Latest / The Inspired Stories Podcast / How Shapiro's Deli Maintains a 120-Year Legacy in Indianapolis | Restaurants & Franchises Series

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How Shapiro's Deli Maintains a 120-Year Legacy in Indianapolis | Restaurants & Franchises Series · The Inspired Stories Podcast

0:04
Welcome to another edition of Inspired Stories, where leaders
0:07
share their experiences so we can learn from their successes,
0:10
how they've overcome adversity, and explore current challenges
0:13
they're facing. Welcome to another edition of
0:17
the Inspired Stories podcast where leaders share their
0:21
experiences so we can learn from their successes and be inspired
0:25
by how they've overcome adversity.
0:27
My name is Anthony Kotaspodi and today's guest is Brian Shapiro,
0:31
CEO of Shapiro's Delicatessen with two locations in
0:35
Indianapolis, IN. They have a legacy that goes
0:38
back farther than any guest I've ever had.
0:41
Their ancestors had a grocery business in Odessa, Ukraine in
0:44
1795. Fast forward to nineteen O 5
0:49
when Lewis and Rebecca Shapiro fled anti-Semitism in Russia to
0:54
arrive in Indianapolis where they brought their family
0:56
heritage of providing nourishing food to America.
1:00
They began selling flour and sugar on the street from a
1:02
pushcart. A couple years later they opened
1:05
their first deli just South of downtown Indy where the family
1:09
lived above the store and everyone pitched in over the
1:13
years. The family has a history of
1:15
standing up to oppression and anti-Semitism.
1:18
Brian has a strong interest in and has been heavily involved in
1:22
the local Indianapolis community, which we'll hear more
1:25
about. Shapiro's have evolved their
1:27
concept and product offering over the years and are proudly
1:30
serving the community from both their downtown location at eight
1:34
O 8 S Meridian St. and at the Indianapolis airport.
1:38
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2:09
Now back to our guest today, the CEO, Shapiro's Delicatessen.
2:13
Brian, I appreciate you making the time to Share your story
2:16
today. Well, thank you for having me.
2:20
So Brian, let's start with the customer experience at
2:23
Shapiro's. Paint a picture for someone who
2:25
has never been before and you want to entice them in.
2:31
Well, we have the advantage that we've been in business for 120
2:37
years. So in some regards we're a
2:41
legacy and people come to Indianapolis and around the
2:46
Midwest to eat, you know, Jewish style food.
2:52
In fact, during the pandemic, we had quite a few people from
2:59
Central Illinois, their journey to Indianapolis on the weekends
3:04
to eat at our restaurant because the restaurants in Illinois were
3:07
closed. So you know, our, our, our
3:12
journey is how we are. You know, we're well known.
3:17
I always tell people we're a dinosaur because we, you know,
3:22
actually make the food from the beginning.
3:24
We don't buy any pre cut, pre made pre peeled potatoes or
3:30
lettuce or, or anything. And we, we hand cut every item
3:34
and which drives my financial people cuckoo because, you know,
3:40
it's expensive to do that and, and our labor costs are high,
3:43
but it's how we've been doing it.
3:45
And you know, I'm, I'm not going to be the person that's going to
3:50
change what has made us successful.
3:53
You know, we use Kraft Philadelphia cream cheese.
3:56
We buy them in 60 LB blocks for our cheesecake, which cost twice
4:03
as much as, you know, some other brand, but it tastes different
4:07
and that's what the recipe calls for.
4:10
So we do everything we can to stick to original ingredients,
4:15
original names, and try not to substitute.
4:18
So when people come into the restaurant, everything that we
4:22
give them or sell them is the finest that we can buy either
4:28
locally, nationally or even internationally.
4:34
And so when somebody walks in, is it more of like a meat deli
4:39
counter? Is it a restaurant style sit
4:41
down? Is it a combination of the two?
4:44
Well, we have two sides. We started out, as you pointed
4:47
out, in the grocery store business.
4:49
And then as the Jewish neighborhood changed, we added
4:55
more food, meals that you could purchase.
5:00
And you know, eventually the Jewish neighborhood, in fact,
5:03
the entire neighborhood disappeared and we were strictly
5:09
a restaurant. However, we did have a
5:11
delicatessen counter where we cut corned beef and pepper beef
5:15
and salami and locks. And just recently our area is
5:23
becoming gentrified with modern apartments, old housing stock
5:30
that has been remodeled and becoming more vibrant as it was
5:36
50 years ago. But when you come in, the
5:40
restaurant side is cafeteria style, old fashioned Jewish deli
5:45
cafeteria style, where people, you know, pick out what they
5:49
want. And, you know, I have
5:53
experimented with trying to get away with that concept, and it
5:59
doesn't work. When people think of Shapiro's
6:02
in our name, they have a picture of what it looks like and young
6:07
people that come in and going, oh, no, this looks like school.
6:11
And then once they get used to it, it becomes part of the
6:16
shtick that we have it. It's just how we do business.
6:18
It's how we deliver food. And, you know, the customer
6:23
actually talks to the person that's cutting their meat for
6:27
their sandwiches. So if they want it leaner or
6:30
thinner or fattier, they can actually get that to happen.
6:36
And I think that kind of adds to the the the flavor of, of the
6:41
restaurant to to why we are successful is that we can make
6:47
that happen. My youngest daughter does
6:51
artificial intelligence for NVIDIA and I always talk to her
6:54
about becoming more automated. And she goes, no, don't do that.
6:58
Make people think. Make people have to decide what
7:01
kind of mustard they want and what kind of cheese they want
7:04
and and they have to interact with somebody now.
7:09
Is that what you mean by it? It's like school.
7:13
Well, at school you just pick up what you want.
