The future of restaurant growth

Caroline Styne on the unconventional, emotional, organic evolution of the Lucques Group

Dec 06, 2023

Welcome to the next edition of The Future of Hospitality, a six-part series sponsored by OpenTable that uncovers some of the best ideas, best applications, and best practices for building the F&B businesses of tomorrow.

I didn’t expect a conversation about restaurant growth to be so… emotional. But that’s how Los Angeles restaurateur Caroline Styne describes many of the decisions she’s made over more than two decades of running restaurants alongside her business partner, chef Suzanne Goin.

The duo opened their first restaurant, Lucques, in 1998. “When we opened, we never thought about if we’d have another place. It was just, ‘Let’s open Lucques because we’re excited about it,’” Styne told me recently. “It was everything in our lives. It was our child.”

Until it wasn’t. Four years later, Styne and Goin opened A.O.C. on the eastside of Los Angeles, a wine bar and small plates restaurant that won favorable reviews and awards well before wine bars serving small plates turned ubiquitous. After that, the pair considered an opening in nearby Orange County, but instead landed in Brentwood, west of the 405 freeway and far enough to appeal to an even broader audience. In late 2013 came Larder Baking Company, a wholesale bakery. In the summer of 2016, they took over food and beverage operations at the iconic Hollywood Bowl, home to the Los Angeles Philharmonic and an important stop for any important touring musician. And then, a deal to open and run three restaurants inside the downtown Los Angeles Proper Hotel.

Styne calls her company’s growth organic and emotional. It’s not linear or rigid and, she admits, not a strategy for everyone. But it’s indicative of the humanity and heart required to build a lasting, thriving, meaningful restaurant business and legacy — the sort of warm hospitality story that inspires, even in challenging times.

Our conversation has been edited for length and clarity.

Expedite: Your business is so broad, you have so much going on. In hindsight, it makes perfect sense. But how did this growth and change feel as you were going through it?

Caroline Styne: “Suzanne and I do things much differently from everybody else, and part of that is good, and part of that is bad. We never set out to open a set number of restaurants in a certain time frame. We’ve grown and opened things as things have felt right. On one hand it works for us. On the other, it may not be the best business philosophy and path to take.

“Restaurants reflect the economic factors around them. As we’ve seen since we opened our first place, and even before that when we were operating in places that weren’t ours, how dramatically things can change in a year, six months, two years. It’s hard to know exactly where you’re going to go, because so much is dependent on those outside factors.”

Like the recent writers’ and actors’ strikes in Los Angeles, right? I saw you offered discounts for striking workers.

“It did nothing for our bottom line, unfortunately. The strikes have been devastating. Our business was down 40 percent, and a lot of other restaurants were the same. This strike in Los Angeles did not just affect wealthy celebrities and producers, it affected working class people. Everyone was pessimistic about their ability to even go out and have a cocktail because of how long it was lasting.

“We had a great first quarter for the first time in a couple of years, and then May, and the strikes, hit. A lot of restaurants closed, a lot of restaurants are on the brink of closing. We’re all banking on this holiday season being the savior, and I hope it is. But I am excited for the moment in 2024 where we will no longer be dealing with these crippling strikes, where we will be far enough beyond Covid that we can start to get back to normalcy. I think that 95 percent of the restaurateurs in LA would say the same thing. It is tough for a restaurant to survive in this economic moment in California unless you have a concept with volume and very low prices, which is hard right now with the cost of operating.”

And those features don’t exactly inspire the most exciting of restaurant concepts.

“For Suzanne and I, it was never like, ‘Hey, let’s think of a quick service model.’ Our growth has always been this organic thing, and as opportunities have come to us, we have followed our instincts. One of our best moves ever was the Hollywood Bowl. We love it. We've had challenges, absolutely. But I think our love of the venue and the excitement of all of it — it’s seasonal, it only operates nine months out of the year — gives us energy for each year.

“Now, though, we’ve decided we’re only going to do restaurants where we're in a management deal, and we're not the employer, and we're not the lease holder. That's our path of growth.”

