Can food halls help diversify the post-pandemic restaurant industry? Yes, if done right

Food halls are building back even bigger as restrictions are lifting. How do we make them better for all?

By Ashlie D. Stevens
Published June 16, 2021 5:39PM (EDT)
La Cocina Municipal Market (Erin Ng/ La Cocina)
La Cocina Municipal Market (Erin Ng/ La Cocina)

Daniel Wu, the former owner of Atomic Ramen, described the closing of The Barn, which was the first-ever food hall in Lexington, Ky., as a gradual shuttering. The project had been the subject of a lot of local hype, serving as a centerpiece of a $156 million mixed-use suburban development called The Summit. 

When it first opened, Wu told me during an early June phone call, the energy at The Barn was electric. Customers would move in packs from stall to stall — featuring burgers and seafood, Greek food, a full whiskey bar, and local ice cream — before congregating in the dining room. The camaraderie between the stall owners was solid, too. 

"My favorite part of doing that whole venture was that I was in there with a whole bunch of people I liked, and honestly, we worked well together," Wu said. 

But then the pandemic hit and, one by one, Wu and his fellow chefs began to debate closing their respective stalls. The success of food halls is predicated on in-person business. As lockdowns were enacted, there was no telling when operating at capacity would be possible again. 

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"We kind of discussed it among ourselves, all the owners, and some people wanted to stay open, some wanted to be closed and I was like, 'Man, if half of us are open and half are closed, it's going to look so bad in here,' like kind of dystopian, you know?" Wu said. "It looks slapdash and unprofessional, and we ended up finally deciding we were going to 'close down for now.' So we shut down temporarily, and then, of course, temporarily became permanent when we realized it wasn't going to turn around for most of us anytime soon." 

The Barn officially closed its doors in May 2020 — only four months shy of the business' third anniversary. But now, as shutdown-born restrictions begin to lift, communities all across the country are eying food halls as a potential avenue towards economic revitalization. Some also recognize the potential therein to more deeply invest in local restaurant owners and culinary professionals of color, two communities largely left to flounder last year without federal government assistance. 

The prevalence of food halls has skyrocketed over the last decade. Some publications initially dismissed the concept as a millennial redux of the tried-and-true mall food court (and, thereby, another example of food-centered nostalgia like the return of Pizza Hut's original logo and the re-release of New Coke), but there are some key differences. Instead of Sbarro and Jamba Juice, most food halls are filled with independent vendors. 

It's not a new concept, per se. Cleveland's West Side Market, for instance, began operating in 1840, while the world-famous Chelsea Market — which was purchased by Google parent company Alphabet Inc. in 2018 for $2.4 billion — was redeveloped to have a concourse of food-based tenants in the early '90s. 

However, as interest in both fast-casual dining and supporting local chefs has continued to surge, food halls found their way into the center of that Venn diagram, much like food trucks did before them. In 2010, there were only 25 food halls in the entire country. By 2016, the Wall Street Journal reported that there were more than 100.

Experts then predicted that, by 2020, there would be close to 300 food halls in America. As with the case of The Barn in Lexington, the pandemic was the first real disruption to the trend, which is now picking back up again as a spate of new food halls are opening in the coming weeks and months. 

S&W Market is opening next week in Asheville, N.C., with a "starting lineup of five locally based stalls, encompassing everything from tacos to ice cream to Thai steamed buns," according to Eater. Atlanta is gaining another food hall in 2022, which is being described as a 28,000-square-foot "boutique food market" with 21 stalls.

In St. Louis, City Foundry— the city's first food hall — will open later this summer. In an emailed statement, a representative from the business said it anticipated that the food hall model would only continue to gain traction as pandemic restrictions lift. 

"The restaurant industry went through a transformation during the pandemic," they wrote. "Guests expect variety at their fingertips, given the ease and rise of ordering online. However, people crave that personal experience again more than ever. Food halls can offer a wide range of cuisine while also offering that dine-in experience. It provides a network effect for restaurant owners who can now benefit [from] sharing common space with each other and satisfying customers' desire to try several different dishes in one sitting."

For stall tenants, this is one of the biggest upsides to the food hall model. In normal times, there is a nearly guaranteed level of foot traffic that can be hard to mimic at brick-and-mortar restaurants, especially if you aren't in an urban hub. The diversity of choices draws a steady crowd. 