7:17
At a cafeteria in a school that that's the first thing that
7:21
people would see. The difference with us is that
7:25
there's actually, actually interaction with the sandwich
7:29
cutter or with people that make food, you know, So it's more
7:36
than just a delivery method. It's also an interaction with
7:41
human beings that create your product that you want to eat.
7:47
And your daughter is encouraging you not to lose.
7:50
That that is. Correct.
7:51
Not to go towards the the side of automation, but encourage
7:54
that customization, that interaction and.
7:57
We do have online ordering and and the online people are always
8:03
selling us a product and then when we sign the contract about
8:08
a week into it they go this is far more complicated than
8:11
anything we've ever done. So there's all these add-ons
8:17
that you can do to a sandwich and it's more than a normal
8:25
amount. I mean, it is a huge number and
8:28
sometimes it changes because of, you know, the what the produce
8:34
is. You know, I mean, we've about to
8:38
finish up with asparagus, but you know, we have fresh
8:42
vegetables all year round. And you know, this year the
8:48
produce is 2 weeks early everywhere.
8:52
You know, Michigan blueberries have started in in the southern
8:58
part of the state and that's two weeks early.
9:01
So everything is early. Why is it early this year?
9:09
Warm, You know, it's been warmer the, the northern states didn't
9:14
get a late frost, which usually kills stuff and we didn't get
9:21
that or shrinks it. So we're going to have a very
9:24
robust crop, which is good because, you know, produce cost
9:30
is through the roof. I mean, you know, fortunately,
9:34
you know, Wisconsin, Ohio, Michigan broccoli is coming into
9:40
play and because the the California and Texas crop was
9:45
kind of light. In fact last couple weeks
9:50
bushels of broccoli was $72, which is double what it should
9:55
be. So, so we should be seeing a
9:57
dramatic decrease in in the price of produce at least for
10:02
the next three months. And so when you see those big
10:06
fluctuations in produce prices, are those things that you're
10:10
able to build into and increase cost of the the product or is
10:15
that something that you just take on the chin?
10:18
We try to look holistically for the entire year of what to price
10:24
produce. When the broccoli got to $72 a,
10:33
a bushel, we, we, I, I just told him not to order any.
10:38
We just didn't have it. And, and as you know, when the
10:44
price of produce goes up, the quality generally goes down.
10:50
You know, it's, it's, it's, it's one of those weird things when,
10:54
when the price is inexpensive, there's a bountiful supply and
10:59
the quality is very good. Now looking at your site here,
11:04
Brian, I see parties and catering are are these
11:10
significant sources of revenue for you guys?
11:13
You know, it, it's kind of interesting.
11:15
Before the pandemic, maybe 9 or 10% of our business was
11:21
catering. The pandemic made it go to 0.
11:27
We are recently seeing more catering, more parties, more use
11:35
of that activity. A lot of the the companies that
11:40
have gone to remote work at some point in time, they're having
11:46
people get together and it's usually in their old office, in
11:50
their conference rooms. And, you know, they want to
11:56
bring people together. And, you know, they finally have
12:00
figured out that food is kind of a great way of getting people to
12:04
come to eat, you know, to come together.
12:06
And, you know, in the old Jewish fashion of breaking bread, you
12:12
know, I mean, an old Friday night habit of, of, you know,
12:17
breaking bread. So, you know, people got around
12:19
and they talked. And I'm seeing an uptick in that
12:27
occurring different than before where you'd cater an office
12:32
party. Now we're kind of catering
12:35
sections of groups of people of offices, you know, that, that
12:40
want people to come together and, and, and, and talk about
12:44
what's going on. So we're, we're seeing kind of
12:48
a, a, a new version of catering. I I don't know if that I
12:55
explained it well enough, but. Sure.
12:58
Yeah, the the pandemic kind of wiped things out and then now
13:02
coming back from the pandemic, the the catering looks a little
13:04
bit different than it. Used right, I mean, you're still
13:07
selling the same products or maybe a slight different in in
13:12
the market share of what what they want.
13:15
But it it it is, it is coming back in in a slightly different
13:20
form, but you know, same dollars.
13:25
I'm curious, Brian, was there for you, any doubt growing up
13:29
that you would become part of this family legacy, this family
13:33
business? Well, I went to Indiana
13:37
University as an undergrad accounting major at Kelly School
13:43
of Business, and then I went on to law school in Bloomington and
13:49
really kind of thought I was going to be a tax lawyer.
13:53
Tax treaty person working in LA and, but I'd always kind of
14:01
grown up in the family business, you know, my side of the family,
14:07
my grandfather Joe, who, who worked in the delicatessen in
14:14
Indianapolis, married a gal and moved to East Central IN in a
14:21
family that had nine grocery stores.
14:26
So I, I'd always kind of grown up in the grocery business.
14:31
And then as I got older, my great Uncle Max, who was running
14:34
Shapiro's Delicatessen, decided that I need to run the store
14:42
because he was getting older and didn't know what to do with it,
14:45
didn't have any kids. So they kind of appointed me to
14:50
do it. And about 5-6 months after I
14:57
came in to work, he died. So here was this historical
15:04
restaurant basically just dropped on me with I had
15:13
employees that were that had been with Uncle Max for 40 or 50
15:18
years. And here I am 2425 years of of
15:23
age, you know, dealing with people that have been there 40
15:27
or 50 years. And I also inherited three other
15:34
great aunts and uncles to manage their affairs.
15:38
So it was kind of a shock when you're 2425 years of age go, Oh,
15:44
by the way, not only going to run this historical restaurant,
15:48
you also have three other family members that are in their 80s
15:53
that you're going to take care of until they die.
15:58
That's a lot to put on the plate of a young man.
16:00
So it, it, it was a very interesting experience.
