Speaker 1: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Steneveek on Bloomberg Radio. Well, Jess, I love having restaurant
Speaker 1: tours on our program because well I love food, and
Speaker 1: sometimes if they're here in person, they bring us food
Speaker 1: and I can try it. It's really fun. But also
Speaker 1: I love speaking to them about the business, how much
Speaker 1: food costs, how tough or how easy it is to
Speaker 1: get employees, and of course customer demand. It can tell
Speaker 1: us just a lot about how the economy is doing
Speaker 1: in different parts of the country. Very pleased to add
Speaker 1: with us this afternoon. John Fraser. He's a restaurant tour
Speaker 1: of Michelin starred Chef. He's the founder of JF Restaurants.
Speaker 1: They've got fifteen restaurants with more than four hundred employees
Speaker 1: around New York City, Long Island. They're in California, in LA,
Speaker 1: They've got places in Florida as well. He's also got
Speaker 1: a YouTube series called Silent Chef, which we're going to
Speaker 1: talk about as well. Chef John Fraser joins us on
Speaker 1: a zoom from New York City. Chef, how are you great?
Speaker 2: Thank you, thanks for having me.
Speaker 1: Yeah, it's really good to have you with us. First,
Speaker 1: just give us an update on the state of the business.
Speaker 1: What are you seeing right now across your different restaurants
Speaker 1: and concepts.
Speaker 3: Yeah, you know, it's really city by city. New York City,
Speaker 3: as everyone knows, kind of is a really seasonal business.
Speaker 3: Our New York City restaurants who were up from last summer.
Speaker 2: For sure. We'll know in a couple of days kind
Speaker 2: of how much.
Speaker 3: But we do see a bit of a little always
Speaker 3: in the second heading into the third quarter, and then
Speaker 3: we ramp up into the fourth which is by far
Speaker 3: our best around Florida. Also, seasonal dips happen in the summertime,
Speaker 3: and we're seeing really really strong demand across the hotel
Speaker 3: properties out in Long Island, as you know, that's that's
Speaker 3: where it all happens in the summertime.
Speaker 2: It's the seasonal business, and we've been rocking.
Speaker 3: We'll probably go until around the end of October and
Speaker 3: then we'll settle into the winter months.
Speaker 1: Well, what about getting employees. If we were to speak
Speaker 1: to you two years ago, I know you would have
Speaker 1: said it's tough to find employees to uh, to work
Speaker 1: in the restaurants. Tell us about how tough it is
Speaker 1: to get those employees and then also tell us about
Speaker 1: food costs and if they're going done.
Speaker 3: Yeah, Starting with food costs, I mean, we have seen
Speaker 3: a drastic decrease in our food cost as supply chain
Speaker 3: has gotten better.
Speaker 4: You know.
Speaker 3: Thankfully we're able to pass that along to our guests,
Speaker 3: and we're seeing that across all of our restaurants in
Speaker 3: all of our markets. The food hike, the food cost
Speaker 3: hikes were kind of universal. It didn't matter market to market.
Speaker 3: Eggs we're still, you know, wildly expensive. Gas was wildly expensive.
Speaker 3: That was all passed on to us and there for
Speaker 3: our guests. So from a food cost perspective, we're seeing
Speaker 3: things drastically reduced. There still are some pockets, I would say,
Speaker 3: a lot of proteins like beef still very very high.
Speaker 3: I'm not sure that's ever going to get better, to
Speaker 3: be honest with you, It may just be a change
Speaker 3: in the way that we construct our menus, in the
Speaker 3: way that our guests actually eat. From a labor perspective,
Speaker 3: we are starting to see some uptick. We've we've hired
Speaker 3: on let's call re hired a lot of people that
Speaker 3: were pre pandemic hospitality employees. So in other words, we're
Speaker 3: bringing folks in that who have had experience in the past,
Speaker 3: whereas I would send in the last couple of years
Speaker 3: we were training from zero, which is fantastic for us,
Speaker 3: and I think that that guest experience is drastically improved
Speaker 3: in that way. I still think that we you know,
Speaker 3: hot topic. You know, when we figure out a sensible
Speaker 3: kind of reaction to our borders, that will be kind
Speaker 3: of the last domino for us to fall in order
Speaker 3: to equalize and be able to pass as savings on
Speaker 3: to our guests.
