Adaptation, innovation are the keys driving Tucson’s restaurant revival | News

In a small, intimate space on the first floor of the hip VFW Loft apartments in downtown Tucson, Janos Wilder is preparing to celebrate the first anniversary of Studio Janos. Like the place itself, it’ll likely be a low-key occasion.

“It’s my retire-ish job,” said the James Beard Award-winning chef and restaurateur, who had spent decades building a legacy in Tucson’s culinary world before attempting to retire after closing his last restaurant, DOWNTOWN Kitchen + Cocktails, in 2021.

“I failed retirement,” Wilder admitted with a laugh. “I wasn’t working anymore, I didn’t have my restaurants and I hadn’t developed a bunch of hobbies. I realized that my first, my enduring love, continued to be to cook for people and provide great service.”

That realization led him to create Studio Janos, a unique venue that has allowed Wilder to continue doing what he loves, but on a much more personal scale.

“We have 12 seats,” he explained. “You buy the space for the night, and you can have up to 12 people. I do 100% of the cooking, there are multi-course menus, and a lot of it is based on local heritage foods. I really try to tell that story about who we are in Tucson through our food and what our food heritage is — but on a very, very high level. It’s a place where I can just do my very best work, have my most fun, and really entertain and feed people great food.”

While Wilder’s pivot came after finding himself at a personal crossroads, others in Tucson’s culinary community count the COVID-19 pandemic as their reset moment. In an industry where the margins were already thin, the pandemic forced restaurants to innovate rapidly and embrace change, whether through menu simplifications, expansions into catering or creative collaborations with other chefs and local businesses.

For some, like Wilder, this meant returning to their roots and focusing on the core elements that define their culinary identity. For others, it has meant exploring entirely new business models, from food trucks to streamlined menus, to keep their doors open.

“The ones that have been successful have changed their models,” said Shane Reiser, owner of Tucson Foodie, an online community of local food and drink enthusiasts. “They’ve launched catering companies. They’ve expanded and built commercial kitchens to make the food so that the overall cost of labor has decreased. There’s been at least a few restaurants that have launched food trucks, just for some supplemental revenue and also for branding and marketing — it gets them out there and attracts people back to the restaurant. And menu streamlining is also happening. You’re seeing restaurants offering more simplified menus.”

The effects of the pandemic, economic pressures and shifting consumer behaviors have all played significant roles in shaping the current state of the restaurant industry.

“We lost a thousand restaurants in Arizona during COVID and about $3 billion in restaurant sales,” said Steve Chucri, president and CEO of the Arizona Restaurant Association. “Not to mention laying off 80% of our workforce over a 48-hour period,” he added, recalling the initial days of the mandated shutdowns.

“So for all those reasons, I was somewhat concerned about what the future would hold,” Chucri said. “But to my surprise, we had a really strong bounce-back come 2021 and 2022, where we made up for all of those losses. Those thousand restaurants were replaced with new restaurants, and our employee rate started to climb — slowly at first, but then it really started to accelerate, to the point that we beat the national average on restoring our workforce in the post-COVID era.”

That recovery leveled off a bit in 2023, after the welcome novelty of getting back to restaurants wore off, and dropped a bit more this year. “This summer, what we’ve experienced for the first time since COVID is a slight decline,” said Chucri. “Restaurants have been down, on average, across the state about 8 to 15%. 

Still, the best are finding ways to stay afloat. “The restaurant industry is incredibly challenging,” Chucri warned, “and if you’re not on top of your game each and every day as it relates to your food costs, your labor costs and your real estate costs, you can find yourself in jeopardy pretty quickly.”

While the industry has shown resilience, it’s not immune to the broader economic challenges facing the nation. Inflation has significantly impacted operating costs, from food and labor to rent and utilities. Chucri pointed out that inflation is a “very big issue for our industry,” noting that restaurants cannot always pass these costs on to customers due to the competitive nature of the business.

Reiser echoed this concern, explaining how the traditional 30-30-30-10 economic model (where 30% of revenue goes to rent, 30% to labor, 30% to food costs and 10% remains as profit) has been severely strained. 

“Everything is increased,” said Reiser. “Rent’s gone up, and if you own the building, insurance and other things have gone up. So that 30% is now 32, 33. And then staffing, the cost of labor, has gone up a little bit — that’s now 33, 34%. And, of course, the cost of food and stuff has gone up.”

With rising costs in all areas, many restaurants are now operating on razor-thin margins, often just 1-2% profit, according to Reiser. This has led to some tough decisions, including reducing menu offerings, streamlining operations, and, in some cases, compromising on ingredient quality to stay viable.

Despite these challenges, Tucson’s restaurant industry remains a critical part of the local economy. Liz Pocock, CEO of Startup Tucson, says her organization has been instrumental in supporting local food entrepreneurs, particularly during challenging times. Through various programs since the pandemic, Pocock says Startup Tucson has helped a lot of aspiring cooks take their friend-favorite food concoctions out of their kitchens and into local farmers markets, self-run e-commerce websites and, in some cases, restaurants.

“The biggest challenge for these entrepreneurs will be the ability to keep up with demand or scale,” said Pocock. “Let’s say El Charro decides they want to serve your tortillas in all of their restaurants. Well, that changes your output from making X-number of tortillas to now making way more, and also having to package and transport your product. That’s a big hurdle for a lot of people.”

Gabe Gardner, director of food entrepreneurship at Local First AZ, a coalition of small businesses from around the state, also helps aspiring restaurateurs get their careers off the ground. So far, his group has developed four community kitchens around the Phoenix area, which offer anyone with a good food idea access to commercial kitchen space, as well as the resources and training needed to turn their ideas into sustainable businesses. Gardner says he’s working on opening similar community kitchens around Tucson.

“The first thing I ask when an entrepreneur comes into the kitchen is, ‘What’s the dream?’” said Gardner. If it’s viable, he’ll help them with the tools, knowledge and sometimes access to funding to get that dream going.

“Most of the time, restaurants or food enterprises don’t fail because people don’t know how to cook,” he said. “They fail because they don’t know the business end of it.”

Fortunately, Tucson has a uniquely collaborative and supportive culture among its restaurateurs, farmers and food suppliers. That community will be on full display during the upcoming Arizona Good Food Forum + Expo happening Aug. 27 at the El Conquistador Hilton Resort. The combined conference and food expo will provide an opportunity to connect, share educational insights, broaden local food relationships and business connections and strengthen communities across the state, tapping into Tucson’s model as inspiration. 

“I think Tucson actually is probably one of the leading communities in the state, as far as chefs and restaurateurs banding together,” said Chucri. “There’s a great camaraderie between them all. I think they do it very well.”

Reiser believes that’s one of the big factors keeping the city’s food scene alive.

“In classic Tucson form, I’m seeing a lot more collaboration,” he said. “Restaurants and chefs are coming together, they’re helping each other get through it, and they’re collaborating. They’re doing pop-ups together, they’re featuring each other’s dishes and ingredients on each other’s menus. That’s just really nice to see, the power of community to help you get through hard times.”

“They cheer each other on,” agreed Pocock. 

“It’s like they always say: a rising tide raises all ships,” added Gardner.