16:04
It, it was fine. I mean, it worked out, but you
16:09
know, it, it, it, it truly gives one a different perspective on
16:17
life because again, I, I was dealing with people that were my
16:23
father's aunts and uncles, you know, that some have been some
16:29
that were born in Russia. So it it, it.
16:35
And again, it all worked out and you know, everybody was taken
16:40
care of and happy. Where do you see the business
16:46
going from here? Do you like the the two
16:50
locations that you have? Do you see some growth
16:53
opportunities? Do you see trying new concepts?
17:00
I Shapiro's was part of the screwball exhibit in Los Angeles
17:09
on Jewish delicatessens and it travelled to New York in Houston
17:16
and and ended at the Holocaust Museum in Skokie.
17:23
The LA exhibition. We were a very large part of the
17:30
exhibition. In fact, when you walked in, my
17:34
great Uncle Abe was this gigantic billboard of Jewish
17:41
delicatessens. So we went to I was invited to
17:46
the opening in Chicago and they had the morning drive host of
17:51
WGN spending an hour with Levy of Levy Brothers, Melman of of
18:01
Let Us Entertain You, the owner of Manny's Deli and another
18:10
Jewish successful person in a restaurant business in Chicago.
18:15
They spent the 1st 5 minutes talking about the delicatessen
18:18
business, about how it made no sense in today's restaurant
18:24
world because we don't serve alcohol, our food costs are high
18:31
and it just doesn't make the model of private equity or
18:39
banks. The other 55 minutes was trying
18:43
to figure out how to fix Michigan Ave. in Chicago.
18:49
And the point that I'm making is that, you know, the Jewish deli
18:57
is kind of a dinosaur. You know, unless you've already
19:01
been in business, it's, it's hard to redo it.
19:06
Now granted, there are there are people that are mom and pop
19:12
operations that open up Jewish delicatessens in cities
19:19
throughout the country and they do quite well.
19:23
There's one in Atlanta. My oldest daughter went to Emory
19:27
University and there was one called General Mirror.
19:32
And it's kind of a modern Jewish deli concept.
19:39
And I think they do a good job, but you know, the the owner is
19:45
the chef and he's there. So I think that, you know, the
19:50
future of of the Jewish delicatessen is somewhat limited
19:55
except for, you know, the neighborhood people that are
19:58
going to do it themselves. And you know, rather than being
20:04
a manager or a chef someplace, you know they're going to put
20:09
their. Their passion into the little
20:13
local stores. But again, the biggest
20:18
difficulty that we have is is food cost.
20:22
I mean it, it's ridiculous. I mean, you know, you take a
20:27
pastrami, a real Jewish pastrami comes from the navel. 98% of
20:36
your people that listen to your podcast have no idea what a
20:41
navel is. And the type of pastrami that
20:44
they're eating is probably coming from a flat or a round or
20:48
some other type of cut of meat. Because the navel is, if it was
20:55
on a pig, it'd be bacon. And it's a very rough cut of
21:00
meat. I mean, it, it, it is a cut of
21:02
meat that became a pastrami because it was a tough piece of
21:05
meat, had lots of fat on it, had gristle in it, had all kinds of
21:11
stuff in it. So, you know, they had to cure
21:14
it, they had to smoke it to make it tender.
21:18
And it's just hard to do. And it's hard to find labour
21:23
that wants to trim it out and deal with it.
21:27
And, and most of the navels, because of the shortage in the
21:35
butcher industry, they just grind it up for hamburger.
21:39
I mean, they just throw it in for hamburger or they export it
21:44
to Korea or Japan. So it's, it's a, it's a, it's a,
21:54
it's a cut of beef that when they're on the assembly line at
21:59
A, at a large production kill plant, you know, it, it costs
22:06
too much, there's too many trims and cuts in it that have to
22:10
occur as it's going down the assembly line.
22:13
So as I say, most of it just gets thrown into hamburger.
22:18
So back to the original point is, you know, the future of the
22:21
deli, you know, it is somewhat limited because of our cost and
22:29
the inability of our food to really go well with alcohol.
22:33
You know, most wine, you know you need some cream based
22:38
product to to eat to have wine with or an oil based product
22:45
being you know, when you think about when you when you are
22:48
drinking wine and what pairs with what.
22:52
You know a crumbed beef sandwich goes pretty good with a lager,
22:57
then go really well with much of any type of beer.
23:02
And you know, private equity who invest in restaurants and want
23:07
returns. You know they want alcohol or
23:13
non alcoholic beverages. They want it now to be 50%.
23:19
And in the old days, you know, they were happy if it was 25%,
23:25
but they now want menus around high profit items.
23:32
And, you know, so you now have investment bankers making
23:41
decisions for restaurants. Have you experimented with
23:46
alcohol in your locations at all?
23:49
We sell beer and wine, but you know, it's, it's less than 1% of
23:55
sales. We just, you know, it, it, you
23:58
know it, it, it beer and wine, the beer goes.
24:02
And I and I, and as I mentioned to you in a, in a prior
24:06
conversation, we, we originally had ten kinds of different
24:12
beers. We had Miller Lite, we had
24:14
Budweiser, we had Heineken's, we had Guinness.
24:17
We had all these different types of beers.
24:21
And one of our local people comes to me and wanted me to put
24:27
in their beer. And I look at my managers and I
24:32
go, you know, having 10 or 12 different kinds of, of beer was
24:37
a real pain because you had to take inventory of 10 or 12
24:40
kinds. You know, it, it, it, it was
24:43
just took up a lot of space. So we we switched and we put in
24:50
three beers of Daredevil, which is a beer made by the
24:57
Indianapolis Motor Speedway and beer sales doubled.
