59:12,280 --> 00:59:16,520
Speaker 1: good way. I don't know how tourists know to go there,

947
00:59:17,080 --> 00:59:19,920
Speaker 1: but they have found a beautiful place that overlooks New

948
00:59:20,000 --> 00:59:23,560
Speaker 1: York City at the base of the Brooklyn Bridge in

949
00:59:23,600 --> 00:59:28,280
Speaker 1: the Manhattan Bridge, and right there overlooking the water is

950
00:59:29,120 --> 00:59:31,880
Speaker 1: a gorgeous food hall called Time Out. And we really

951
00:59:31,880 --> 00:59:34,920
Speaker 1: can't wait until we get back. We really can't wait

952
00:59:34,960 --> 00:59:39,040
Speaker 1: till we get timing, I should say, uh. And and

953
00:59:39,080 --> 00:59:41,960
Speaker 1: that's those are epic views over there from from the

954
00:59:42,080 --> 00:59:46,560
Speaker 1: esplanade looking at the skyline of Manhattan. We we keep

955
00:59:46,600 --> 00:59:50,160
Speaker 1: hearing that there's gonna be another round of stimulus coming

956
00:59:50,280 --> 00:59:54,440
Speaker 1: out of Washington, d C. If congressional leaders called you

957
00:59:54,520 --> 00:59:57,560
Speaker 1: and said, Pat, we're trying to figure out what we

958
00:59:57,640 --> 01:00:01,919
Speaker 1: need to do for restaurants across the country, what sort

959
01:00:01,960 --> 01:00:04,920
Speaker 1: of advice would you give them to help ensure the

960
01:00:05,000 --> 01:00:10,080
Speaker 1: restaurant industry recovers when all this is behind us. That

961
01:00:10,280 --> 01:00:14,680
Speaker 1: that really is a great question because even with this

962
01:00:14,840 --> 01:00:18,640
Speaker 1: current loan that that they are, you know, they're all

963
01:00:18,720 --> 01:00:22,880
Speaker 1: able to access this SPD loan. But what's the one

964
01:00:22,920 --> 01:00:24,760
Speaker 1: thing that they can't do with it? They can't pay

965
01:00:24,840 --> 01:00:30,280
Speaker 1: their mean prevyor they can't pay their product purveyor fish

966
01:00:30,320 --> 01:00:33,840
Speaker 1: prevyor so, you know, not being able to pay bills.

967
01:00:35,960 --> 01:00:38,200
Speaker 1: You see, the whole the whole system has to work

968
01:00:39,000 --> 01:00:42,840
Speaker 1: from from the restaurant suppliers all the way through you know,

969
01:00:42,880 --> 01:00:46,280
Speaker 1: the finished dish. But but let's just think of the

970
01:00:46,320 --> 01:00:50,480
Speaker 1: restaurants for now. They're they're devastated, they don't know what

971
01:00:50,520 --> 01:00:58,280
Speaker 1: to do. So when has any restaurant, you know, as

972
01:00:58,320 --> 01:01:01,080
Speaker 1: a whole when when when has the country ever had

973
01:01:01,560 --> 01:01:05,240
Speaker 1: forced restaurants to close? Never? Not, not in the history

974
01:01:05,280 --> 01:01:08,280
Speaker 1: that we know of. I don't even believe it. In

975
01:01:08,440 --> 01:01:14,120
Speaker 1: nineteen during the Spanish flu did they close all restaurants? Um,

976
01:01:14,280 --> 01:01:17,800
Speaker 1: So it's it's a different difficult question. And I want

977
01:01:17,800 --> 01:01:20,960
Speaker 1: to help the restaurants more than anyone, but where does

978
01:01:21,000 --> 01:01:24,880
Speaker 1: it And then, because there are many industries that I

979
01:01:24,880 --> 01:01:29,440
Speaker 1: don't know an industry that has been profitable during this

980
01:01:29,560 --> 01:01:36,320
Speaker 1: time either. So um, it's again, I want to help restaurants.

981
01:01:36,320 --> 01:01:40,080
Speaker 1: I know that the administration has met with some very

982
01:01:40,200 --> 01:01:45,480
Speaker 1: um well known and celebrity chefs to get their input

983
01:01:46,200 --> 01:01:50,120
Speaker 1: on how to help restaurants. But restaurants are in a

984
01:01:50,160 --> 01:01:53,360
Speaker 1: lot of trouble. And I think that the biggest part

985
01:01:53,560 --> 01:01:57,760
Speaker 1: of the Simbulist bill that helped restaurants in general was

986
01:01:57,800 --> 01:02:02,760
Speaker 1: to help their employees get unemployment. To me, that was

987
01:02:02,800 --> 01:02:07,320
Speaker 1: the most important part because again bell behole and now

988
01:02:07,480 --> 01:02:12,040
Speaker 1: a small business owner is left with a huge chunk

989
01:02:12,200 --> 01:02:17,040
Speaker 1: of of missing revenue. So yet they have read, yet

990
01:02:17,080 --> 01:02:22,400
Speaker 1: they have expenses, Yet they have They've had no no

991
01:02:22,600 --> 01:02:30,920
Speaker 1: incoming money for weeks and and and as opposed to

992
01:02:30,960 --> 01:02:35,880
Speaker 1: what the general public things, restaurants don't make large profits

993
01:02:35,920 --> 01:02:41,600
Speaker 1: at all if all. So it's a really tough question.

