Transcript 181: How Restaurants are Adapting to the Global Pandemic, with Neal Sherman
Nicole Mahoney: 00:23 Hello listeners, this is Nicole Mahoney, host of destination on the left and welcome to this week’s episode sewed with another interesting guest, Neil Sherman. Neil is the founder and president of tag X brands, a global firm, the handles all aspects of facility closures and equipment liquidation in the food industry. Jagex brands connects buyers and sellers of restaurant equipment and the common marketplace for them, betterment of the industries that they serve, including retailers, restaurants, grocery chains, manufacturers, distributors and convenience stores. I invited Neil to join me to share his perspective on the hospitality industry and more specifically what he is seeing with restaurants across the U S with his unique position on the facility and operation side of the restaurant business. Neil brings a unique viewpoint and what the current pandemic has done to the industry and what he thinks the industry may look like on the other side of the current crisis. We also dive into some strategies that restaurant operators can take to help them survive and thrive when we come out of the current downturn.
Nicole Mahoney: 01:30 A little more about Neil. Prior to launching tag X brands, he started his career in marketing and brand management and the Maxwell house division Kraft general foods. He also worked at the white house and for a Congressman on Capitol Hill in 2017, Neil was included and inducted. And so the fellows program at the culinary Institute of America, which is widely recognized as the world’s premier culinary college with an industry wide reputation for excellence, Neil was chosen for the fellows program because of his reputation for providing outstanding service that is core and relevant to all businesses in the restaurant industry. Now let’s get into the interview. So Neil, uh, so, uh, so excited to talk to you. Thank you so much for joining us today. And I know our listeners are gonna learn so much from you, but before we dive into some questions that we had, can you share your story with our listeners in your own words? I find it adds so much more context to the company. [inaudible]
Neal Sherman: 02:32 sure. I appreciate it. Thanks Nicole. I, I’m honored and humble that you asked me to, you know, be part of your podcast. That’s amazing. I took a look at the sheer volume of information and kind of insights you provided in the industry over years, now dozens and dozens of podcasts. And it’s a, it’s an amazing service you provide to the industry and, um, regardless what its original intent was, I think it’s a lot of information for people and I think you’re even, you know, even in this time of need and, uh, collaboration that you of your own word cope cool.
Neal Sherman: 03:16 Um, uh, you trademark that word. It’s, uh, it’s pretty amazing. So I appreciate it and I’m honored to be part of it. So I, uh, I like you was raised in upstate New York and Geneva, New York. Um, when my wife met me going to school abroad, she was disappointed. It wasn’t Geneva, Switzerland. Um, but it was Geneva, New York. Uh, I grew up in a family business. My father had a group of Napa auto parts stores. So that was my, uh, childhood working in the auto parts store. And, uh, all I wanted to do, my whole childhood was to get out of upstate New York, you know, and uh, see the world. So I went to school in DC, London and New York and was interested in the political world and thanks goodness. Got that out of my, and a system at a young college age. I went to business school, got into marketing and brand management, which I loved, wasn’t meant for the big corporation, wasn’t meant two live in the New York metropolitan area.
Neal Sherman: 04:15 And uh, as soon as my wife graduated law school, she says we had the, then I had the car running on the day of her graduation to leave. You are. And uh, we moved to DC and DC is not the epicenter of consumer products marketing, right? It’s the epicenter of vapor marketing or whatever you want to call political consulting. And so I knew food cause I’d worked at general foods now craft and brand management. And, um, was that the time that a lot of supermarkets were getting into prepared foods? Um, and you know, we’re fortunate to have Wegmans. There’s great supermarkets around the country and around the world now that offer it. But in the late eighties, early nineties, not a lot did. And our niche was kiosks. We created and built these kiosks and put them in supermarkets self-serve, mostly prepared foods. So they were mostly for large brands, soup bars for Campbell soup and salad bars for craft and frozen yogurt kiosk for Colombo and coffee casts for Maxwell house.