25:02
Go figure. Here's all this marketing and
25:06
advertising of Budweiser and Miller and everybody knows who
25:11
they are. And then we put up these 3 beers
25:16
from Daredevil and they sell and, and a lot of times people
25:23
will, will see the beer and the customer will go, what is this?
25:27
Because what, it's a local beer that we sell.
25:30
We, and we don't have any other brands.
25:33
And people try it and we tell them, I go, you know, if you
25:36
don't like it, bring it back. We'll give you something else.
25:38
We'll give you back their money. You know, I mean, it's like we
25:41
want people to be happy and you know, they buy it, they like it.
25:48
I mean, you know, it gets people outside their comfort zone.
25:52
And so do you think the beer sales doubled because this was
25:55
just a novel product, or it was better, or maybe there were
25:59
fewer options now and that made it easier for people to choose
26:02
something? I think it could be, I think you
26:04
could write an essay on all three of those.
26:07
I, I, I, I think it's a combination thereof.
26:12
I, I think that again, I think that it steps outside of
26:19
people's normal comfort zone. You know, it's like, it's like
26:23
the craft beers, you know, very successful model.
26:31
I mean, you know, obviously some of them are more successful than
26:35
others, but you know, people go, well, these are kind of cool and
26:41
and it's different. It it it's not been mass
26:45
produced. You know, they're they're all
26:48
small batches. So somebody's actually tasting
26:51
them. It's not a computer, you know,
26:55
it's not like it's not like wine.
26:57
You know, where you know, you'll have a a great bottle of wine
27:01
and then you start the next year, you go, well, you know,
27:03
this is not as good. And then you find out it's owned
27:06
by, you know, some monster publicly traded company and
27:11
they're just spiking it with previous year's blends and
27:16
different amounts of sugar to make sure that it all tastes
27:20
alike. So a true connoisseur of wine
27:24
goes, you know what, you're selling this to the masses and
27:29
you know, they want and and you know, their MBAs that are
27:33
running the company are going, hey, we wanted to be the same.
27:36
We want standardization. Let me assure you if you get a
27:41
corned beef sandwich at Shapiro's, the one that you get
27:46
versus the next person in line, it's going to be a little bit
27:49
different because it came from a little bit different piece of
27:52
the brisket and 10 customers later, it'd be a whole different
27:59
brisket. So there is a so in my business,
28:04
it's not perfect, you know, it's not standardized.
28:07
In fact, I think we make it a big deal that it's not
28:11
standardized. And again.
28:13
There's beauty in that imperfection.
28:15
You know, and again, and if you get a sandwich and you take it
28:17
to the table and you think it's too fat here to bring it back,
28:21
we'll, we'll trade it in. I mean, you never know.
28:25
I mean, you know, we make hundreds and hundreds of
28:26
sandwiches a day and we try to be as good as we can.
28:31
And sometimes we're just not perfectly perfect.
28:36
Well, and what you're describing though is, is a tremendous level
28:39
of customer service that you don't get in a lot of places.
28:42
Oh well. You know the the other
28:46
unfortunately my wife and I about 3 weeks ago went to France
28:54
and the week before my business manager controller passed away
29:01
suddenly. And so I hired a contract CFO
29:10
group that that only does financial and Costa County no
29:13
tax work. And, you know, they have this
29:16
long questionnaire and they interview my managers and, and
29:22
Christy looks at me. She goes, you know, we do a lot
29:24
of restaurants. The last person that you've
29:27
hired knew in this restaurant was in October, you know, which
29:32
was, what, nine months ago? I go, yeah, we don't have a lot
29:36
of turnover. People come to us and you know
29:40
they don't leave. What do you attribute that to?
29:47
You know, that's, that's not something I hear very often from
29:49
people that I talk to. It's, it's a tight labor market.
29:53
It's hard to find good people. It's hard to keep good people.
29:55
We. Invest a lot of effort in
30:01
keeping people, trying to make them better, trying to help
30:05
them. And it's important that the
30:14
employee understands that it's a family business and they get a
30:21
lot of flexibility with a family business.
30:24
Before the pandemic, you know, people working 5-6 days a week.
30:31
I would estimate that 80% of my employees now want to work four
30:35
days a week and they just as soon work 10 or 11 hour days as
30:41
5/8 or nine hour days. So we adjusted that which excuse
30:49
me, obviously increase the number of employees and, and how
30:53
we manage it. But it works and we have some
30:57
employees that, you know, they, they just as soon work five or
30:59
six days a week and, and they're done.
31:03
But I would gander that 80% of my people want to work only four
31:08
days a week. And longer days.
31:12
Longer days to. Get their hours.
31:14
Yeah. And how many days a week are you
31:16
open? 7.
31:19
OK, even on the Sabbath? Yeah.
31:20
Even on the Sabbath we we used to before the pandemic we were
31:24
open for breakfast. Now we just do breakfast on the
31:27
weekends. I I post pandemic seems not.
31:37
I mean, the breakfast crowd doesn't seem as big as it was.
31:44
And, you know, I think that because people are working at
31:47
home, you know, that they're, they're just eating at home, you
31:54
know, and, and, and, and I, and I think they figured out that
31:58
they can make just as good a cappuccino at home than Star
32:04
Starbucks and not pay for a lot less and, and not pay $9 for,
32:11
for brown water. I want to go back to what you're
32:16
doing for the employees, aside from having more flexible
32:19
schedules for them, you know, and allowing them if they want
32:22
to work, you know, longer days, but four days a week instead of
32:26
shorter days and five or six days a week.
32:28
What are some of the other things that you're doing to help
32:30
retain and recruit good people? Well, you know, first of all, I,
32:36
I think every employee that I have except for one, which is a
32:43
very unusual situation somewhat dictated by this employee's
32:49
father who is his guardian. I think that every employee of
32:56
mine makes at least $15.00 an hour as a base and the average
33:05
wage is probably around 23 to $26 an hour and.