I think that’s a very reasonable path given your experience and also the challenges you’ve laid out. But you’re also operating highly successful restaurants that have been around for a while, which is its own growth story in a sense — keeping things fresh and exciting enough to stay open for decades.

“As long as you are continually providing amazing service and amazing food and value, then your guests will come back. A.O.C. is 20 right now, and for us, it’s about not taking our eyes off the ball and being as present as possible, keeping our standards up. Suzanne is always changing the menu — there are things that can never come off it, of course, but she finds pockets where she can keep things fresh, new, and interesting. All of our cocktails are seasonal, our wine list is changing constantly and we try to keep that innovative, too.”

Speaking of wine, I saw there’s a new A.O.C. wine club.

“Brand spanking new!”

Can you give me the rundown?

“We’ve always wanted to use our upstairs wine room not only for private events, but as an annex for wine tasting events and education. It’s been hard to do because the room is always booked, it was impossible to schedule wine classes there. But I’ve always wanted to create a further connection for guests with the restaurants through the wine program, so finally we ripped the band-aid off and did it. We’re starting off simple, it’s three bottles every month for $90, including a note from me about the wines. Anybody can pull descriptions and technical information off of Google, but getting that connection to why I chose to include a wine, or how it was brought to me, or more about the people behind it becomes personal”

From a business standpoint, is this a recurring revenue thing? A fun side project?

“It’s both; I’ve definitely wanted to do it for a long time. But it’s a way for us to create revenue that offsets our regular business.”

It’s almost necessary for restaurants to create extensions of their brands that live outside of their dining rooms.

“Yes, definitely. We’re also lucky because we’ve had our bakery, the Larder Baking Company, for a long time now, and it’s doing really well, separate from the restaurants.”

That’s an important point — you sell wholesale to other restaurants, right?

“Wholesalers, restaurants, hotels, movie studios, you name it. We have hundreds of clients, even outside of California. We ship to Hawaii, cross-country as well. We do frozen par-baked breads and buns and rolls, and everything from croissants, cookies, brownies to big loaves of bread and bagels.”

You closed your first restaurant, Lucques, right before the pandemic. What’s the decision process like to close something that you’ve had for so long?

“It was a really, really, really hard decision. The restaurant was 22 years old and we were at a moment where, as hard as we tried, and as much effort as we put into it, it was hard to fill seats during the week. We were really busy on weekends, but it wasn’t enough — we started to lose money.

“Our growth story is all very emotional. We’ve made so many emotional decisions — there were businesses that we probably shouldn’t have kept afloat as long as we did. A.O.C. in its first incarnation went through a really tough time, but we kept it afloat and figured it out. For Lucques, we felt like this was a moment to make a mature financial, rational decision versus an emotional one. We decided to close while it’s still going strong-ish and not dying on the vine. I miss that restaurant every day. I wish I still had it. But sometimes you have to let things go.

“We ended up closing our catering company, too. There was a moment when we said, ‘You know what? Less is more. Why don’t we focus on the things that we really love?’”

I love that. So what are you excited about for the future?

“As part, maybe, of the older guard of restaurants in LA, it’s great to see what newcomers are doing, how they’re innovating, and how they’re succeeding. You can open a big brasserie or a gigantic Italian restaurant — or you can do these small, really delicious, cool, meaningful things that have a connection to people’s histories. I think that’s the most exciting, and the most fun.”

Thanks to OpenTable for sponsoring this six-part series, which aims to highlight the trends, challenges and opportunities shaping the restaurant industry. Expedite is about embracing and inviting the next big thing and these interviewees have the answers.

Previous editions include: The future of hotel technology with Marriott VP of restaurants and bars, Joanne Liu; The future of restaurant work with High Street Hospitality founder and co-owner Ellen Yin, The future of attracting diners with Lettuce Entertain You CMO Jennifer Bell, and The future of sustainability, with Alpareno Group’s Mo Alkassar and chef Niven Patel