Speaker 4: So in your view, do you really think the economy
Speaker 4: is slowing?
Speaker 3: In my view, well, compared to what right compared to
Speaker 3: a year ago, were drastically up from last year compared
Speaker 3: to two years ago. Obviously, What I would say is
Speaker 3: what we're seeing is the sort of bifurcation of spending.
Speaker 3: We'll have some folks that join us who, let's say,
Speaker 3: are not big spenders, they're out for an experience, and
Speaker 3: then we'll have some folks who are clearly out to
Speaker 3: party and have a great time and who will have
Speaker 3: a drastic spend. What I would say is, I'm starting
Speaker 3: to see a split of sort of people that are
Speaker 3: willing to kind of separate with those those dollars and
Speaker 3: people there's that are remaining sort of tight. But we
Speaker 3: have not seen a drop in reservations, which for us
Speaker 3: is kind of the tell.
Speaker 4: And when you're seeing that split there, I mean is
Speaker 4: how do you sort of gauge that as far as
Speaker 4: particular segments where your restaurants are located. Do you see
Speaker 4: that more so in particular parts of the country than others.
Speaker 3: It's across all of our restaurants, So we're in some
Speaker 3: pretty major, pretty major cities, but we're seeing it across
Speaker 3: guest spend, right, So we're able to gather the data
Speaker 3: based on the average guest spend and we say, well,
Speaker 3: wait a second, why is it a few bucks less?
Speaker 3: And then we go into like individual checks and what
Speaker 3: you'll see is people that are celebrating. Our corporate spend
Speaker 3: is drastically higher than it was last year. I think
Speaker 3: that might be a you know, as a response to
Speaker 3: return to work vis a vis couple of days in
Speaker 3: the office those few days, people are heading out to
Speaker 3: spend quite a bit more than they would Let's just
Speaker 3: say if they were in the office five days a
Speaker 3: week and had five days of spend but we're also
Speaker 3: seeing a lot of corporate gatherings small to medium sized
Speaker 3: groups as well. That's sort of like sweet spot between
Speaker 3: eight and eight and twenty. A lot of those types
Speaker 3: of bookings are coming through. And you know, it's not
Speaker 3: just families, it's a lot of corporate and workforce spend.
Speaker 1: Hey, go back to chef what you were saying about
Speaker 1: immigration and border policy here and connect back to what
Speaker 1: you see at restaurant. At the restaurants, well, you know, I.
Speaker 3: Can only speak from my experience, and it's anecdotal, right,
Speaker 3: I'm not coming from a place of data, But I
Speaker 3: can tell you who our applicants are, and I can
Speaker 3: tell you where they're from. What we used to have
Speaker 3: is quite a bit of Latino applicants, especially in the
Speaker 3: back of house, and that has changed. We are now
Speaker 3: not as not employing as many, and a lot of
Speaker 3: those that we are employing our first time hospitality employees.
Speaker 3: So I'm not sure if there was a move around
Speaker 3: the United States and move back home to their home countries,
Speaker 3: but I can tell you that the hospitality workforce is
Speaker 3: severely understaffed, and that would make a huge chunk for us.
Speaker 3: It has to be sensible but it has to be
Speaker 3: soon and that would probably mark a drastic change in
Speaker 3: your guest experience, its being better and the price that
Speaker 3: we have to charge.
Speaker 1: That's so interesting to hear, and because I think that
Speaker 1: part of the conversation often gets lost when we talk
Speaker 1: about immigration policy, because it's so polarizing when you have
Speaker 1: Democrats and Republicans fighting about it, and it actually sounds
Speaker 1: very clear from you. I'm wondering if you do any
Speaker 1: work in telling your local legislators about this, if you've
Speaker 1: partnered with any other restaurants to talk about this, because
Speaker 1: they're serious economic implications here.
Speaker 3: It is polarizing, and I think that you know, I'm
Speaker 3: a small business owner and I'm not coming at it
Speaker 3: from a political point of view.
Speaker 2: It's simply spaces that we need filled.
Speaker 3: We do some work with our local folks in each
Speaker 3: one of our markets. We do a lot to work
Speaker 3: also in some of the training and onboarding of folks.
Speaker 2: You know.
Speaker 3: Unfortunately, you know, the hospitality industry is one it is
Speaker 3: the largest employer in America. But our voice is not
Speaker 3: quite as unified as I think it probably could be nationally,
Speaker 3: and that could just be you know, a difference between
Speaker 3: states and and and also the competition in between.