33:15
Compare that to What is the minimum wage in Indiana right
33:19
now? $7.75 OK Indiana has a
33:28
legislature that is they they, they just want to let the free
33:35
market dictate the wage. So the wage in Indianapolis, you
33:43
know, it's somewhere between 12:50 and 20 bucks an hour to
33:48
start a job in small towns. In Indiana, you know, it might
33:56
be 8. So it's just different in in
34:02
some of the suburbs of Indianapolis, it may even be
34:05
higher. So you guys are able to offer a
34:08
much better wage to your folks. Than right and and and and that
34:12
is important and then you know we have kind of with the tipping
34:20
that we do and then customers do that helps a lot in motivating
34:27
employees to be nice to upsell. Now I'll make the footnote.
34:35
That doesn't always happen. We sometimes get an employee and
34:40
a customer that get into it and argue and and we resolve that
34:46
and, and sometimes employees lose their jobs because of
34:51
things that they have done. So we try to make it very
34:56
customer oriented. The employees completely
35:00
understand that they want to make more money.
35:04
We got to sell more product. You know, it, it's it's a it's a
35:08
very clear thing. You know, it's not like, you
35:12
know, the cooks know that they want to make more money.
35:15
They got to cook more. You know, it's not one of these
35:18
programs what don't sell that or you know, I don't, don't you
35:21
know, this is hard to make or whatever.
35:24
You know, we, we are a very fast play paced, you know,
35:29
capitalistic organization that, that is focused on customer
35:38
service and good food and, and, and rewarding employees.
35:43
And again, I, I, we have not hired a new person since
35:48
October, although my general manager the other day said that
35:54
she may want to hire another person.
35:56
But you know, you've talked to a lot of restaurants, been to a
36:00
lot of restaurants. We don't lose any busboys.
36:05
I mean, we don't lose any busboy.
36:07
And if we do lose a busboy, I can assure you that within six
36:12
months they're begging to come back.
36:16
It's a desirable place to work the way you're.
36:18
Right. I mean, yeah, they, they, they
36:20
do well and and but again, you know, how do we stay in business
36:27
as 120 years through generations?
36:31
So your original question is the future.
36:35
I, I, I, I think the future of our business is just kind of
36:39
complicated. You know, I, we, we're going to
36:42
build a hotel across the street from the restaurant and some
36:46
heritage property that we own. And myself and a good friend of
36:52
mine, Steve Oakley, that's a James Beard chef and worked at
36:57
Trotters as, as and his young youth have been designing a
37:04
rooftop bar menu with the show we called the direction of
37:13
private equity. So, and Steve's kind of funny.
37:20
He goes, you know, some of these guys are kind of scary, but he
37:25
goes, I, I understand. You know what?
37:26
Once you start listening to him and you start seeing and you go,
37:29
OK, we get it. So we, you know, and it is very
37:35
interesting with these rooftop bars that private equity goes.
37:39
Here are three items that you must have on the menu, a
37:43
hamburger, French fries and a chicken sandwich and.
37:54
And how do you feel about accommodating that?
37:56
It's fine, you know, I mean, you know, I, I, I look at we sell
38:02
hamburger. We, you know, we, we get a, the
38:06
vast majority of our hamburger from southern Indiana by one of
38:11
the few live kill plants that USD inspected in the country
38:17
'cause we were buying the stuff already ground in the chubs and
38:22
from, you know, Iowa beef or, you know, I mean, they're just
38:27
mass produced. And, you know, I kept seeing
38:30
these recalls and I'm going, this is just crazy.
38:34
So, you know, we, we started up with them maybe 15 years ago
38:39
and, you know, they, they make it and it, and it's fine.
38:42
It's, it's locally, relatively locally sourced, you know, maybe
38:46
100 miles from Indianapolis. And so, you know, I, I, I know a
38:54
little bit about hamburger and you know, we'll end up doing a,
38:59
a smash burger style a it's quicker.
39:06
We won't probably make it super duper flat.
39:12
You know, it, it, it'll be flat, but not to the point that it's
39:17
just hard cooked. And, you know, but we will also
39:22
add other items on the rooftop bar menu that will encourage
39:30
consumption of, of, of liquid, you know.
39:35
The carry the Shapiro's name. No, no.
39:38
But we, we probably will have a pastrami sandwich or something,
39:43
you know, that they can have because we, we close at 7:30 at
39:47
night and this will close at 11. OK.
39:52
What's the timeline for this opening do you think?
39:56
16 months, you know, we, we, we started right before the
40:02
pandemic and then we had the pandemic.
40:05
So then that stop things. And then, you know, we've been
40:09
trying to figure, you know, try to catch material cost going
40:15
down and kind of this somewhat I, I guess you would call it a
40:21
retail commercial recession. You know, you know the.
40:27
Yeah, Brian, you meant you mentioned COVID and I came
40:30
across an article that made reference to a previous crisis
40:35
that you endured that kind of put you in a better position to
40:40
face the unexpected COVID pandemic.
40:43
I'm curious to hear more about that.
40:51
Is that not ringing a bell? Well, you know, I mean, we had a
40:59
fire. OK.
41:02
In 2001, I think it was winter, we had an ice dam on the roof
41:17
and the roofing contractor that we've known for and used forever
41:22
sent somebody up there in the, you know, I mean, it was 20°
41:28
outside and they took a torch to melt the ice dam.
41:36
Problem was the torch got a little bit too hot underneath
41:41
and did $1,000,000 of damage in, in, in, in the building.
41:50
So we were closed for about 90 days.
