Restaurateur and businesswoman Fleur Caulton, who opened Rata in Queenstown with celebrity chef Josh Emett in 2011, talks to Jane Phare about the hard lessons learned when Covid-19 stopped income from nine restaurants overnight.
With 30 years as a successful restaurateur under her chopping board, Queenstown foodie Fleur Caulton didn't think there were any lessons left to learn about running a food business.
Pre-Covid, the Go To Collection's nine restaurants – Rata, Madam Woo and Hawker & Roll – were ticking along nicely and Caulton was on the lookout for just the right sites with a view to opening more. Her main problem was finding staff with the right fit, qualified and passionate about food and hospitality.
Then along came Covid-19 and lockdown. Suddenly she went from a business that had funds coming in every day to nothing.
The timing couldn't have been worse. Her Go To Collection group had just paid "an enormous amount" for the fit-out of a new Hawker & Roll restaurant at Auckland's swanky Commercial Bay which was due to open on March 26 - smack in the middle of Level 4.
"That would normally be our slush fund but when you're in growth mode that's what you do. You use your money for your growth," Caulton says.
Rentals for the group's 11 sites – Rata, three Madam Woo restaurants, five Hawker & Roll outlets, a Queenstown support office and the Hawker Kitchen in Ōnehunga that produces products for the group such as curry pastes – were due on April 1. Negotiating with 11 different landlords was a time-consuming "nightmare", she says.
Business had already started to slow down in January with Chinese tourists staying away. Then came lockdown: closed restaurants, no income and the possibility of 200 staff needing holiday pay.
"You don't have 200 staff's holiday pay sitting in the bank, do you?"
Although trading stopped, thousands of dollars in bills didn't: power, gas, site rental, phones, the internet, the subscriptions to technology systems used to run a food business – payroll, point of sale, customer feedback, rostering, HR systems.
They lost $125,000 worth of fresh stock, giving away food, kegs of beer, open bottles of wine. There wasn't enough on-site capacity to freeze fresh food.
Caulton recalls the "absolute chaos" of those first days before the wage subsidy was announced. With half their staff on immigrant working visas, she wasn't even sure if they would qualify. She was forced to take out a loan to get through.
It was a business shock that Caulton and her team could never have imagined.
"We consider ourselves to be very good at what we do and very cautious financially. And yet we were caught short. There have been very tough lessons learned."
Since then it's been hard yakka, long hours spent trimming every bit of fat and keeping the businesses running. The Christchurch Madam Woo never re-opened. Cost management became the new buzzphrase.
Caulton drew hard on help and advice from some of Go Too's "mini shareholders" and board members – her neighbour, businessman and philanthropist Sir Eion Edgar, Emma Hill, who chairs the Michael Hill jewellery business, and Stephen Tindall through the K1W1 investment company.
Hill, a shareholder and board member from day one, has been a huge support, Caulton says. "She's been a rock for me, available at any time."
Right from the start, Caulton knew she wanted more than just a partnership with Emett. She was after a business with good structure and good governance. When Covid struck, that paid off.
"It's the best thing we ever did to have great people around us. I feel very lucky that we've had that in the background."
Caulton has discussed at length with her board what sort of help businesses like hers will need to get through the Covid era: support for landlords and tenants to reach reasonable agreements; cheaper and fairer contactless payment; the availability of loans on reasonable terms either from banks or the government; measures to support availability of skilled staff; and assistance to train staff through subsidised business mentor programmes, including teaching digital technology.
"I think those things would be hugely helpful for small businesses."
Hospitality has been in Caulton's life since she opened her first restaurant, Solero Vino, in Queenstown. She was 21 years old and knew nothing about running a business.
Nine years later she went to work for a new vineyard called Lake Hayes Vineyard, helping to build a global wine brand and establishing a world-class restaurant which became known as Amisfield.
While she was there, she invited Emett, then working in London for Gordon Ramsay, to attend an Amisfield lunch. The 250 tickets sold out immediately and Emett and Caulton started what was to become a long-term friendship and partnership.
They opened Rata in 2011 and two years later, after noticing a gap in the market, opened their first Malaysian-inspired Madam Woo.
These days Emett is less hands-on, living in Auckland and concentrating on his new venture at Waiheke's Oyster Inn. Caulton runs the group largely from her Queenstown base, hopping in a speedboat at a jetty near her Kelvin Heights home, where she lives with her husband Daz and 15-year-old son Max, to whizz across Lake Wakatipu to town.
"We use the boat as a car really. We're back and forth to town every day."
Six months after Covid taught her some hard and fast lessons, Caulton is cautiously optimistic. The Commercial Bay Hawker & Roll opened in June and is trading well. The Go To Collection is not back to pre-Covid business levels but is encouraged by local support.
Things are going well enough for Caulton to start thinking about the future. Tourism will eventually recover in places like Queenstown but where, she wonders, will she find the right qualified staff. Hospitality relies heavily on immigrants on working visas but she says the restrictions are cumbersome.
"We're going to be battling a very uphill battle to have enough staff trained in the right way. And there are not a lot of Kiwi chefs floating around. It's been a skill shortage for many, many years."
The problem became worse last year when the Work to Residence Visa salary requirement rose from $55,000 to nearly $80,000. That salary increase has put it outside the reach of many hospitality employers.
And although plenty of Kiwis will be looking for jobs, Caulton says they don't see hospitality as a long-term career and she knows she will struggle to fill the roles with New Zealanders.
Immigrant staff, on the other hand, view it as a career. They often arrive already highly trained and will stay, climbing up the career ladder.
"Turnover of staff is a very expensive business. The longer you can keep them, the better it is."
She criticises immigration rules as inflexible, and in some cases "ridiculous". Why, she asks, if her business hires an immigrant worker for Madam Woo in Queenstown, must that worker always stay at that site?
"We've got three restaurants in one street and they couldn't go and work up the road at Hawker & Roll or Rata if we had someone fall sick. Crazy."
Caulton's not ruling out opening new restaurants in the future. The Takapuna Madam Woo does well but she's never found quite the right site on the other side of the Harbour Bridge.
And sometimes, the site just doesn't work. The Dunedin Madam Woo had already closed in January by the time Covid struck. Caulton couldn't find the right skilled staff and sorting it out meant a three-and-a-half-hour drive from her Queenstown home each time. After going through four chefs in the space of a few months, she pulled the plug.
"Business is never as straightforward as you'd like it to be."