Speaker 2: You know, small businesses.
Speaker 4: Talk to us about your YouTube series.
Speaker 2: Sure, yeah, thank you.
Speaker 3: So, you know, during COVID, for the first time, I
Speaker 3: had some some some some free time in probably twenty years,
Speaker 3: and I was looking around the media landscape of on
Speaker 3: the food scene, what's happening. And what I was finding
Speaker 3: is a lot of what was out there didn't speak
Speaker 3: to me. It was a lot of sort of how to,
Speaker 3: a lot of you know, uh, a lack of why,
Speaker 3: a lack of why cook this way or why why
Speaker 3: this produce? And and I felt like that storytelling it's
Speaker 3: inside of me. It's how we were in our restaurants,
Speaker 3: it's how we construct our menus and our concepts. But
Speaker 3: I didn't see it in the media. And so I
Speaker 3: wrote some short stories and I was lucky enough to
Speaker 3: get linked up with Jose Andres Media who who was
Speaker 3: a co producer and produced these.
Speaker 2: These pieces.
Speaker 3: You know, it's storytelling in the very simplest way. There's
Speaker 3: no talking, there's some music and ambient and it's sort
Speaker 3: of the chef's journey. The chef's journey is about community,
Speaker 3: and it's about bringing people around a table and I'm
Speaker 3: lucky enough to be able to be connected with these
Speaker 3: incredible farmers and fishers and winemakers and cheesemongers, and I
Speaker 3: really wanted to tell their story, but in a way
Speaker 3: that was perhaps not loud and ambasticking in your face,
Speaker 3: but a little bit more subdued. It was about connectivity
Speaker 3: and mindfulness.
Speaker 1: How do you do this in a way that without
Speaker 1: without talking?
Speaker 2: Well, I think the visual is is quite impactful.
Speaker 3: We really spent a lot of time thinking about the
Speaker 3: best way to tell a story without words, and hopefully
Speaker 3: what that does is it brings a viewer in and
Speaker 3: they fill in the story. I mean, I would throw
Speaker 3: the question back to you, have you ever made a
Speaker 3: recipe off of something that you saw on television?
Speaker 1: I have, yeah, but it always requires me to go
Speaker 1: back and like google it because it's just the way
Speaker 1: my brain works, like inspired by it, you know, right?
Speaker 3: And I think that that's kind of what this series
Speaker 3: is supposed to do. It's supposed to inspire you to
Speaker 3: lean into where did those tomatoes come from? And how
Speaker 3: are they being used? Not necessarily how to treat the
Speaker 3: tomato and cut one inch and that sort of thing,
Speaker 3: because I frankly quite boring. I want to know where
Speaker 3: it comes from and what was the life cycle of
Speaker 3: the tomato, not necessarily one inch or two inches. I
Speaker 3: find that actually most people would would say no to
Speaker 3: that answer that they don't cook from what they see
Speaker 3: on television.
Speaker 2: It's it's entertainment.
Speaker 3: And the style of entertainment that we're hoping to bring
Speaker 3: here with our partnership with Calm is one of mindfulness
Speaker 3: and connectivity.
Speaker 4: Yeah, once I get my cooking back caps back on,
Speaker 4: I will currently be doing this. I'm curious how you
Speaker 4: pick a particular food for each segment.
Speaker 3: Right, So what this series does is it focuses on
Speaker 3: a very small radius of locality. So within a couple
Speaker 3: of miles in Long Island, there's a small town called
Speaker 3: Southoldt and inside of that there's a biodynamic form called KK.
Speaker 3: There is an oyster fishery called Little Ram, and there's
Speaker 3: a cheesemonger called Coptapano. And what I really wanted to
Speaker 3: do is sort of bring you into this place it's
Speaker 3: very special and dear to me, and show you kind
Speaker 3: of what happens within a very small radius and a
Speaker 3: very intense kind of time as well. Summer of one
Speaker 3: year ago, basically summer of twenty twenty two.
Speaker 1: Hey, John, before we let you go, I am not
Speaker 1: very good in the kitchen, I gotta be honest. However,
Speaker 1: I loved the Bear, and I'm wondering if the popularity
Speaker 1: around the FX series The Bear has led to an
Speaker 1: increase in people just like wondering what happens in the kitchen,
Speaker 1: you know.