41:52
Wow, so that kind of kind of helped deal with with what do
42:07
you hang on one second? It's my two year old dog,
42:12
Millie. As I say, we're up here in
42:17
northern Michigan and she's in my in in a room up here and can
42:21
look at the woods and there's probably a chipmunk or something
42:24
that she's not happy with. And I got the door shut.
42:29
So back to your question. We have, you know, we, we had
42:35
this fire that tore the thing apart and we, you know, had to
42:41
re examine putting it back together.
42:44
But you know, we, we've had, you know, just, you know, when you,
42:49
when you've been running a business for 40 years or so and
42:56
you have spent the rest, your whole life growing up in the
43:00
food business, you, you, you have all kinds of, of, of issues
43:06
that you deal with. You know, I, I think that, you
43:09
know, one time I unfortunate, we had a second location on the
43:13
north side of Indianapolis and one of my managers got shot and
43:17
killed. Oh, wow.
43:20
And, you know, I had just recently gotten married and it
43:26
was completely tough, difficult. So, you know, you, you, you,
43:35
you, you start second guessing yourself.
43:37
You know, what could we have done?
43:39
Why did this happen? You know, was it random?
43:43
Did we, you know, were our procedures of closing too LAX?
43:51
Because, you know, you never think of anything like that was
43:54
going to happen until it happens, you know, so, so.
44:01
What were some of the things that you did to not only for
44:05
yourself to get through that, but to support staff through
44:07
that difficult time? Well, you know, we had meetings
44:12
with the staff on the loss and, and, you know, anger, but
44:20
eventually we, you know, added night security, off duty
44:25
Indianapolis police officers and you know, we've spent quite a
44:30
bit of money on that, but it makes a safer place.
44:36
Hopefully. We have internally less theft.
44:39
Externally we have less theft, you know, keeps the parking lot
44:44
safer. And you know, crime is
44:48
everywhere. You know, you can talk about it
44:54
being in in major cities, but it's in the suburbs as bad.
45:01
A lot of it is not talked about as much.
45:07
A lot of drug issues in, in rich affluent areas.
45:14
So, you know, all of these things are, are, are stuff that,
45:18
you know, we, we just deal with in, in, in the restaurant
45:20
business. You know, we, we, we have
45:23
everything. So, you know, when you come to
45:27
Shapiro's and you get a meal, I'm not going to tell anybody
45:31
that it's inexpensive because the food is just expensive and
45:36
it, it's going up. I mean, because, you know, the
45:40
labor cost is going up and the entire supply side is, is just
45:49
not doing well. You know, the, the, there's a
45:53
trucker shortage, there's refrigeration trucking shortage.
45:58
Private equity is gobbled up these small trucking companies
46:03
that would do less than a full load of freight.
46:07
And, you know, they'll ship products from the East Coast to
46:10
say, Toledo and then send it from there.
46:14
And, and every time food frozen or fresh is touched and moved,
46:21
there's a big opportunity for it to get mishandled and bad, bad
46:25
things to happen to it. And, you know, unfortunately,
46:29
private equity people have no idea.
46:31
You know, they just go, well, this is the most efficient thing
46:34
to do. Toledo's inexpensive place.
46:37
It's, you know, near Detroit and Chicago and, and we can redirect
46:42
stuff from there and that and that's fine and well, but highly
46:48
perishable products that have a short shelf life, it's not good
46:54
because you're adding a day or two of transportation to it.
47:00
Brian, I'd like to take a step back and talk a little bit more
47:03
about the, your family legacy because reading on your website
47:08
and some of the articles that I found, I'll just quite a, a
47:13
legacy of what I'll call adaptation.
47:15
You know, whether your family in the past has had to be bold and
47:19
decisive in the face of, you know, oppression or just the
47:23
changing local food environment. I'm curious to hear you share
47:28
maybe one of your favorite stories of what I'll call family
47:32
adaptation over the years. Well, you know, my great Uncle
47:37
Max, you know, who died in 84 at 80, you know, maybe the original
47:48
food story was herring. And the herring would come in
47:52
these gigantic wooden barrels and they'd be in the cooler.
47:59
And my grand Uncle Max would, you know, would complain about,
48:03
you know, sticking his hand in these, you know, the the these
48:09
barrels of salt brine with pickled herring in it.
48:15
So he always tells the Sir about one day he didn't want to wait
48:18
on this customer. And his mother, Rebecca said,
48:22
Maxi, go wait on it because I don't want to wait on her
48:25
because she's a bad customer. And Rebecca looks, you know, you
48:30
know, broken, broken English looks at him and goes, what are
48:33
you talking about? Well, whatever fish I pick her,
48:38
she doesn't like. So I got to go back and go pick
48:43
a different fish out. It could be the same fish, but
48:46
she wants me to go back. And, you know, herring, which
48:52
very few people even know about anymore.
48:56
You know, once you get herring on your skin, it's it's very
49:00
difficult to get off. I mean, you know, if you cut a
49:04
fresh onion, you know, you get that on onion oil in you.
49:09
Well, this is triple that. So Rebecca looks at her son and
49:15
goes maxi, the only bad customers, the one that doesn't
49:19
come in. So yeah, talk about family,
49:26
heritage and learning, you know, that's kind of a pretty big
49:32
item. I mean, that kind of speaks for
49:35
it all, unfortunately for me. And I try to do better, but, you
49:43
know, sometimes it's best for me not to talk to an angry
49:48
customer, which is why my wife is great at dealing with
49:53
customers because, you know, sometimes I look at them and go,
49:57
what do you want me to do? What would make you happy?
50:02
And, and you think, well, that that's a pretty black and white
50:05
answer. A lot of customers are pissed
50:09
off over that answer because they're going, well, you're not
50:11
making me happy. You're you're just, you're,
50:14
you're just being smart with me. You screwed up.