994
01:02:41,680 --> 01:02:45,800
Speaker 1: At the same time, I'm a realist. This money was

995
01:02:45,880 --> 01:02:50,720
Speaker 1: not just sitting somewhere in the back shelf. Get ready

996
01:02:50,720 --> 01:02:53,840
Speaker 1: for a stimulus. We're borrowing this money from foreign countries

997
01:02:54,120 --> 01:02:59,360
Speaker 1: and and we're gonna have to pay back as a

998
01:02:59,440 --> 01:03:02,720
Speaker 1: country at some point. Also, so there's got to be

999
01:03:02,840 --> 01:03:07,040
Speaker 1: some balance in there. I originally the stimulus was a

1000
01:03:07,040 --> 01:03:09,680
Speaker 1: billion a trillion dollars, then it went to two trillion

1001
01:03:10,080 --> 01:03:14,760
Speaker 1: with the idea that we may need more. Um. I

1002
01:03:14,800 --> 01:03:19,160
Speaker 1: think the idea of asking for non business related things

1003
01:03:19,320 --> 01:03:27,000
Speaker 1: during that time by by certain political leaders was just atrocious. Really,

1004
01:03:27,000 --> 01:03:30,520
Speaker 1: we need to learn about the businesses and to help restaurants,

1005
01:03:31,240 --> 01:03:35,760
Speaker 1: the administration would really have to have more of these

1006
01:03:35,840 --> 01:03:40,120
Speaker 1: small business loans that they could loan restaurants. I wouldn't

1007
01:03:40,160 --> 01:03:43,840
Speaker 1: say completely forgivable. I think that when restaurants built back,

1008
01:03:43,920 --> 01:03:47,560
Speaker 1: like any other industry, they would have to pay back

1009
01:03:47,640 --> 01:03:50,960
Speaker 1: these loans. And if they know, the interest rates right

1010
01:03:51,000 --> 01:03:53,680
Speaker 1: now are at all time lows the federal funds rates

1011
01:03:53,720 --> 01:03:58,200
Speaker 1: and all time loan so if they could have longer

1012
01:03:58,360 --> 01:04:02,400
Speaker 1: term loans, so these loans are two year loans, well,

1013
01:04:02,400 --> 01:04:05,919
Speaker 1: why not extend that for restaurants. If we're gonna kick

1014
01:04:05,960 --> 01:04:09,640
Speaker 1: a sector that really needs help, let's loan the restaurant

1015
01:04:09,800 --> 01:04:11,920
Speaker 1: money so that they could get back on their feet

1016
01:04:12,440 --> 01:04:16,520
Speaker 1: with a small interest rate and they pay that loan

1017
01:04:16,600 --> 01:04:18,880
Speaker 1: over a ken year period. I think that would be

1018
01:04:18,880 --> 01:04:23,800
Speaker 1: a great way to help restaurants, and that's what this

1019
01:04:23,800 --> 01:04:25,880
Speaker 1: thing was started. That ways but then it went to

1020
01:04:25,960 --> 01:04:31,640
Speaker 1: two years. It's not with forgiveness. I I say no forgiveness.

1021
01:04:31,760 --> 01:04:33,720
Speaker 1: I think that the restaurants will even happy to have

1022
01:04:33,760 --> 01:04:36,640
Speaker 1: a low interest loan for a longer period of time,

1023
01:04:36,880 --> 01:04:39,400
Speaker 1: and that would really make them sound Thanks Pat. We've

1024
01:04:39,400 --> 01:04:42,640
Speaker 1: been speaking to Pat Lafreda of La Freda Meat Purveyors

1025
01:04:42,760 --> 01:04:46,800
Speaker 1: on how restaurants and the food chain is actually being

1026
01:04:46,800 --> 01:04:51,160
Speaker 1: impacted by the coronavirus. If you enjoy this conversation, well,

1027
01:04:51,240 --> 01:04:55,560
Speaker 1: be sure and go to your favorite podcast host Apple, iTunes, Stitcher,

1028
01:04:56,240 --> 01:04:59,280
Speaker 1: Spotify and you could see any of the previous three

1029
01:04:59,320 --> 01:05:02,480
Speaker 1: hundreds such a conversations we've had over the past five

1030
01:05:02,520 --> 01:05:04,840
Speaker 1: and a half years. Be sure and check out my

1031
01:05:04,920 --> 01:05:08,920
Speaker 1: weekly column on bloomberg dot com slash Opinion. Follow me

1032
01:05:09,000 --> 01:05:13,000
Speaker 1: on Twitter at Ritholtz. I'm Barry Riholts. You're listening to

1033
01:05:13,120 --> 01:05:15,600
Speaker 1: Masters in Business on Bloomberg Radio.