An Alternative Model for the Restaurant Industry Blooms with the Help of Philanthropy
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The Understory. Photo by Papa Ricosuave. from left to right: Seanathan Chow, Lily Fahsi-Haskell, Niño Serrano, Florencio Esquivel, Jenabi Pareja, Diana Wu
The restaurant industry is notorious for exploiting its workers — mostly immigrants and people of color — who put in exhausting, unpredictable hours for paltry pay and few benefits. Even prior to the pandemic, the industry was under scrutiny for its toxic workplace culture. Then COVID-19 took a devastating toll on the sector — many restaurants shuttered, and food service workers ranked at the top of job loss lists.
But with a cataclysmic shift comes opportunity for change. Could there be an alternative, equitable economic model to the conventional restaurant business? One that provides customers delicious meals, celebrates culture, uplifts worker-owners from historically marginalized communities, pays a living wage, and makes money?
The nonprofit collective Oakland Bloom thinks so — and philanthropy is well-placed to help make such a transformation a reality.
The organization supports low-income immigrant, refugee and BIPOC chefs who want to start their own food businesses through its incubator training program Open Test Kitchen, which schools budding entrepreneurs in every aspect of starting a food operation. In the fall of 2020, Oakland Bloom also launched a for-profit project, the brick-and-mortar business Understory, a cooperative Oakland, California, restaurant that prioritizes workers’ rights and pathways to ownership.
Oakland Bloom is one of eight projects across the country that have received a combined $2 million since 2020 through a partnership between the Kresge Foundation and the collaborative Equitable Food Oriented Development (EFOD), which designed and led the funding process. Kresge provided financial support as part of its larger commitment to supporting food-based enterprises in underserved communities of color (see our story here).
“Oakland Bloom is committed to supporting community and wealth-building for poor and working-class immigrants and refugees of color. This is different from most programs supporting immigrants, which tend to focus on employment as their end goal, or work with more privileged classes of immigrants on their journeys to ownership,” says Stacey Barbas, senior program officer for health at Kresge, which granted $100,000 over two years to Oakland Bloom, in addition to providing technical assistance and other support.
“By focusing its model on the common barriers to business ownership for this particular group of chefs, Oakland Bloom has developed innovative programs and support systems that meet chefs where they are both economically and socially,” she adds.
It’s also an example of innovative efforts underway across the country to reimagine how local food business works, often weaving together different streams of finance, revenue and philanthropy to create a more just form of enterprise — and better serve the community.
Reimagining restaurants for community good
The Kresge-backed EFOD Fund is an alternative finance model for community-led, justice-first, food-based economic development and prioritizes the expertise of people of color as designers and decision-makers.
“While grounded in their communities, each of these projects contributes to the amplification and expansion of the EFOD vision,” said EFOD Collaborative executive committee member Mariela Cedeño of Manzanita Capital Collective, announcing the first round of funding in 2021. A second followed in March this year. “These grants reinforce our goal to uplift a development narrative that uses the food system and prioritizes community ownership and asset-building for long-term generational wealth.”
The Kresge grants are designed to make a difference for chronically underfunded, BIPOC-driven projects that lack access to capital or equity, says Barbas. Kresge sees the investment as “moving from a charity model of food assistance to one that helps build wealth and community economic development in primarily communities of color.”
In the past year, Oakland Bloom’s cooperative projects cooked 6,500 meals for unhoused people in Oakland and Berkeley, supported more than 50 food entrepreneurs, and provided emerging chefs with much-needed income during the pandemic.
“The Kresge funding came at a crucial time — when our community restaurant project and incubator kitchen were forming,” says Seanathan Chow, Oakland Bloom founder and director of strategy, who describes the effort as a boot-strappy enterprise. He adds: “It’s been a learning experience, but we’ve been able to accomplish a lot with very little.”
In 2021, the combined budget for Oakland Bloom and Understory was $440,000, including donations from Kresge/EFOD, WES Mariam Assefa Fund ($100,000 over two years), and one-time grants for cooperative development work from Rippleworks, Y&H Soda Foundation, Restaurant Workers’ Community Foundation and East Bay Community Foundation’s Women’s Catalytic Fund. In addition, Chow redistributed his shares and investment ($100,000) from a previous restaurant project to help create the Understory Worker’s Collective.
Understory has been open for a little over a year and has seven worker-owners who pay themselves a living wage (between $26 and $28 an hour), with health benefits and paid leave. The collective received a James Beard Award (the Oscars of the food industry) for its leadership and values, which include “uplifting communities of color, building economic sustainability, and supporting environmentally and racially just food systems.” Oakland Bloom’s goal is to help chefs build sustainable businesses for themselves, including a pathway toward an ownership stake in Understory, if they’re interested.
