As Pat Martin stressed over canceling a spring break trip to the Bahamas, it became clear he had bigger problems. Within a 10-day span, the barbecue icon’s entire business “drove right off a cliff.” All of his restaurants were nestled in neighborhood communities, except for a downtown Nashville location, which proved the true bellwether for what was to come on a national scale. Conventions boarded up. Even March Madness got clipped.
That moment provided Martin a jolt of reality. And a question: “What are we going to do?” he recalls.
Roughly a week later, Martin, a Nashville-based pitmaster who’s earned national attention and acclaim over his career, with appearances on the Food Network, CNN, and The Today Show, listened as officials mandated dine-in closures at his growing restaurant empire, which includes fast casual Hugh Baby’s (four locations) and Martin’s Bar-B-Que (10 stores). Business dropped 60 percent.
Two things happened next. Martin had to figure out the labor and facilities of flipping his business. Both concepts offer drive-thru, but now the model had to fine-tune as the lone channel. Consistency and speed became the playbook. “We couldn’t afford to make mistakes,” Martin says. “It forced me to get back into the day-to-day of my operations.”
Martin tied his apron back on and re-racked the company’s approach. Coupled with the challenge came the realization they’d need to let “several hundred” employees go.
“That’s a horrible thing, because if you’re ever in a situation in ‘normal’ life and you have to let a couple of good employees go because the restaurant is slow, that’s really painful. Put a couple of zeros on that number and it’s horrific. It’s gutting,” he says.
The company was down to managers with cut salaries. Before, Martin shot for 23.5 percent all-in labor and had to reengineer so he could hold that metric. It took three-and-half weeks to figure out.
Restaurants went from looking like a kitchen with a dining room to a kitchen with a storage unit. But outside of the downtown spot and one Hugh Baby’s, Martin was able to keep every location running, adjusting daily or weekly. The first few weeks, as noted, centered on labor and facilities. Then, from March to mid-April, there were big, “utterly giant” changes in how the brands operated. Curbside, drive-thru, and third-party delivery became top-line aims.
It was a state-by-state, store-by-store battle to keep up with evolving regulations after that.
Even Martin’s culinary DNA had to weather conditions. “The biggest thing that affected me was whole hog cooking, that was the gut punch,” he says. “We had to go to cooking half hogs and at a few locations, or just shoulders, because we didn’t have the guest count needed to exhaust it. I don’t like cooking half hogs—it’s more of a romantic preference than quality. I don’t just reheat stuff until I’ve gotten rid of it, I sell it that way and that’s it.”
“My cooking philosophy didn’t change because of the pandemic,” Martin adds. “When you start getting desperate and passing those inefficiencies to guests, that’s cancerous. But my hog farmers felt it, and then you get into supply chain issues. We buy from 21 hog farmers who’ve got hogs on the ground and I didn’t have an answer for them.”
Taking care of workers never left Martin’s mind. The downtown location opened up, essentially, as an employee restaurant. They’d cook a couple of meals every day for workers and families. Martin tried to remain tethered to employees throughout and check in. “What I didn’t realize then but what I am hearing from them now, is what that meant to them. It really solidified the culture that we have at both brands. They had a sense of security that their job wasn’t going away, that we were all in this together and we just had to get through it. My salaried managers took a cut, but my crew labor did not,” he says.
Employees began to come back as sales did. Martin also released a book, “Life of Fire: Mastering the Arts of Pit-Cooked Barbecue, The Grill, and The Smokehouse” and, on January 13, opened a Hugh Baby’s in Charleston, South Carolina—the first opening since pre-pandemic times.
The location marks Martin’s second venture into the community (a Martin’s Bar-B-Que Joint opened in 2019).
As the store got ready to serve The Holy City, QSR caught up with Martin to chat about the journey since 2020, where the company stands now, and the opportunities ahead in a post-pandemic restaurant world.
Firstly, tell us about the new opening and what to expect of the fast-casual service model.
I already have roots in Charleston with Martin’s, so it has very much become a second home. Personally, the comfort there is extremely strong, and I have a ton of relationships with chefs and folks in the industry. On the professional side, my long-term COO John Haire lives there, and I have an immense respect for him as an operator—I sleep well at night knowing that John is going to maintain the brand standards. Really what that means is a base culture and identity on all the little things—are the pickles even on the burger or are they bunched up? If they are even on the burger, the guest gets the same bite each time. Looking at Hugh-Baby’s in Charleston, it was a natural fit. We have been planning on it for a few years now and COVID obviously shelved it. This past summer we were finally feeling like we were actually coming through COVID on a restaurant standpoint, not a society standpoint, therefore we felt comfortable going ahead and moving forward.
