The End of the Restaurant As You Know It

I walked into the Sweet Spot, a bar-meets-ice cream shop-meets-candy store, and found myself a taco.

It was about noon, but the Crested Butte, Colorado, store wasn’t yet serving shots of tequila or scoops of rocky road. It was technically closed, but there was another unexpected food option located in the same prime locale at the base of one of Colorado’s best ski mountains. Elevated Taco Supply was operating a cart in the 3,000-square-foot space, which was filled with arcade machines and hungry, ski boot-clad people, buzzing about in the booths as they noshed on pulled pork.

The conventional restaurant model is dying, and that’s a good thing. No longer is a single restaurateur or type of cuisine assigned to a single property. It’s all about feeling the foodie love and sharing space.

Spurred by the artisan food movement and more people moving into urban centers, shared dining spaces are the new normal. These restaurants are an extension of the sharing economy we’ve come to embrace through Airbnb, Uber, and Lyft.

Sharing space allows small businesses that ordinarily would not be able to afford a brick-and-mortar setup to take less risk, grow, and keep profits healthier. That’s certainly the case for the Sweet Spot’s owner, Laura Silva. Elevated Taco, which is owned by Brian Kuhn, covers about 30 percent of expenses associated with her highly desirable and expensive piece of real estate. Even better, it operates during hours the space would ordinarily be sitting empty.

Arranging various restaurants in a single property also helps tenants maintain customers interested.

“When there’s limited real estate, and maybe you have a product that doesn’t fill the customer’s needs completely, you can collaborate in a way that makes sense,” says Silva.

Similarly, the Sunflower on Crested Butte’s bustling Elk Avenue operates under one owner in the morning and afternoon as a deli before it switches ownership in the evening. The night business uses the same name—it has been nicknamed by locals as “The Moonflower”— but serves a totally different menu of farm-to-table small plates like braised pork belly and ragout. I could eat there twice a day and enjoy two completely different menus. Brilliant.

“The idea of restaurant co-branding and co-habitating isn’t new, but it has become more common, especially in the wake of the recession when it was challenging to obtain financing for new ventures,” says Annika Stensson, director of research communications at the National Restaurant Association, though she also notes that the organizaton does not keep statistics on this type of arrangement.

Of course, challenges can arise with this shared scenario.

“Sharing rent and utilities in one location can help keep operating costs lower, especially in high-rent areas, but branding can become more challenging if consumers are confused by two different concepts in one location,” Stensson says.

Splitting the same cooking space can also potentially be its own source of tension, especially when the menus are very different. However, it can also be the way for two different restaurants to test the waters of a shared space.

Silva and Kuhn had already been sharing a “commissary kitchen,” a commercial facility that several restaurateurs used at different times of the day. It’s because of that experience that Silva knew Elevated Taco Supply would work well as a partner in her space.

“There has to be a trust there. You have to be feeling like you’re on the same page, whether it’s the dress code [or] your approach to customer service,” Silva says. “We were very clear and came up with parameters on behavior and expectations.”

Operating two businesses in the same stand-alone space at different times isn’t the only way dining is changing.

Take Union Market in Washington, D.C., an industrial warehouse divided into stalls and occupied by over two dozen food-related artisans. A customer could spend hours there on a progressive lunch and cocktail crawl. Meanwhile, independent businesses share in the increased foot traffic that comes with having myriad choices for diners in one place.

Also in Washington D.C., partners Jamie Leeds and Gina Chersevani run Hank’s Oyster Bar and Eddy Bar, respectively, in the same Capitol Hill space. The oyster restaurant and cocktail bar are flawlessly integrated into the dining experience as a whole.

Then there’s Denver’s Union Station, a fully functioning train station that is enjoying the benefit of a $500 million facelift. On a balcony above the main foyer and dining area on the ground level there’s the Cooper Lounge, an independently run, open-air bar. Another watering hole, Terminal Bar, is right under it. Trendy restaurants and shops are tucked within the building’s ground-level halls. There’s even a hotel within it called The Crawford. You’d really never have to leave if you didn’t want to.

In Philadelphia, Reading Terminal Market features a mix of prepared food vendors and restaurantuers in the same building; it’s packed even during weekday lunches. Gotham West Market in New York City features nine different types of food vendors.

Seattle magazine reports that many city restaurant owners are finding it most cost-effective to open several concepts in the more expensive spaces to make the numbers work. For example, Trove has a cocktail bar, noodle restaurant, barbecue joint and parfait concept all under one roof.

These shared arrangements can benefit not only restaurateurs and customers, but also landlords. “It could be easier to get the rent [the landlord needs] to make sense of a deal,” says Courtney Key, a commercial real estate broker with Denver-based SullivanHayes. “I think for the consumer, it creates a lot of character. The synergies that businesses have when they are next to each other are really powerful.”

When restaurant businesses come together and break bread, we all get to feast on the delights.