But is the worker-owner cooperative restaurant a sustainable model? What about the incubator kitchen concept? And could these innovations be replicated elsewhere in the country?
Cooperative coffee and worker-run pizzerias upend traditional hierarchy
Oakland Bloom’s Open Test Kitchen is not the first model of its kind in the Bay Area. The nonprofit La Cocina trains mostly female, BIPOC, and/or immigrant chefs on everything from menu development to marketing savvy. And 1951 Coffee is an industry training ground for newly arrived refugees.
Understory is not the first worker-owned Bay Area food collective, either. In nearby Berkeley, the Cheese Board Collective, which opened in 1971, is perhaps the area’s oldest and most successful example. Elsewhere, other cooperative cafes, bakeries, food producers and restaurants have also opted to upend the hierarchies of the food service industry, including the bookstore/café Red Emma’s in Baltimore; Phoenix Coffee Co. in Cleveland, Ohio; and Sri Lankan vegan restaurant Mirisata in Portland, Oregon. Some of these businesses, like Joe Squared pizzeria in Baltimore, Local Butcher Shop in Berkeley, and upscale restaurant/bar Donna in Brooklyn, have restructured their business models as a way to stay viable during the pandemic and beyond.
Understory, says its members, is hoping to go further by addressing the restaurant industry’s long-standing inequities in a region with one of the widest earning gaps between white restaurant workers and workers of color. The restaurant’s menu includes Filipino, Mexican and Moroccan flavors; pop-up opportunities allow other cooks to showcase their cuisines.
Photo by PapA Ricosuave: Diana Wu (Oakland Bloom Operations Director) at register, collective crew in the kitchen.
“One of the goals of Understory is to create and uplift the labor structure that we want to see,” says Diana Wu, a member of Oakland Bloom’s board of directors. “It’s an ambitious goal, given that the food industry operates on such small margins.” The organization also works with immigrants and BIPOC who have been historically excluded or exploited by the industry and face multiple barriers to access, including low income, language, child care and transport insecurity.
Chow says the collective practices what he calls “drastically different ways of operating, far removed from traditional restaurants,” including consensus decision-making, setting livable wages, creating a worker emergency fund, and offering insurance and sick leave. It’s also focused on how it wants to operate a commercial retail space in an actively gentrifying neighborhood and ways to make the venue available as a community resource, including offering a sliding scale menu, artist residencies, sliding scale or free commercial kitchen use, and collaborative cultural programing.
Cooking up change: One collective at a time
Named for the diverse ecosystem that blooms underneath rainforest canopies, Understory is housed in a 2,800-square-foot space that was supposed to be home to a restaurant Chow was cooking up before the pandemic and lockdowns hit.
Chow’s resume makes him well suited for this work. He has a background in social entrepreneurialism, strategic consulting for startups, and working in and running restaurants. He is the son of a Burmese immigrant who landed in the U.S. with next to nothing and went on to run a successful business; his mom owns a small insurance company. In addition, his uncle founded a variety of food service and retail operations here. Chow says they sacrificed a lot “but it was a combination of determination, resilience, resourcefulness and support from community that enabled them to navigate the harsh system immigrants typically face when coming to America.”
After switching gears to attend San Francisco Cooking School, Chow went on to cook in high-profile Bay Area restaurants before opening his own restaurant in Oakland in 2019, which shut down during the pandemic. Chow says the silver lining of the havoc wreaked by COVID-19 is it allowed him to pivot and focus on helping to develop Understory.
Founded in 2015, Oakland Bloom started an introductory program to food entrepreneurship for recently resettled refugees. Beginning in 2016, it piloted a series of pop-up dinners and night markets showcasing the cuisines and cultures of a small group of chefs. But Chow thinks big. He wants the organization to raise $1 million to 2 million a year to launch similar cooperative projects designed to serve local communities across the country. And he still dreams of opening Singapore-style hawker centers in the Bay Area.
More immediately, Chow is committed to sustaining Oakland Bloom and Understory. He says the collective hopes to attract a mix of different income sources, including multi-year grants from foundations and large individual or recurring donations, social impact funds, and funds designated for cooperative development.
“Our focus will be on foundations, organizations and individuals who are really passionate and aligned with our mission to work towards a healthy and equitable food service industry,” says Chow. “Without multi-year commitments or relationships with funders, there is an impact on our sense of stability in maintaining the work, how we are able to advance on our goals and strategies and how much capacity we need to constantly dedicate to seeking and applying for funding.”