Neal Sherman: 05:15 We made it to about 2000 supermarkets, but every time we’d show up, uh, Nicole, every time we show up, there was some piece of equipment being displaced and it was that pain, uh, that yeah, customer needed us to get rid of. And we’re also wouldn’t let us bring our kiosk into the supermarket, which was how we were paid. So we had a vested interest in getting rid of the papaya juicing machine that wasn’t, you know, producing the kind of results they wanted. And so we brought it back to our shop, cleaned it up, sold it, brought proceeds to the supermarket and said, you know, no one’s ever brought us proceeds for the crap they take out of here. Um, I’ve got a warehouse down the road. Can you help us with that? And, um, after about three or four years of feeling indignant to being their mop up people, it became clear that that was the business, that, that there was this headache that’s supermarkets and convenience stores and restaurants had with the movement of their physical assets, equipment, furniture, fixtures, uh, whatever might be the case.
Neal Sherman: 06:20 Uh, and knowing that food, regardless of its channel, whether it’s in the hospitality and travel industry or whether it’s in supermarkets or restaurants, uh, his go is a constant change, right? There’s, there’s constantly things changing and there’s a displacement of, of equipment. And so we became niche players in, uh, helping to close and remodel locations, moving of assets to other locations and selling them in the aftermarket. And that sale in the aftermarket created, which was, uh, probably in the mid nineties, a very dynamic marketplace for surplus equipment. And so we started getting calls requesting, do you have a mixer? Do you have a frozen yogurt machine? Do you have an oven? And we realized that a, a unintended consequence in the best possible way was this marketplace that we built over the years. And the used equipment industry is usually very localized, very ladened with, uh, sketchy characters.
Neal Sherman: 07:22 And, um, you know, we built a reputation on transparency. So over the years we’ve, we built it to about 35 warehouses around the country, mostly in cities, mostly expensive. And we knew we needed a place. And at the time, if you may recall, I think you’d do that, the, uh, early nineties, late nineties, they had all these military bases that were closed, including the Seneca army Depot and Romulus New York, 15 minutes from the place. I said I’d never moved back to, and uh, one of its missions was a distribution center for equipment and they would refurbish equipment and ship it out. Long story short, in 2000, we leased with a path to title by the army base. And so we’re the proud owners with our, or a real estate partner, which has been an amazing partnership, flood management, uh, on redeveloping this whole army base. And so that’s where we operate out of. So we have eight sales channels. We serve as companies nationally. We have another facility in Texas. And, um, you know, it’s a, it’s still helping people deal with facility and equipment headaches and then creating this dynamic marketplace. So that’s our, that’s our story. I’m a proud, especially in this time, proud upstate new Yorker now
Neal Sherman: 08:39 versus living in cities.
Nicole Mahoney: 08:43 That’s right. It’s all about perspective. Um, but, uh, but what I would, I I really love about your story, Neil, and you and I have talked several times. Mmm. Uh, I, I’m always amazed by the people that I meet and kind of those, uh, wandering paths we take too, you know, find our destiny, if you will, or to find, you know, to find ourselves where we are and, um, just how it all kind of builds on one another. Starting with your marketing background and working in food and, uh, getting into the supermarket kiosks so early. And, um, my listeners are soon going to find out why I’m excited to have you on today because I know you have a different lens into a part of our industry, uh, than most because of your experience. Um, you know, in helping people with these headaches, specifically restaurants and hospitality, uh, organizations.
Nicole Mahoney: 09:39 And I know you also work a little bit with wineries and, and food producers, so, Mmm. Really excited to get some expertise. And I know it’s a topic that’s on everyone’s mind. Why? Because we all just want to go out to dinner right now and we can’t. So I’m, I’m a, I would love to hear from your perspective, you know, we’ve seen a lot of us have seen the numbers and maybe if you want to share some of the numbers, but in terms of the, the impact that Cobra 19 has had on the restaurant and hospitality industry, um, but I’m just wondering from your lens, what is the impact and what have you seen, uh, you know, during this pandemic?
Neal Sherman: 10:20 Sure. So, Mmm, the numbers are staggering. I’ll, I’ll mention them, but the, you know, I’ve lived through as have you nine 11 challenging economic environment of the 2008 Mmm. You know, financial collapse of certain sectors. Mmm. This is different. It’s kind of a silent enemy that Mmm. No one really understands. And I don’t even think anybody understands where the crystal ball, where it’s going. I can tell you that at least in the restaurant space, and these numbers are validated by the national restaurant association, does it include other types of retail, which is even more devastated by this situation. And I know some of your listeners are involved in not only hospitality, tourism, retail, they touch all these aspects. They’re not just specialists. So as of last week, something akin to 130,000 restaurants were closed in America. Mmm. 8 million people were displaced in their jobs. 8 million people in the industry will lose about $225 billion.