50:18
I go well, you know, and, and, and so, you know, I, I those are
50:23
my, my answer is not sometimes a good answer.
50:26
Whereas my wife and some other people are, are just much better
50:30
at going, you know, yeah, that didn't turn out real well or
50:34
something. And you know, more loving in
50:38
their answer where I'm like, not just I, I just want to fix it.
50:45
Now, is there a succession plan in place?
50:48
Is there any family that would like to take over the
50:51
leadership? Well, that is a great question
50:54
on the 5th generation. My oldest child Ellen went to
51:01
Emory, worked in a fortune hunter company and now does
51:05
private equity and the youngest one works for NVIDIA and does
51:09
artificial intelligence. And I really don't know whether
51:14
or not any of them want to be on call 24/7.
51:21
So that's a very good question and and that question will will
51:26
be answered when my demise occurs or I'm not capable of
51:30
making decisions so. To be determined.
51:36
To be determined and people can say, well, your chicken, well,
51:42
I'm realistic. Bryant, tell me about the ways
51:49
in which you've been involved in the local community and why
51:52
that's so important to you. There are not many business
52:00
people that have historical knowledge of the city, of a
52:08
community or even a business. And sometimes I'll look at
52:16
things that leadership wants to do and I go, wait a minute,
52:24
guys, where did you come with this idea?
52:28
Explain to me the logic of this idea.
52:34
And, you know, sometimes I help them, sometimes they ignore me.
52:42
But I, I think that it's important for people, especially
52:48
elected leaders who are just cast with a whole bunch of
52:54
duties and responsibilities, to sometimes get a different
52:58
perspective. Sometimes I'm called or referred
53:02
to by the younger groups of the angry old elder.
53:08
And when they do that to me, I go, OK, fine, let's walk through
53:13
the let's walk through the issues and how do we get this
53:18
done? And my team is very good at
53:22
that, you know, because you know, sometimes you'll, you'll
53:25
get engineers for the city that want to build sidewalks or roads
53:31
and, and you're going, OK, it's a pretty picture.
53:36
Now, how do you make it? How do you keep people open?
53:39
How do you make this function at the same time as you make this
53:43
pretty Rd. because if you get rid of all the businesses and
53:47
maybe that's your goal because you want to get rid of these
53:50
businesses, how do you make it work?
53:56
And you know, I, I just think that it's important that people
54:04
communicate about ideas. You know, a lot of people run
54:13
for office because they're single issue people.
54:17
I'm going to fix the homeless. I don't like the trash that's
54:20
going on. And then all of a sudden they,
54:23
they, they get this position and they figure out that they now
54:29
got to deal with sewers and they got to deal with buses and they
54:34
got to deal with a whole bunch of other things that they didn't
54:37
sign up for. And you got your constituents
54:42
going, well, we want XY and Z. And they're going, where am I
54:47
going to get the funding from? You know, who am I going to take
54:50
it from? Am I going to take it from the
54:52
fire department, the Police Department?
54:55
And, you know, so they have to make choices.
54:59
So I think that it's very important that the business
55:02
community and historical knowledge is reminded of people.
55:10
And I read how there's a an overpass that had become very
55:17
cluttered with human waste and trash and nobody was really
55:22
doing anything about it. And you took it upon yourself,
55:26
pulled out of your own pockets to clean that area up.
55:30
Yeah, and and, you know, it's an ongoing process, You know, I
55:33
mean, they caught me doing it, but you know, we just continue
55:40
to do it and now. They caught you doing it.
55:43
They didn't want you to do it. Well, the TV people caught me.
55:47
I, I, I have no idea whether. You know, it's a very
55:53
interesting Ave. when you're dealing with federal interstates
55:59
because the property is actually owned by the federal government,
56:03
the state federal state. So that's technically under
56:08
Homeland Security and Homeland Security goes wait, wait, I
56:12
don't want to deal with the homeless people.
56:15
So and then, you know, the state and the city homeless department
56:20
goes, well, we don't have jurisdiction to go on their
56:22
land. So it's kind of one of these
56:26
great things that don't fit and they don't want to talk and you
56:31
know, everybody just kind of wants wants to look the other
56:34
way. So, you know, we, we, we kind of
56:38
keep it clean. Since that article, the city has
56:43
spent $5,000,000 remodeling our our street, going from a four
56:49
lane Rd. to A2 lane gentrified lane with cute sidewalks and
57:01
bicycle paths and all kinds of things.
57:05
So we'll see how we'll we'll see how this you know, we'll see how
57:09
the next chapter works. One of the problems that they
57:12
didn't do was fence in the the area underneath the Interstate
57:20
where people would sleep. Got it.
57:25
Brian, I just have one more question for you, but before I
57:28
ask it, I want to do 2 things. If you liked today's content,
57:32
please hit the subscribe, like or share button on your favorite
57:34
podcast app. Brian, I also want to tell
57:37
people the best way to get in touch with you.
57:38
What would that be? Brian@shapiros.com.
57:45
Easy enough. Last question for you, Brian,
57:47
I'm kind of curious. You've got obviously great
57:50
historical vision, great historical context to pull from.
57:54
I'm curious how you see your industry, and in particular
57:58
Shapiro's evolving in the next five years.
58:02
Well, Shapiro evolving in the next five years is is somewhat
58:09
of the growth plan of the city of Indianapolis where they have
58:12
taken downtown Indianapolis and put all the sports stadiums,
58:19
convention centers, you know, within a three or four block
58:26
walking district walking area. And I always tell people from
58:32
from out of town, I go just think of a Big 10 fraternity and
58:36
sorority party. That's what Indianapolis has
58:40
done with sports that people come to the community city and
58:46
they've just made it into one big fun, exciting area to be.