Speaker 3: I think I think there's a lot of conversation around
Speaker 3: also not only sort of the personality of a cook
Speaker 3: or what happens during a service. Yeah, so it's beyond
Speaker 3: the kind of recipes and sort of the action, but
Speaker 3: also the kind of the people that are producing those
Speaker 3: things and the kind of pressures that they're in.
Speaker 2: I'm thankful for that story to be out there because
Speaker 2: I think it's one that's it needed to be told.
Speaker 3: But also when you've got like a good look in
Speaker 3: dude cooking and screaming and yelling, there's like great inspiration
Speaker 3: that hopefully will come to more folks joining us.
Speaker 1: John Fraser restaurant ur and chef. He's the founder. If
Speaker 1: you have restaurants, we love it when you join us.
Speaker 1: Thanks so much.
Speaker 4: This is Blueberg, all right, Tim, So the hype in
Speaker 4: artificial intelligence, as we know, is everywhere. But what about
Speaker 4: when it comes to the intersection of AI and retailers. Well,
Speaker 4: there is a company that is powered by AI that
Speaker 4: is aiming to bridge that gap and makes selling easier
Speaker 4: for companies, especially when you're talking about Bloomingdale's, Macy's, the
Speaker 4: gap back to school purchases obviously starting up right now
Speaker 4: and then also ahead of the holiday shopping season. Joining
Speaker 4: us now is Perva Gupta, co founder and chief executive
Speaker 4: officer at lily AI, joining us on zoom from Palo Alto, California.
Speaker 4: Thank you so much for joining us. Talk to us
Speaker 4: about what your company is and what you do, just
Speaker 4: to set the scene here.
Speaker 5: Thank you so much for inviting me. Jess, It's so
Speaker 5: nice to be here.
Speaker 2: Yeah.
Speaker 5: So my company is, it's called lily AI. We are
Speaker 5: working with some of the largest brands and retailers. But
Speaker 5: let me ask you a question. I'm sure you shop
Speaker 5: online all the time, and I do.
Speaker 4: I've gone through this.
Speaker 5: Have you gone through an experience when you're looking for
Speaker 5: something as simple as a navy blue sweatshirt and you
Speaker 5: are getting no results or you're getting even worse. Adalypsticks
Speaker 5: and slippers, and so it's not that they don't have
Speaker 5: navy blue sweatshirts. That's a basic search. But the reason
Speaker 5: why that's happening today is because the way that the product,
Speaker 5: the way this product or the way the products are
Speaker 5: described at retailers are in the language of midnight French
Speaker 5: terry at leisure. So like, that's why you're not finding
Speaker 5: it because it's not called navy blue sweatshirt. It's not
Speaker 5: labeled in the language that us as consumers use. And
Speaker 5: so that's what Lily AI does. We are using AI
Speaker 5: to bridge the gap between retailers speak and consumers speak
Speaker 5: in retail and this is the perfect type of problem
Speaker 5: that AI can come in and help solve. To understand
Speaker 5: the language of the consumer, use AI to extract those
Speaker 5: attributes out of the images of the product catalog and
Speaker 5: then help the consumer experiences.
Speaker 1: Okay, so you got to explain to me, like I'm
Speaker 1: a five year old, how AI is being used here
Speaker 1: and how it's training itself. It's retraining itself. Take us
Speaker 1: through the basics.
Speaker 5: Absolutely. I'm also happy to go a little bit further
Speaker 5: up here with all the hype in AI to sort
Speaker 5: of also a sept the context. I mean AI is
Speaker 5: being used for years now. It literally started in nineteen fifties,
Speaker 5: and fundamentally, AI is when machines are mimicking human intelligence, right,
Speaker 5: and recently, generative AI is all the hype everybody's out
Speaker 5: of chat GPD. That's one type of AI. There are
Speaker 5: so many other types of AI, like computer vision, natural
Speaker 5: language processing, all of those types of things. And so
Speaker 5: now coming back to your question around how we use AI,
Speaker 5: we have basically built we use a type of AI
Speaker 5: called discriminative AI where we have created a lot of
Speaker 5: clean training data where merchants on our team over the
Speaker 5: last few years have manually labeled all of the products
Speaker 5: and added a lot of the language of the consumer
Speaker 5: on every single product.