Neal Sherman: 11:32 And is if that is not enough, the impact to every other ancillary industry that’s linked to it, right. Whether it be suppliers or manufacturers or distributors of food and components, even amplify that number, that number is only the operators. And so I have a, a view that changes inevitable, right? There’s thousands of quotes, very quotable things, Mmm. That are out there about change creates opportunity. Every door that closes a window opens. I mean, there’s a, you could, you could go down that path multiple times, but change, especially when it’s one’s livelihood or one’s passion for one’s business of this extreme, it’s painful. It’s painful to experience, but it’s also painful to watch, even if you have nothing to do with it. Anybody who has a heart [inaudible] know, I am a, I take the national news and the online news with a grain of salt because if you only watched it and only listened to it, you would never leave your house.
Neal Sherman: 12:47 We’d all be sadly agoraphobic and, and we basically have to figure it out ourselves. So I can tell you from my perspective, I think we’re still in this. Um, it’s like the stages of death, right? You know, the, the stage, there’s denial and there’s anger and there’s, you know, acceptance and all those other things. And I happen to believe having lost loved ones at a young age, that you have them all, all the time anyways and it never goes away. So the people that went into business that put their life and their passion into there, BNB or their winery or their restaurant or their retail store, Mmm. It’s painful. And um, there’s, there’s a lot of change that can occur. Not in the restaurant business. I gave a presentation two years ago too, how morning company to the wall street analysts and they basically asked me what I, I believed about the oversupply of restaurant options and it wasn’t my analytics.
Neal Sherman: 13:50 It was other wall street analysts who basically said, uh, there’s 30% more space and places to eat. Then there are mouths to feed during that time. Yet at the same time, to your point, we humans are social creatures, right? You’re very outgoing and personable. You yet at the same time, you don’t want to cook. You know, you run a business, you have kids, you don’t want to cook every night. You want to go out and experience, you know, electric hair down, and that the option’s not there right now. And so I think this, this is the period and you also have to decide, how am I going to deal with this? Am I going to deal with this? That was me, my business just took it on the chin and you know, I’m just going to sit back in the corner and cower, or am I going to get back in the ring and fight?
Neal Sherman: 14:42 And so that’s a decision your listeners have to make regardless of whether they own or run or work in the environment. Know the society will get through this. I have some strong opinions based on people’s input as to what, what can, what can happen here. But, um, you know, that’s just kind of my observation of what’s going on. It’s, it’s pretty devastating. And the personal side is very challenging. Yeah, absolutely. I mean, you can’t really talk about what’s going on without talking about that. Uh, the pain and the personal side, it’s, uh, it’s definitely really, really hard. Um, but I do appreciate you bringing up the idea of, you know, the choice of how we respond because that’s, you know, as a business owner myself early on that was something I had to decide how am I going to respond, why do I want to do and am I, uh, like you said, get up and fight, get in the ring and I try to keep my business alive or am I going to okay, not participate, do something else.
Neal Sherman: 15:45 Um, I th I think that’s a really great point. Um, I’ve had to back up though, cause you mentioned a little bit about this over supply of places to eat a restaurant options. Um, and so I’m curious then. Mmm. Do you, do you think that through, uh, that’s very painful time when they come out on the other side, there might be some sort of a right sizing and that plays out. What do you, what are you seeing in terms of our thinking? Obviously nobody has a crystal ball, but how this might change things. So, um, I think it’s happening. No one thought. I mean, obviously if you believe in the free market and you believe in supply and demand meeting somewhere, then at some point if there’s too much supply, those concepts or outlets will be weaned. And the, you know, the demand, we’ll use whatever the supply it happens to be.
Neal Sherman: 16:43 And vice versa. I think that what’s happening now is, because we’ve talked about this before, the thin margins affiliated with restaurant food service, Mmm. Spirits, you know, hotels, et cetera. The tight rope we walk in any business, especially those we’re not made to sustain protracted periods of time, have no business. And furthermore, I mean, there’s no big cushion there. I mean, if you, if you, you know, think about it, how many people have six months worth of cash reserves? I never have. I’ve been in business 33 years. I’ve never had six months worth of cash reserves. I’ve never been that fortunate. Right? So, um, so it’s kept me hungry and light on my feet to be able to do that. And I think there are a lot of people that will not come out of this regardless to restaurant, hotel, retail, you know, my heart goes out.