It’s been a while since we last spoke, in August of 2020. Back then we were talking furloughs, 100 percent off-premises switches, and how you had to put your apron on at each store and re-rack the model. When did the comeback begin and what did it look like?
The comeback from a societal standpoint felt like it was well over a year. From a restaurant standpoint, we are still not completely out of it. The domino-effect was as follows: COVID hit and we shut down, we then had to change our business model or adapt. It wasn’t just the restaurant business that did that, it was all industries. The manufacturing facilities also had the same dilemmas so we quickly got into a supply and demand nightmare because a lot of these manufacturing facilities would cut their staff back to at least 50 percent, and some shut down. Later that year, in 2020, we began seeing the beginnings of the next wave of difficulty. There was a time where we didn’t know if we could buy pork shoulders. If you can imagine, pork is the backbone of this restaurant and brand, and I had to think about taking it off and not serving it.
After that, we had to deal with stuff like chemicals—the ones we utilize to clean our locations i.e. random stuff such as the company that makes a cap for a degreaser shut its plant down so the company that makes the degreaser couldn’t get the caps to be able to sell it. An itty bitty thing like that had an immense trickle effect. Then, of course, we come to the issue of labor, which was so far reaching and is a whole day’s worth of conversation right there. The restaurant industry kind of evaporated and people decided this was their chance to follow their dream, to go back to school, and not live this restaurant lifestyle, because it is a lifestyle.
Management dried up and people started thinking we would forever be in this environment of being able to work from home and not come in to work. The fact is, that just didn’t work out. Eventually people still want to leave their homes and go eat, and that requires the human element there to enable it. Wages adjusted and shot up enormously and we had to adjust in terms of our price—that’s what happens in normal economic cycles, but this was not normal. It was very abrupt and was difficult to manage a business, like getting a right hook, then a left hook and another right hook, then a body shot. You look at COVID in its initial phase and then we came back and couldn’t get any labor. When we could get labor, the supply and demand was so off kilter, and the wages were so incredibly high as opposed to how we all were in the industry from a price standpoint. At the same time, we were coming up against raw materials and manufacturing facilities shutting down, operating at 50 percent capacity, and with limited access, prices shot way up. Still if I were to go to construction right now, we are slowing down our growth because we can’t get what we need. For example, garage doors have a 9–10 month lead time and that’s a big part of the brand at Martin’s. So we are still not out of it, but it feels a lot better than it did a year ago, or even six months ago.
How has business at your concepts settled? If I recall, you had to adjust facilities for the drive-thru push, basically the café started to look like a kitchen with a storage unit. What COVID pivots stuck around and which left? Mainly, what does dine-in service look like these days?
People want to dine out, they just do. It’s in our blood, it’s humanity. We like going to dinner, we like going out. I would say everything has settled back into the original restaurant model for the most part, however, our off-premises sales, our ratio of sales has shifted and has grown as opposed to before COVID and that is permanent, I think. Anything that is not eating within the dining room is considered off-premises. That includes DoorDash or third-party pick up and you driving to the restaurant to pick up or you driving through the drive-thru. As a result of COVID, that ratio really shot a spark into UberEats, DoorDash, and third-party deliveries, fully establishing them and giving them permanence. We are all guests and diners, and we dine at home way more than we did before. It is just inconvenient. There are still some things that need to be cleaned up on that end, but it’s just inconvenient. The only thing that COVID brought that is still sticking around is a higher percentage of off-premises sales, but the dining rooms are for the most part full.
How are you playing the balancing act between dine-in and off-premises?
If we had 35 percent off-premises leading up to COVID, it is now like 45 percent so it’s more of a simple adjustment. Supply costs are now higher because of that. The balancing act of having to figure out one or the other didn’t apply to me because I was already deeply involved in the off-premises business. When you have a drive-thru, you are involved in the off-premises business. The adjustment of completely going off-premises was an adjustment, but I didn’t have to learn it from scratch. For me going up 10–15 percent as opposed to what it was pre-COVID doesn’t move the needle that much as far as our lifestyle and how we run the business.
