Farmers Restaurant Group weathers the pandemic storm
The outlook for North Dakota Farmers Union's restaurants will depend on how long business restrictions last and how long customers continue to use takeout and delivery services.
JAMESTOWN, N.D. — North Dakota Farmers Union in 2005 looked for an innovative way to market family farm products to consumers. Three years later, North Dakota’s largest agriculture group started Founding Farmers restaurant in Washington D.C. Six more restaurants — five in the D.C. area and one in Pennsylvania — followed. Now Farmers Union and its Farmers Restaurant Group are hopeful that innovative strategies will keep the restaurants alive through the COVID-19 pandemic.
“It’s usually really fun to talk about restaurants, but this moment in time it’s not as much fun,” says Mark Watne, North Dakota Farmers Union president.
Before the pandemic led to the shutdown of in-person eateries, Farmers Restaurant Group locations were serving about 50,000 people every week and providing a subtle education about where food comes from and the importance of family farms, Watne says.
The restaurant group had about 1,200 employees before the restrictions were put in place; the company laid off almost 1,100 right away. “That’s the sad part,” Watne says.
He says Farmers Restaurant Group has tended to hold onto employees longer than many restaurants in what is a high-turnover industry. High tips and a management team that tries to make the workplace have a family feel have helped. So, he believes many employees will return when restaurant restrictions end.
The North Dakota Farmers Union establishments aren’t alone in having to let go of employees. The National Restaurant Association says that since March 1, the industry has lost more than 3 million jobs and $25 billion in sales, and roughly 50% of restaurant operators anticipate having to lay off more people in April.
However, the remaining employees at Farmers Restaurant Group are still working. The restaurants are offering curbside pickup and delivery services. In addition to food, they’re selling some staple groceries, meal packs, hand sanitizer from one of the company’s distilleries and even toilet paper.
“There’s some neat little things like staples that we’re providing for people to pick up for a reasonable price, and it’s helping us to survive,” Watne says.
Bruce Grindy, the National Restaurant Association's chief economist, in an analysis released on April 13, said offering off-premises service alone can’t make up for on-premises sales losses, but the proportion of consumers using off-premises food service remained relatively constant during the last several weeks.
Six in 10 adults surveyed by the association reported ordering takeout or delivery for a nighttime meal in each of the past seven weeks, and four in 10 adults said they used such services for noon meals. Those numbers are similar to pre-pandemic levels; off-premises breakfast orders have declined slightly but one in five adults reported picking up breakfast meals, snacks or beverages in the previous week.
But how long the restrictions remain in place also will determine whether the Farmers Restaurant Group locations — and many other restaurants — survive.
“The tough part of course is not knowing how long it lasts. We’re able to cover the cost of keeping people we have hired working at the current moment and our sales are growing. That doesn’t account for making the full rent payments and we’ve had an operating line of credit that we’ve extended,” Watne says. “If your question is, if we come back online in two months, then yes, we’re going to be up and running and we’ll be fine. If your question is about a six-month delay, that’s another window. Right now, people really support the concept of the curbside and the meals to go and the delivery and the package, but how long will they? Or maybe they’ll use it more. It’s a little unpredictable at this point in time.”
So far, the supply chain is still operating to get products to Farmers Restaurant Group. North Dakota Farmers Union operates its own truck to deliver some products to the restaurants, and that is still on the road, albeit moving a little slower than normal, Watne says. The truck still hauls products like sugar, honey and wheat from the Upper Midwest, picking up things like grits and cheese along the way. But now it’s also hauling on the side to make things more economical.
“It’s all just trying to survive at the moment,” he says.
Watne says the subliminal exposure to agriculture knowledge that Farmers Restaurant Group provides to customers is important.
“It would be really great if we could get that reestablished,” he says.
Farmers Restaurant Group had planned to open two more D.C.-area locations, though the pandemic has put those plans on hold for the time being. However, Watne says he believes restaurants that can survive will come back to strong demand.
“The people are going to want to be out,” he says. “I am convinced that people will go out more.”