Neal Sherman: 17:40 You, you hear these, uh, there was a, the husband and wife that ran a beauty salon in Georgia. They were being interviewed and just my heart went out to them that they couldn’t, you know, they’re hard working seven days, you know, and couldn’t make things happen. I think what, what will happen is that the over supply was based on the creativity of others based on the blurring of food. If you recall, when we were younger, I’m a bit older than you. Mmm. You know, the supermarket was where he got packaged goods for your mother to make dinner. And you know, at home in a restaurant was where you went out as a family and a gas station was where you pump gas or somebody pumped it for you and clean your windows. And now convenience stores, I have an array of prepared food that superior to many restaurants or supermarkets and depending on what part of the country that you’re in. And so that becomes a big factor of what truly accelerated the number of outlets to eat at. The other thing was very liberal lending, Mmm. By banks and other institutions to encourage people to, you know, in much the same way the mortgage challenge of whatever 12 years ago dealt with Mmm. To open who, who really weren’t skilled enough to operate a restaurant. I mean, it, it takes a lot of skill to operate a restaurant and it takes a lot of skill to run anything or do anything, but a restaurant is particularly challenged.
Nicole Mahoney: 19:09 [inaudible]
Neal Sherman: 19:09 so I think that that oversupply, it was destined for a contraction, but not of this degree. No. No one knows how, what, what the magnitude is.
Nicole Mahoney: 19:21 Right, right. Yeah. Of course. What are you seeing or hearing, um, from people that you’re working with about the change in the ways restaurants are making offers? You know, the whole take out to go, um, delivery restaurants that might not have had that in the past. Uh, you know, it was interesting. I was talking to a friend and we were talking about food that we had gotten from a local restaurant. And I said, yeah, it was okay. It wasn’t great. She goes, Oh, but they changed their packaging and now when you go, it’s great. The packaging made all the difference. It was like they were on a learning curve to figure out what to go to. Containers would okay serve their food properly. Mmm. So I’m just curious, uh, what, what you’re hearing or seeing in terms of restaurants being able to adapt?
Neal Sherman: 20:11 Sure. So, and I’ve seen some of the great, you know, wineries in the finger lakes be creative of pickup and delivery and shipment and everything else. I think, um, delivery has always been a, uh, especially in the last couple of years with all these national delivery services that have come online that you, you know, go online or they have an app and you can order from a bunch of different places. And those were very controversial leading up to this because there was a 30% premium charged if you wanted it delivered. The consumer willing to pay the 30%. So they tried to stick it to the owner of the restaurant to pay the 30% well, we all know that restaurants don’t make huge margins, so they would eat it, eat away at the margin. So that was kind of like contradiction in a way to operate.
Neal Sherman: 21:03 So I think some restaurant tours have done a good job of delivery and take out. I just think some restaurants are not made for it. I think they’re trying to well operate in that environment and they’re not made for it. The quick service categories have done very well. The, the fast food, you know, burger chains, what have you. I think, um, the supermarkets have done absurdly well. You know, some supermarkets in some regions of the country have doubled their business versus year ago, some as high as 30 or 40%. Now you’re talking about the creativity of entrepreneurs, the supply chain, the distributors of food service items that pivoted, so to speak, to, uh, be the supplemental distributors of those supermarkets. So they’ve survived, but it’s rendered the operator very challenged. I think that Mmm, as far as I can tell, 10 or 20% of historical revenue is now made up of this delivery and take out option, you know, but so it doesn’t come close to cover anything that it was and they’d just, you know, a lot of these people are doing and especially the small entrepreneurial restaurants, uh, because they want to keep employees.
Neal Sherman: 22:19 Now some, some of these chains, the real challenge is how do you deal with the fact, I mean there were big national chains that we’re not working with now, so I can comment on. So like cheesecake factory or Logan’s Roadhouse who completely shut down and when they shut down, they furlough their people and we know what a hassle it’s been. Again, unemployment, well those people need to get jobs and so when they get jobs, when those people open up again, it’s not going to be like they turn the lights on and everybody shows up and there’s a line at the restaurant that always had a line. There’s going to be a period of time where that’s going to transition. I talking to the CFO of a chain in Texas the other day, the rules in Texas are 25% of the tables can be occupied, which is kind of a parallel for stage of restaurants and other States.