Speaker 4: To do that kind of process seems very patient.
Speaker 5: Yes, it's a very very difficult process where you almost
Speaker 5: have to create the definitions in fashion in a very
Speaker 5: very clean mathematical way, where you know our merchants know
Speaker 5: the difference between boho and Boho chic, for example. Right,
Speaker 5: it needs to be really really clean data for AI
Speaker 5: to understand all of the different types of language that
Speaker 5: our consumers use or just overall consumers use. And so
Speaker 5: it's it's it's not an easy thing. It's a very
Speaker 5: very difficult labors process that we have gone through to
Speaker 5: be able to create all this clean training data which
Speaker 5: we then fed to our AI engines which now do
Speaker 5: which are now doing a really good job of predicting
Speaker 5: all of these attributes on these products, which is basically
Speaker 5: the images. So in short, we have built the technology
Speaker 5: that can extract attributes in the language that consumers understand
Speaker 5: out of images.
Speaker 1: So how do you how do you build these relationships
Speaker 1: with the biggest retailers out there, including Bloomingdale's, Thread up
Speaker 1: the Gap? How do you do that?
Speaker 5: Yeah, it's it's been a super exciting journey for us
Speaker 5: where we've had the we've had the pleasure of working
Speaker 5: with some of the most iconic brands and retailers in
Speaker 5: the world. It's the The overall pitch of Lily is
Speaker 5: as simple as you know, going to any of these
Speaker 5: sites where we are able to show in the search bar,
Speaker 5: do some searches and show to anybody that there's so
Speaker 5: much that is there's there's so much money being left
Speaker 5: on the table, which is a like lots of revenue
Speaker 5: for the business, but also from a consumer experience, perspective,
Speaker 5: there's so much that can be done to to make
Speaker 5: sure that your consumers have a really good shopping experience.
Speaker 5: And so it's not that difficult to sort of explain
Speaker 5: to some of these large brands and retailers the opportunity here,
Speaker 5: because this is like a search example like this for example,
Speaker 5: is very easy to understand. I think the bigger picture
Speaker 5: for all of these brands and retailers is also and
Speaker 5: they get it, is that this kind of a gap
Speaker 5: between the merchant's speak and the consumer speak not just
Speaker 5: impacts their on site search, but actually impacts their entire business.
Speaker 5: So all the way from when they are forecasting demand
Speaker 5: about a product to when they are doing all the advertising,
Speaker 5: you know, for their entire catalog, to when they're selling
Speaker 5: the product on their e commerce store, throughout the entire
Speaker 5: retail value chain. Because the fact that that navy blue
Speaker 5: sweatshirt is is not called that way, is not understood
Speaker 5: that way, and it's understood in different ways, it has
Speaker 5: a massive impact on the entire business. And so that's
Speaker 5: the other thing we are able to drive and make
Speaker 5: all of these brands and retailers understand, which makes our
Speaker 5: job a little bit easier are.
Speaker 4: You able to gauge shopping trends?
Speaker 5: Absolutely? You know, that's that's that's a super exciting part
Speaker 5: of our business. You know, trends, especially in the lifestyle category,
Speaker 5: make a big part of what what keeps the consumer,
Speaker 5: you know, going back to to just shopping. And like
Speaker 5: this summer, Barbiecore was a massive trend. Before that, there
Speaker 5: was quiet luxury, and as we are heading into the
Speaker 5: New York Fashion Week, there is going to be like, uh,
Speaker 5: there's going to be sturdy comfort. Uh, there's there's all
Speaker 5: sorts of trends, and we are in the business of
Speaker 5: operationalizing these trends, and so like if if we take
Speaker 5: Barbiicore as an example, that trend became a trend, you know,
Speaker 5: even before the movie came out, and so like feb
Speaker 5: March is when that start, when when that term started
Speaker 5: becoming a massive trend. And so we were able to
Speaker 5: help all of our customers attribute their entire catalog appropriately
Speaker 5: with Barbiecore, so that when consumers were searching for these things,
Speaker 5: they were absolutely able to find thing that they liked.
Speaker 4: Well, thank you so much for your time. We'll have
Speaker 4: to have you back again to talk about the shopping
Speaker 4: trends and the consumer. Pervagupta, co founder and chief executive
Speaker 4: officer at lily AI.
Speaker 5: We'll have more coming up.
Speaker 4: This is Bloomberg