Let’s get into labor. How has that come back and has the model shifted?
A large part of the folks that work in the restaurant industry have come back. The biggest thing that has come back for us is management. There was a time where you couldn’t hire a manager, you had people that were hourly employees applying for manager jobs because the supply was so low—they just didn’t have nearly enough experience to make it worth it to hire and that was very difficult. The supply has come back, the wage escalation is still there and it’s not going backward—in my opinion. Personally, I think it’s here to stay, prices have adjusted and we’re no longer talking about minimum wage anymore, our average wages jumped 30–50 percent and are still there.
You’ve spent the last 16-plus years prioritizing your team’s health, offering employee care benefits, and mentorship to all that work within the company. What are some of the keys to recruitment and retaining employees these days?
Maintaining that mindset and understanding that it’s not all about money with employees. They want to be appreciated and want interaction from our executive team. We have been working pretty hard to remain aware of what their needs are and are doing the best we can to make them happen. Everybody wants to work and make their tips–from a financial standpoint, if you are in the restaurant business on an hourly wage basis, your take is significantly better than it was before COVID. You couple that with a leadership team that actually cares about you and isn’t just empty promises, that’s a good quality of life. You have to keep caring for your employees because they are the ones caring for your guests, and the guests are what drives the business.
What is the commodity market like today?
It’s still very disrupted and now we have a war in Europe frightening markets, so that is the next domino effect to this COVID element that I spoke of earlier. Egg prices are at astronomical, historical highs. There is no resting on the commodity markets right now—you deal with one sector of raw materials and as soon as you fight that fight, you start gearing up because there’s another fight coming somewhere else for another sector of raw materials. I don’t think that’s going to settle down until we get through another 6-8 quarters, because we at least have to get on the other side of this inflationary period that we are in.
Hopefully within a year and a half to two years the strife between Russia and Ukraine will come to some settlement and there will be easing within the global markets for raw materials, because they all affect each other. Take soybeans for example–Russia, Ukraine, and China are the dominant buyers on the global stage and when you have disruption on a socio-political standpoint, it disrupts its markets. When markets are disrupted, the dominos start to fall, i.e. all the grain industry is disrupted, prices for feed rise which means proteins that eat the feed rise. Things are very up and down and turbulent. Not just from Russia and Ukraine, but there is a lot of uncertainty in our relationship with China that has been relatively stable for the last 30-40 years and right now, no one can say that the relationship for the next 30-40 years is going to be stable at all.
If you could, sum up the state of barbecue in the country. Personally, it feels like there’s a lot more interest in regional barbecue in new markets, but it’s always been a very interesting subject state to state (we’re in North Carolina).
Agreed, it’s very healthy, the national interest has been there for quite some time and seemingly isn’t going away. There’s pros and cons to that. From state to state, the regional cultures of barbecue are what make barbecue so special and you don’t really find that localized in other food spaces. Yes, there are different kinds of pizza and burgers might change slightly, but with barbecue it’s more broad. Barbecue is like France—France has their cheese, you drive 50 miles and it changes. It’s the same thing in barbecue and that’s what makes it interesting and unique. The downside is that as a society we may grow up in one certain part of the country and move to another part, and now it’s so prevalent to want what we had wherever we grew up. When there’s enough people you end up having barbecue menus that are homogenous, mine being one of them. We lead with our roots, which is obviously West-Tennessee Whole Hog Barbecue, but we also have beef brisket on the menu because there are so many people from West of the Mississippi that live in Nashville.
That’s just the way it is in every major city—you’re seeing menus and menu offerings start to look the same from city to city. Is that a good thing? I don’t know that it is, but I don’t know if it is a bad thing … people can get what they want. It becomes a negative thing if we lose our identity at the localized level. Regarding Martin’s, if I were to ever abandon West-Tennessee Whole Hog Barbecue, then it’s gone. What am I? What is the business about? What’s the point of difference? What are its roots? Most barbecue restaurants East of the Mississippi are serving brisket whereas 15 years ago it couldn’t be found on a menu. In the same vein, you’re now finding pork on most menus in Texas, and I can most certainly tell you 15 years ago that was not the case at all.
How do you see your restaurant group developing in the coming years?
We are going to take it a year at a time and see what cards are dealt with everything going on in the world.