Neal Sherman: 23:07 So think about that. You’re limiting the capacity to 25% out of the gate. And if it’s a place that is, that serves beer, wine, spirits, they’re limiting the seating at the bar from every seat to every second or third seat. So if you and I and our spouses want to go and grab a drink, whether we drink alcohol or anything else at a bar and then grab dinner, that means that by law we can’t sit next to each other. That’s like an absurd concept. It’s counter, it’s not even counterintuitive. It’s counter logical. And so what’ll happen is these restaurants have get very aggressive. I think that obviously I’m biased that they have to operate more, you know, leanly and make decisions that they normally wouldn’t make before. I think the investment in a menu or an offering if they’re a hotel or a tourism experience, acknowledges that this event in our life is changing our behavior in ways we don’t even think about it.
Neal Sherman: 24:09 I mean, my, you know, we talked about this before. My wife is a very outgoing person when she goes to a restaurant, she hugs the wait or she hugs the host, she hugs the owner of the chef. And, uh, I said to her, are you going to think before you do that again? And she said, yeah, of course. And if, if she, and I’ve known her for almost 40 years, does that than the average person who’s more nervous about that. That’s like it. So, so I think the world is changing and the operators have to adjust to that.
Nicole Mahoney: 24:39 Absolutely. Um, I, I’m interested to know a little bit more about this. Uh, the way Texas is reopening, because I know this is a question, especially the folks that I talk about or talk to around here and upstate New York. Um, you know, how are restaurants going to do these States? The openings, is it even financially viable for them to reopening if they can only see 25%, um, you know, of their business. And I’m curious if in the conversation, um, you know, with that person in Texas or, or other conversations you’ve had, if there’s been any discussion about that, how do you balance the reopening with obviously the viability?
Neal Sherman: 25:20 They, they’re counter, you’re absolutely, you hit it right on the head. They don’t connect. If you, you’re basically forcing the operator to say, if you’re fully seated, you’ll only have 25% of the seating capacity, what the restaurant was before. That’s a recipe for disaster. Now some of them are saying, I’m not going to play until it’s more, I’m not going to get in business until it’s more others are saying I got to get back into business somehow. Um, so I’m going to do that and I think that, Mmm. Some of the operators, I think a lot of things have changed. So people ask me, well, what can I do? What can I do to survive in the restaurant or hospitality space? Obviously our focus is on facilities and equipment. But there are other things people have done. One is they’ve, you know, gone to their landlords and said, look, I want to be here longterm. You know, they don’t ha the most important thing is to communicate
Nicole Mahoney: 26:17 [inaudible],
Neal Sherman: 26:17 communicate to your landlords, your banker, your employees, your customers, your vendors, everybody. Um, what you’re doing. Because those people I’ve found historically that don’t communicate are the ones that have the biggest challenges going forward. The second thing is that people have proactively reached out to those things that were sacred, never to be negotiated topics and negotiated, whether it be a bank loan or a landlord, rent or vendor terms or what have you. Got to remember, everybody’s facing the same thing. Never before have the real estate, uh, folders and the bankers faced this extreme situation. And I think this is the calm before the storm. I think there’s hope. There’s still hope that will come out of this and the operators will be back in business. We haven’t seen huge numbers of closures. We sync closures and people plotting closures of locations, especially in multiunit operators are seeing this as a window to close. Nicole what they were going to close anyways. But this gives them a reason to close it. If it’s a multiunit operator, if it’s a single location operator or a destination, we’re a tourist place. That experiential thing has to change. They have to change their offering to reflect what’s going on in the world. We can’t just say, uh, our behaviors, nah, not going to change because of this global, you know, pandemic and it’s going to, so our perspective is the most important thing for an operator’s cash, right? We all know that
Nicole Mahoney: 27:58 any business, any business owner, the most important thing is cash.
Neal Sherman: 28:02 I mean, it’s yes, people and customers. Without that you won’t have any camps. But once you get over this people in customer thing, then you got to have cash. And so I’m a big preservation of cash guy and I’m a big monetize what you ain’t using guy. So that’s where we have historically come in and we’re working at right now is to take every physical asset that you’re not using, furniture, fixtures, equipment, smallware supplies. It doesn’t matter what it is and monetize it, right? Because if you’ve not used that refrigerator in the back of your restaurant for five years, you ain’t gonna use it next month. And so if it’s going to generate a hundred or a thousand dollars, it’s better cash. Yes, yes, fuel for your operation than it is sitting there as a dormant asset. And so we’re huge advocates of that and that’s why our marketplaces are made to help people monetize those assets.
