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Subscription services for food and drink take off in Baltimore as restaurants look to survive coronavirus pandemic

Katelyn Jarkowiec(left) and Helena del Pesco at work in the kitchen at Larder, a restaurant in the Old Goucher neighborhood which is owned by Ms. del Pesco.
Katelyn Jarkowiec(left) and Helena del Pesco at work in the kitchen at Larder, a restaurant in the Old Goucher neighborhood which is owned by Ms. del Pesco. (Barbara Haddock Taylor)

This summer, Helena del Pesco eliminated indoor seating and served up tempeh burgers and fried chicken to guests in the courtyard outside Larder, her Old Goucher cafe. But with temperatures dropping and COVID cases rising, there were more empty benches outside, and fewer people lingered for meals.

For the umpteenth time since the pandemic began, del Pesco needed to get creative. Already she had begun offering an online store where customers could shop for goods like fermented hot sauce and handmade face masks. Others came to pick up community-supported agriculture (CSA) boxes from a local farm; del Pesco volunteered the restaurant as a drop-off spot.

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And then inspiration struck. Del Pesco drew up a plan to allow customers to sign up for a month of weekly meals from the restaurant at a discounted price. The name was a play off the CSA boxes she’d been stocking for months: Community Supported Restaurants. As she explained in an email to regulars: “This subscription will help sustain our business through the winter and support our community to enjoy Larder meals from the safety of home.”

The Community Supported Restaurant program got 50 new signups within three days of launching.

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More and more, food and beverage companies in the Baltimore area and elsewhere are turning to subscription programs and clubs to reach consumers whose consumption habits have done a 180 since March. The trend courts consumers accustomed to paying monthly fees for everything from Netflix to razors” and drives steady revenue for struggling establishments.

In addition to offerings like Larder’s, Angels Ate Lemons, a neighboring wine shop, offers a “wine share” or club where customers can pay anywhere from $40 to $120 to get discounted bottles. This fall, Orto in Station North launched a weekly “pasta club” selling handmade, uncooked pasta paired with sauce and garnishes at a discount.

“People we haven’t heard from since pre-COVID are coming out of the woodwork,” del Pesco said. Over half have added orders of organic produce. Some have gifted orders to family members.

Twenty-eight-year-old Sean Danaher and his wife jumped to join the new program; they are regular customers at Larder, which they like for its use of local ingredients and gluten-free offerings. They were too late. “My brother and sister-in-law bought one for us before we could get one for ourselves,” said Danaher, who lives in Medfield. They decided to pay it forward: “We got one for our friends who just had a baby.”

Chicken Tagine, front, and Kuku Sabzi, back, are some of the menu items at Larder, a restaurant in the Old Goucher neighborhood, which is selling "subscriptions" for restaurant meals.
Chicken Tagine, front, and Kuku Sabzi, back, are some of the menu items at Larder, a restaurant in the Old Goucher neighborhood, which is selling "subscriptions" for restaurant meals. (Barbara Haddock Taylor)

Such programs may be particularly appealing to millennial customers, who have grown up with other subscription services. “They’re the Netflix generation, and they are used to having a subscription across different industries,” says Hudson Riehle, senior vice president for research at the National Restaurant Association. “There’s little doubt that going forward … more restaurant owners will be engaging in some type of subscription service.”

The subscription model is an old one, dating back to subscriptions for books in the 1600s. But it’s a relatively new idea for restaurants, said Ven Sriram, who chairs the department of marketing and entrepreneurship at the University of Baltimore. In more recent years, local bakers began selling bread subscriptions in the Baltimore area.

The trend is national. In February bakery chain Panera unveiled a coffee subscription program to allow customers to get unlimited coffee or tea for a month for $8.99.

“The psychology of it is interesting,” said Sriram. “It kind of bonds the consumer to the business.” For example, while people working from home may be less likely to stop off at their local Panera for lunch, the $8.99 coffee service could become the excuse they need to take a break.

“Part of the charm of this thing is that from a consumer perspective there’s a fairly substantial discount,” said Sriram. Even with discounts, the reliability of subscription revenue has a benefit for business owners, who can suddenly count on at least one source of cash. “Certainty has a value of its own,” Sriram said.

From a consumer’s perspective, Sriram says, such programs could be even more appealing if they come from local businesses.

In Windsor Mill, Derek Freidell and his wife, Julie, began offering a coffee subscription service more than two years ago at Gracefully Coffee Roasters, the specialty coffee roaster they opened in 2016. It had always been “a steady grower,” Freidell says. “When COVID-19 hit, it went through the roof.” Orders have quadrupled, and customers are signing up from places as far flung as the West Coast and Canada. “Sometimes I think I feel like a bit of an Amazon fulfillment center,” he joked. Not that he’s complaining; he’s grateful for the additional orders at a time when so many small businesses are going under. And he and Julie work hard to bring a human element to each order, including a handwritten note sealed with wax, something that customers appreciate.

Elan Kotz, owner of Orto, says his weekly “pasta club” has been a hit with customers since he announced the program this fall. Recent offerings include campanelle with broccoli and pistachio pesto — enough to serve two people for $25, significantly cheaper than a typical dinner at the elegant Italian restaurant.

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It’s not a price point Kotz would have considered pre-pandemic, but the coronavirus has thrown all the usual rules out the window. Today, his primary concern is keeping customers coming back. “I want people to feel like they have the best value here ... and come see us weekly.” And many customers add on things like focaccia, salads and drinks. Kotz said he began selling the restaurant’s wines barely above cost earlier in the pandemic, rather than keep it in storage. “I’d rather people enjoy a great meal [at home] and us keep revenue moving.”

So far, so good: The pasta club has sold out every week that the restaurant has offered it, at a time when on-premise dining is dropping off. It’s “a way to ensure we have some revenue through these harder winter months which are obviously almost here,” Kotz said.

The statistics for restaurants are dire. The National Restaurant Association says the food service industry is on track to lose $240 billion this year. One in six restaurants has closed permanently or long term, including big names in the Baltimore area like the Alexander Brown Restaurant and the Milton Inn. And 40% of operators think it is unlikely their restaurant will still be in business in February without federal aid.

And previous rounds of government assistance have long since run out. Earlier this year, Larder received a forgivable PPP loan, but that covered roughly eight weeks of employee salaries, says del Pesco. The influx of revenue from her new Community Supported Restaurants program couldn’t come at a better time. “It does help us know that we’ll be able to make payroll,” she said.

“It definitely adds some security,” said Larder cook Rebecca Karten as she cored apples for the cafe’s pie bars; she’s one of four employees at the cafe.

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In the end, the first month of the project was so successful del Pesco needed to cap it at 75 orders. After a week they sold out completely. Perhaps they’ll add more next month.

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