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Australia is the hardest place in the world to run a restaurant: Tom Pash, the American chief executive of Australia's newest dining group, calls it as he sees it. Pash has big plans, and doesn't shy from facing the facts about the country's business life with an amiable smile and blunt pragmatism.
Sitting next to him in the Rockpool Dining Group's Sydney headquarters in The Rocks, Neil Perry - arguably Australia's most celebrated culinary name - concurs. High costs including labour and rent, the fickle discretionary dollar and equally unpredictable local economic conditions: the rollcall of formidable trading circumstances is long, says Perry, and makes for slim profit margins in the fine-dining sector.
And any edge you may earn can disappear in a second. Perry snaps his fingers to underscore the point. He has just announced the closure of his fine-dining Sydney restaurant, Eleven Bridge, the last incarnation of what had been Rockpool. Opened in 1989, it was his flagship, and the restaurant that made his name.
Right now is a pivotal moment in the restaurant trade in Australia, and Perry and Pash are at the centre of the action. In November last year, Perry signed a deal described as one of the biggest in Australian hospitality, featuring the acquisition of his restaurant businesses by the Urban Purveyor Group, a restaurant conglomerate backed by Quadrant Private Equity, for a reported $65 million. (Eleven Bridge, Perry's work with Qantas, and his newer consultancy with David Jones were outside the deal.)
It saw the birth of Rockpool Dining Group: 15 brands, 50 venues, 3000 staff and $350 million in turnover uniting key names in Perry's portfolio - Rockpool Bar & Grill, Spice Temple, Rosetta and Burger Project - with Urban Purveyor Group's roster of brands, which includes Saké Restaurant & Bar, The Cut Bar & Grill, and The Bavarian, along with another more recent acquisition, Fratelli Fresh.
Rosetta, Melbourne. Photography: Julian Kingma
It was a deal touted as a game-changer for the trade, reflecting changes in the way we eat and live, and creating an ambitious new Australian food empire with plans for global expansion.
It also attracted its fair share of controversy. Perry himself acknowledges that it raised some eyebrows in the trade and the Australian media, and prompted discussion of whether he's selling out the venerable Rockpool brand and selling his soul to corporate masters.
"Tom is CEO of Rockpool Dining Group, and I'm head of brands and culinary," he says. "We're working on the business together. That's how it is and that's how people are going to see it. Nobody is going to believe the Rockpool Dining Group unless Neil Perry is at the centre of it."
He says he's been fielding queries from his own staff and customers about the sale. "Any kind of change freaks people out… Everybody asks questions and our staff recognise now that nothing has changed - we're going to be giving our best as we always have."
Pash's business strategy of speedy and large-scale expansion has also raised the spectre of the McDonaldisation of the Rockpool name, with restaurants on every street corner in every state. But Pash certainly shows no inclination for killing the golden goose. "We don't want to grow too fast, or we're compromising quality."
Perry stresses there will be limits on the number of new outposts of top-end brands like Bar & Grill and Saké, with a strict eye to quality control and individual excellence of each brand.
"I want everyone to judge us on our performance," he says. "If a night out at any one of the group's restaurants disappoints, you can kick us in the pants - we deserve it. But don't run with this line of, 'oh, private equity destroyed Neil Perry'."
Yes, he'll have to answer to shareholders, but, he argues, "you can be a large public company and still do the right thing and grow sustainably". While the deal with Urban Purveyor Group was an acquisition, Perry has equity in the new entity.
Rockpool Bar & Grill, Sydney.
As Perry and Pash sit together to talk through the minutiae of the deal, it's the chef doing most of the talking. Pash, a lean, ultra-fit, big-business import, is quieter and more careful with his words. On this occasion they present a seamless front that marries Pash's bullish business projections - a $1 billion IPO is a realistic goal within the next three years, he believes - with Perry's food-driven, people-focused, family man philosophy.
On paper the two men may seem mismatched, the passionate food guy and the corporate animal. Perry apprenticed as a hairdresser and waited tables before he found his calling as a chef, and was made a Member of the Order of Australia in 2013 "for significant service to the community as a benefactor of and fundraiser for charities and as a chef and restaurateur". Pash, on the other hand, is not a household name in Australia. Born in Ohio into a family of engineers, he would go on to run billion-dollar solar technology and semi-conductor companies. He describes his attention to detail as "maniacal".