58:53
And they've also done this with conventions.
58:58
I'm sure you just watched the US Olympic swimming trials in
59:03
Indianapolis, of which my wife and I went to one of the
59:07
sessions and it was absolutely spectacular.
59:13
They took swimming and made it like an NFL game in announcing
59:18
the swimmers and also with laser lights, the Academy Awards all
59:27
combined into one. And just you know, for instance,
59:34
row one of a of a Colts game for the swimming would be row 11.
59:41
So row 11 during a Colts game was was row one for swimming
59:45
because they made the platform and it was just absolutely
59:48
spectacular. And frankly, our business for
59:53
the 10 days of swimming trails were better than when the Super
59:57
Bowl was in Indianapolis. I mean, it was unbelievable what
1:00:03
what they did. Just just, you know.
1:00:09
And was it so much better because it was a longer period
1:00:12
of time that it was going on, or does it just draw a bigger
1:00:15
crowd? The way that the city did it,
1:00:19
the way that the people that run visit Indy, the sports
1:00:27
corporation for the city and their vision basically to grow a
1:00:33
sport. I mean, I mean they basically
1:00:36
took swimming and grew it into a national recognition and they
1:00:47
were bringing people from all over the country.
1:00:49
And, and at the end of the day, I mean the people that spend the
1:00:53
most money in a city are tourist.
1:00:57
We have our regular customers, our regular business, but you
1:01:02
know, the growth is going to be with the tourist.
1:01:05
And as the city keeps growing, downtown Indianapolis and
1:01:14
Indianapolis is kind of the blueberry as a Democrat city in
1:01:24
the Raspberry jello of the state.
1:01:28
And because of that conflict, should we call it?
1:01:36
But they're Hoosiers at heart. They figure out how to get it
1:01:39
done. Sometimes they wrestle and fight
1:01:43
and scream at each other and at the 11th hour they come up with
1:01:49
a pretty good plan. But getting to that 11th hour
1:01:55
can be just turmoil and you never know what's going to
1:01:59
happen even from the potential of dissolving the city of
1:02:05
Indianapolis by by the state, I mean, I mean, it gets pretty
1:02:10
crazy. But so, you know, so, so the,
1:02:15
the, the future of us is a lot of growth from just the city
1:02:22
expanding their footprint. As for my industry,
1:02:30
unfortunately, you know, we're going to see the the little
1:02:37
local pockets of the entrepreneur restaurant person,
1:02:43
but it's probably going to be in a second site of the original.
1:02:48
You know, they're going to take over somebody else's restaurant
1:02:52
site that put too much money into it and couldn't afford the
1:02:55
bill because a restaurant equipment and everything is just
1:03:00
so expensive today. You know, a hood system, you
1:03:04
know, if you want to put a hood system into a restaurant, it's
1:03:08
anywhere from 70,000 to 150,000, especially when you add 10 tons
1:03:16
of air conditioning to that system and they can't make
1:03:21
enough money to pay for the cost to get into the restaurant
1:03:25
business. So the chains, you know, they
1:03:29
can buy stuff cheaper and then they'll put it in.
1:03:32
But you know, because there's so many other restaurants, they
1:03:36
don't do a good job managing them.
1:03:39
So you're you're going to have this, this turnover, but you
1:03:47
know, you're going to have the big chain restaurants, their
1:03:51
heritage restaurants and and then you're have, you know,
1:03:55
little bits and pieces of mom and pop.
1:04:01
So you know, you're not going to see very many brand new mom and
1:04:08
pop restaurants. They're going to end up, you
1:04:12
know, taking over a, a place that was somebody else's
1:04:15
restaurant and it's kind of like a used car.
1:04:19
You know, you can buy $100,000 Porsche and in three years you
1:04:26
can buy it for 60,000. And you know, there's, it's,
1:04:32
it's still fine, you know, and maybe the, you know, the $60,000
1:04:37
Porsche, you got to spend 5 grand on it to fix something on
1:04:41
it, but you're not going to spend the bigger number.
1:04:45
And, and, and, and I think that's what's going to happen as
1:04:49
we evolve because the mom and pop people, you know, first of
1:04:53
all, to put in a minimal kitchen is $350,000, maybe 500,000
1:05:03
realistically. Well, you know, they're going to
1:05:08
have a 75 seat restaurant, they're not going to be able to
1:05:12
and and that doesn't include buying the tables, the chairs,
1:05:16
you know, doing the tenant improvements, you know, putting
1:05:20
in floors and all that stuff. So you know you're looking at a
1:05:24
million, million and a half bucks just to start.
1:05:30
Yeah. So we're we're less likely to
1:05:32
see mom and pops because the big guys can buy things at scale.
1:05:39
It can operate at scale, which is more efficient, better
1:05:42
pricing. And we'll probably see more of
1:05:45
the, the used car thing where somebody comes in and takes over
1:05:49
an outfit that, you know, had had paid the expensive price to
1:05:53
equip a facility and they can step in and they can operate it
1:05:57
more efficiently now because they don't have.
1:05:58
That right and all they may need to do is buy, you know a $10,000
1:06:02
new stove and a $10,000 new oven and you know, for $20,000 they
1:06:08
got a half $1,000,000 of cooking equipment.
1:06:14
There you have it folks. Brian, I want to be the first
1:06:17
one to thank you for sharing both your time and your story
1:06:20
with us today. I really appreciate it.
1:06:22
Well, thank you very much. You've asked very enlightened
1:06:25
questions and hopefully your audience enjoys what they heard.
1:06:31
I'm sure that they will. Folks.
1:06:33
That's a wrap on another episode of the Inspired Stories podcast.
1:06:36
Thanks for learning with us today.