According to Wu, stall tenants help each other in more tangible ways, too. 

"We did marketing together, as well as little 'economies of scale' stuff, where let's say we had to get pest control," he said. "We're in one building, so we just had the company come and regularly spray the whole space, and we'd split that. We'd talked about going in together on a linen service because it would be cheaper."

Stall tenants are also not typically charged with building out their own spaces. 

"Food halls represent an opportunity for a restaurateur to set up for business at a relatively modest cost," said Rick Moses, the developer of Citizen Public Market, which opened in Culver City in November. "The developer builds out the common areas, including seating and all utilities and service functions. The tenant simply has to pay for the kitchen and the counter, which allows talented chefs to get back in business on a faster and more affordable basis."

This isn't to say that the stalls themselves are cheap. Per Wu, his operating space for Atomic Ramen was about 600 square feet and was "probably some of the highest rents for that kind of space and Lexington." However, for many, the barrier to entry and overhead costs definitely feel lower than those associated with launching a 2,000 square-foot standalone restaurant. 

The appeal to investors and developers is apparent, too. While many brick-and-mortar retail spaces are having to contend with changing shopping habits, food halls draw crowds. Additionally, many serve as the ground floor of mixed-use buildings, while the floors above are office or residential. It's a tremendous amenity for tenants, which can drive up both in-building rents, as well as the rents of the surrounding properties, enough so that some view food halls themselves — especially those of the sleek, upscale variety — as harbingers of gentrification. 

However, while local chefs are so often the cogs that keep the food hall machines running, the pandemic revealed that their respective businesses weren't prioritized in the same way that the Shake Shacks and Ruth's Chrises of the country were amid shutdowns. Last year also spotlighted once again how the contributions of chefs of color are often dismissed or underfunded. 

This raises an important question: As food halls continue to build back, can they build back better instead of just bigger?  

Caleb Zigas, the executive director of La Cocina in San Francisco, thinks so. Founded 16 years ago, La Cocina is a nonprofit organization dedicated to providing affordable commercial kitchen space and industry-specific technical assistance to low-income women of color and immigrant women — most of whom started with less than $5,000 in capital — who are launching, growing or formalizing food businesses. 

Until this year, their mission was carried out completely through a 4,400 square-foot commissary kitchen, which customers weren't allowed to enter. However, in April, they opened the doors to their own ambitious food hall, the La Cocina Municipal Marketplace. Filling the space are seven women-owned businesses, including Estrellita's Snacks, a pupusa stall by Estrella Gonzalez, and Teranga, where chef Nafy Flatley will sell Senegalese dishes. 

According to Zigas, La Cocina moved towards opening a food hall to show other cities that there was a "different way they could invest in institutions to support a working-class entrepreneurial landscape." 

"What tends to be the business model of those marketplaces was really real estate and developer-driven," he said. "They didn't often include a commissary kitchen space, so while they might have been cheaper by the square foot with lower start-up costs, the actual ceiling was too low to really envision making a living there. With all of the costs that were included, your percentage of rent was almost always too high, and you needed to have additional commissary kitchen space outside of the site." 

The organization's Municipal Marketplace includes kitchen space for its tenants, who represent the core values of La Cocina's longstanding mission to uplift women of color. Filling the space are seven women-owned businesses, including Estrellita's Snacks, a pupusa stall by Estrella Gonzalez, and Teranga, where chef Nafy Flatley will sell Senegalese dishes. 

"And if we do this right, these working-class entrepreneurs might be able to serve food that working-class residents of our community can also afford," Zigas said. "It doesn't have to be an act of violent gentrification, right? This can be a participatory process." 

Zigas said food halls are an opportunity to support local food entrepreneurs — the kind who were overlooked during the distribution of Paycheck Protection Program (PPP) loans, unlike big chains — who otherwise wouldn't be able to sustain themselves financially through cooking. 

"The Marketplace is an attempt to create a space where businesses can make a living, essentially making one great thing," he said. "Maybe there's this woman in your neighborhood who makes the best pupusas you've ever had. We want her to be able to make a living and have some economic freedom making that product without having to build out a big fancy restaurant." 

 

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Ashlie D. Stevens

Ashlie D. Stevens is Salon's deputy food editor.

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Diversity Food Food Halls Kentucky La Cocina Pandemic Reporting