Legal Sea Foods has become almost as synonymous with "New England" as the lobsters they serve — so the Massachusetts restaurant chain made headlines this week when it announced its sale to Medford-based PPX Hospitality Group, which also owns Smith & Wollensky and three Strega locations. Legal Sea Foods CEO Roger Berkowitz joined Joe Mathieu on GBH's Morning Edition to discuss the sale, and how the pandemic has impacted the restaurant industry.
"You know, life throws curveballs at you. It's really unpredictable," Berkowitz said of the sale, which comes just a year after the restaraunt chain had expanded its high-end seafood offerings. "What I've learned over the years [is] you always have to have I guess a plan B in place, or options in terms of what you do. If you're too myopic, you leave yourself open to things you can't recover from."
Part of being a successful entrepreneur, according to Berkowitz, is always thinking ahead to what might come next — and, when possible, creating multiple plans for multiple outcomes. "You always have to be thinking ahead and anticipating what could or what might happen, both good and bad," he said.
WATCH: Berkowitz on how his family got into the food and grocery business
Even after the sale, Berkowitz is not retiring from Legal Sea Foods; rather, he will return to his retail roots by overseeing the brand's online operations, an undertaking he began years ago when the company first started experimenting with e-commerce. "We called it 'mail order' back then, or 'catalogue sales,'" he said. At the time, Legal Sea Foods' e-commerce business focused on orders for seasonal gatherings and special occassions — think, ordering lobster for an anniversary or shrimp for a birthday party — but Berkowitz and his colleagues saw the potential for expanding online offerings for "more everyday kinds of scenarios."
Those scenarios presented themselves pretty quickly as the pandemic unfolded, slowing down or shuttering the usual channels for seafood distribution: retail grocery stores and, of course, restaurants. According to Berkowitz, before the pandemic, "60 to 70 percent of seafood, the great seafood, was always served in restaurants."
"Herein lies the opportunity," Berkowitz said. "Why don't we take our expertise, we'll have some of the recipes that we've developed over the years, and put it into a different channel, if you will. I think there was always a growth potential for that, but what happened with the pandemic — and people not going out or not having enough confidence to go into restaurants at this point — this became sort of a perfect venue for us to expand what we've always wanted to do."
When asked about the fate of the restaurant industry post-pandemic — especially after a challenging winter ahead, with major surges in the coronavirus across the country and limited options for outdoor dining — Berkowitz said, "That's a very good question, and that's really an unknown question at this point. Look, I'm going to assume there's always going to be a need for restaurants. Will there be a need for as many restaurants? What kind of restaurants?"
WATCH: Berkowitz on the challenges of the restaurant business model, pre- and post-pandemic
While maintaining business as usual amid standard costs and less revenue is not an option for most restaurateurs, Berkowitz noted a few potential options: sit out the pandemic, and then look to grow by expanding to more locations or additional offerings, or cut down on costs by closing some locations and focusing on a smaller operation. For mom-and-pop establishments, where it's typically easier to control expenses, Berkowitz suggested going the take-out route to stay afloat until the pandemic subsides.
And when, exactly, will that be? "Is [the restaurant industry] coming back in nine months? Is it coming back in a year? No one really knows that right now, and so that's really the difficulty that restaurants have right now. If they could see the end of the tunnel, then they could plan accordingly. But no one can plan during this pandemic."