Neal Sherman: 28:57 And because a long time ago we learned that we weren’t really good at being fee-based. We became performance-based. So the more we get for somebody, the more we make as commission and we’re performance-based. Alternatively, the person buying that item who needs something and anybody who needs something to operate, they should buy that in the aftermarket. And I don’t just mean the used market, it could be new surplus, which is more than half of what we sell. Or it could be used equipment or supplies because you need those things, but you have to think out of the box. So generating dollars on things that are, or torment is a good thing, and sourcing things in the, in the marketplace more efficiently as a Miller. And those are, those are thinking about it. If an oven goes down in a restaurant and it’s a $10,000 oven, you gotta sell a lot of burgers or a lot of no pasta to make up that 10,000 bucks. But if you can buy one in the aftermarket for two grants, you know, and still continue to operate, that’s up. That’s a positive, you know, positive thing. And I think that all these sacred, you know, there’s an old saying that sacred cows make the best hamburger. I don’t know if you’ve ever heard that.
Nicole Mahoney: 30:03 Yeah. But I like know what, I like it.
Neal Sherman: 30:06 And about a year ago I became a vegan. So it’s ironic that I quote that gave me, and uh, she was, uh, you know, a road less traveled person. And I think the creativity that that is possessed in, in the space, you’re more focused in the tourism area than I am. The creativity of tourism in general and experiential things. Mmm. Is the perfect foundation for what is next. When you think about it, after nine 11, there were a lot of people that didn’t want to fly. They didn’t want to travel outside the country. And a lot of the domestic destinations became more attractive with this. They have to change their infrastructure. We’re talking before about an event, you know, people in the events space. What do they do? I mean, some of the iconic events in the world, who would have ever thought that the in sports, the masters in music, the new Orleans jazz festival, the Rochester jazz festival, which is brilliant, Lee created and is world renowned now, you know, being put off. I mean, who would have fought that? So you have to rethink it, right? So rethink the experience. So,
Nicole Mahoney: 31:16 right, absolutely. And it is all about the experience and you’ve given us a lot of really great things to think about. And uh, before we wrap up, uh, Neil, I just wanted to kind of circle back because I think you hit on something that’s important for our listeners to understand. Um, it’s something I learned actually, uh, also being raised by a father in a automotive business similar to you. Yeah. Um, you know, where one of my early jobs when I was younger was he would have me pick up the washers. So, you know, the go on the screw, awesome. The floor of a shop and I, I’d say really like I have to get down here and pick these up. Are you kidding me? He says like, that’s worth, you know, I don’t know half of a penny or something and it all adds up. It makes such a difference. So, Mmm. I’m curious about your business because you really do help people, uh, monetize what they aren’t using. And I’m imagining that you must be kind of busy right now, folks that are, you know, that are looking to aim, monetize or you know, that oven broken, they need, they need to replace it, but they need to be smarter about how this,
Neal Sherman: 32:28 yeah, I would say that. Mmm. People say to me, you’re going to be the busiest I’ve ever been in this chaos and my responses, our whole business is based on helping people deal with chaos to deal with headache relief. We focus on facilities and equipment, but we’ll talk to people about anything and built over 30 some years. You know, we get a million plus views a month on our sites and people looking for equipment. They get frustrated when we don’t have a hundred percent of what they want. But that’s the nature of a dynamic marketplace, right? We have whatever we have and they can seize it. Okay. Yes, we’re very busy. Mmm. We are closing locations in different parts of America now that that likely we’re going to close anyways, that the operators are saying this is the cover that I need to close and just move on because no one’s going to judge if I close now because of what’s going on.
Neal Sherman: 33:24 A lot of people that had growth plans have, have basically stopped those growth plans, but all the equipment and everything else that’s available is, is available to people to take advantage of. So, yes, we are very busy. Mmm. We’ve had more activity. Uh, the interesting people say I get, you’re going to get a lot of supply because people are going to close and people aren’t going to expand and distributors will be sitting on inventory. But where’s the demand? Well, we held our breath. We had three auctions in three different markets of the country, Dallas, Indianapolis, and DC that were live when the, you know what hit the fan two months ago, right when everything got shut down and we held our breath. And what happened was the sheer [inaudible] of people engaged on our marketplaces went up four fold and it went up four fold because the entrepreneur said, look, I can’t buy a new oven for 10,000 bucks.