Trading quips, though, they seem at ease together. They have more in common than it may appear. Perry is a businessman, just as comfortable filleting bottom lines and talking units and scalability for a Rockpool Bar & Grill versus a Saké Jr. Pash's first job, at 15, was in a Tex-Mex restaurant in Texas as "dishie, server and whatever else", and he remains passionate about hospitality. Among other things, Pash was president of hospitality operations for a global real-estate investment trust managing a $2 billion portfolio including 40 hotels and resorts and more than 70 restaurants. He's fond of talking about good food and service as the ultimate experiential asset. Paraphrasing Perry, Pash declares that dining is the new black for everyone from Instagramming millennials to golf-weary baby boomers.
And they certainly agree that Australian culinary trends are moving away from the white-tablecloth sector. The pizza and pasta space is thriving worldwide, while the booming premium-casual and fast-casual sector - an area Pash is evangelical about in terms of its commercial merits - shows no sign of flagging.
The Rockpool burger.
This, Pash says, is why he has faith in the largely untapped goldmine that is the Australian restaurant sector, steep fixed costs and all. He says he immediately saw the huge potential to create Australia's first big dining group - a multi-restaurant platform model thriving in the US and Europe - when he was brought in by Urban Purveyor Group founder John Szangolies at the end of 2014 to whip the group into shape in preparation for its sale. Quadrant Private Equity liked his vision and backed UPG. Szangolies left, and Pash became chief executive - almost to his surprise, as he tells it.
Fine dining may be tricky but Australia is on the cusp of another food revolution, he says. Changing demographics and urbanisation mean that Australia is following trends in the US where more relaxed dining spaces with an emphasis on good, fresh food are booming.
"In Australia, I think per capita dining will pass grocery spend in the next couple of years," says Pash. "There's definitely a dining revolution going on. In New South Wales, probably 10,000 new seats have come online." The delivery sector is also booming here as it is in the US.
It's the reason, he says, that big business is increasingly investing in the sector - witness Singapore-based company Golden Development Private Limited buying 65 per cent of Melbourne chef Shannon Bennett's Vue Group in November 2016 for a reported $22.5 million.
The trends in the market are bullish, says Pash, and his company has the kind of strong brands best placed to make the most of it.
Perry has been keen to plant the flag overseas for some years now, and global expansion was a key incentive for him in the deal. Pash says the group is already fielding leasing offers for a Rockpool Bar & Grill and Saké in Los Angeles. If LA works out, the next stage will include another Bar & Grill and Sake in London along with a Spice Temple in New York.
Spice Temple, Melbourne.
The Big Apple is an untapped market for great Asian food, Perry reckons. "They've got Spice Market, Buddakan - those sorts of places are doing $20 million a year and to be quite frank, they're pretty ordinary."
Perry says his value to the brand, beyond his experience and reputation, is in his ability to drive quality and innovation and manage costs both in food and staffing. "That's going to manifest itself in the restaurants being busy and sustainable and having a long life." And making them profitable, of course. "If we aren't making money, we can't invest in the other things - we can't talk about sustainability or great quality unless we can afford to invest in them."
He has already created new menus - "about 14 new dishes at Saké already and more coming... what we've tried to do is take out the kind of Nobu-esque dishes" - with a roster of new plates based on "really beautiful ingredients". Eleven Bridge will reopen as part of the group in June as Jade Temple, an upmarket Cantonese sister restaurant to Spice Temple.
Perry says he remains committed to "staying on and growing the business and taking it to a public company", while Pash is applying for his permanent residency and aims to make Australia home for the next five to 10 years. As Perry tells it, Quadrant's English head, Chris Hadley, is also committed for the long term. "He said, 'if I'm famous for being the guy who killed Rockpool, I'm going to have to move out of Sydney'." Perry has his eye firmly fixed on legacies.
Perry has his eye firmly fixed on legacies."When this company becomes public, we're interested in finding the next Tom Pash and Neil Perry." In 10 years' time, he says, he wants to have created a sustainable, solid company with management and staff all working towards the same quality-driven goals. "I don't see why one day we won't be celebrating Rockpool Dining Group's 100th birthday."
Projects in the pipeline for Rockpool Dining Group
Burger Project, Broadway, Sydney
Jade Temple, Sydney
The Bavarian, Chermside, Brisbane
The Bavarian, Knox, Melbourne
Munich Brauhaus, South Bank, Brisbane
Two restaurants at Darling Harbour
Rockpool bar & Grill, Brisbane
Spice Temple, Brisbane
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