Neal Sherman: 34:22 I got to go find a know one in the aftermarket or a new surplus one. And because we’ve been around a long time, we have credibility in that marketplace and that those are the people that are participating. And I think we’ve had, um, I don’t know, 1213 auctions. We resurrect. We kind of re launched our online storefront. We used to be able to turn inventory so quick. We didn’t have storefront. Now we have so many people will interested that we have to offered ongoing cold restaurant equipment.shop. And the one, the auction platform is restaurant equipment’s outfit. But yes, we’re very busy and I view it our work to make the aftermarket more efficient because I like you had a father who made me do things in the auto parts store. He would take the, he had these invoices that were in triplicate and if it was a cash sale, he only needed two parts to it.
Neal Sherman: 35:17 So I would take the third part, I’d have to count 10 of them, staple them together. And those were the scratch pads. And then he was a depression era guy. He would audit me and if I had like eight feet, not 10 or 12 not 10 eat, make me redo them all. Yeah, it was maybe that says something about that, that kind of influence that had I, you know, our fathers had on us for that. Okay. Yeah. Frugal, you know, entrepreneurial, you know, Sumner Redstone, who built a huge empire and CBS and everything else had a quote that says, you gotta watch the pennies because, uh, the pennies and dimes, because when it’s millions and billions, it really means something. And so, you know, I’m not at that point, but I, but I’m, I’m the same way, you know, and you have to be, and now the people that you and I serve that we care so much about, it’s not just the business.
Neal Sherman: 36:07 These are relationships that we’ve had for our careers, right? We want to see them succeed. We don’t want to see anybody not succeed. Even if we don’t like them. We want to see them succeed because it’s to the industry. So we, your concept of, um, competitors collaborating is key. I also think that creativity finds a way through this thing. People say to me, what is the future look like? So if 25% of the people can sit down, uh, one survey by a, uh, a large television group said that in the first 30 days that restaurants are open, only 40% of the population feels comfortable calling. So that means that only 40%, okay. People that would go normally are comfortable and then it gets higher as it’s each 30 day, the period goes on, but it never reaches a hundred percent according to this survey that was pretty reliable, pretty large, uh, not reliable.
Neal Sherman: 37:03 And it reaches like 75%. So that means 25% right now of people that normally frequented restaurants, whether it be date night or with family or friends or whatever, don’t see themselves coming to a restaurant now. Now they’ll get over it. People will come back, Oh, a guy who runs up, very large restaurant fund in New York. I said, well, what’s the solution? And he was very candid. They say, I don’t know, you know, these are, these are the operators like you and I only, they operate multibillion dollar funds. And he said, the only solution is when there’s a, you know, kind of a Bulletproof vaccine. So this thing and people feel comfortable living life again. I think they will. But I mean you’re, you’re seeing right now colleges rethink their offering being sued for having online curriculum versus lot so chaotic time. But those who are resourceful, who work hard, who are creative, who pick up the washers on the ground, those are the ones that will survive and thrive. So.
Nicole Mahoney: 38:04 Absolutely. Absolutely. Um, well Neil, thank you so much. You’re so full of just so much information. I really appreciate it. And I know our listeners got a lot out of this conversation. That’d be a favorite episode even though the topic we’re talking about isn’t a, you know, it was chaos and crisis and pain. Um, but people are really wanting to understand a little bit about what the interim might look like. I guess let’s think about it as the interim, right? Because you’re right, we will
Neal Sherman: 38:31 transition.
Nicole Mahoney: 38:32 Transition. That’s right. Transition. I love it. Well thank you so much and we’ll look forward to catching up with you again.
Neal Sherman: 38:39 Thank you. Thank you so much, Nicole. Appreciate it.
Nicole Mahoney: 38:41 Thank you for listening all the way to the end of this week’s episode. This gives me a chance to ask you for a favor. We have a goal to reach 100 ratings and reviews on our podcast by the end of 2020 we are already well on our way to meeting this goal, but need your help. I love sharing my interviews with you and if you enjoy them too, I would a greatly appreciate you giving us a rating and review. Click the iTunes or Stitcher link on destination on the left.com or leave one right in your favorite app where you listen most often. It only takes a minute and your support,
Nicole Mahoney: 39:15 it means a lot. It’s time to hit the road again. Visit destination on the left.com during your travels for more podcasts, show notes and fresh ideas.