Business

Where every cent of $1 goes at one L.A. restaurant, explained

Published

2 years ago

May 26, 2024

Where every cent of goes at one L.A. restaurant, explained

My industry has always been as difficult as it is magical. In the post-pandemic era, challenges are categorically higher.

The threat to restaurants during the pandemic was obvious; it was a given that many wouldn’t come out the other side. In 2024, restaurants are back! No, restaurants are dying! No, restaurants are (sometimes) busy! It is whiplash, day to day.

For many, including my restaurant, Botanica, solvency is more elusive than ever due to the elevated cost of doing business. Since opening Botanica nearly seven years ago, our labor costs have risen 40% for hourly workers and 25% for salaried management, the result of minimum-wage increases and market-rate pay increases. Our rent has risen 17%. Our sales, on the other hand, have grown only 2.3%.

Obviously, this creates a near-impossible status quo. In our industry, there are no mechanisms for alleviating costs other than trimming spending on goods and labor.

In other words: There is no way to balance the books without compromising the quality, vision and values that define a business like ours. There are no tax breaks on costly insurance policies or credit card processing fees. And if we were to pass the costs on to our customers, we’d be compromising the vision and values that make us what we are. It’s an absolute conundrum.

Our way of doing business is under threat. From frequent conversations with restaurateur friends (including my co-founders of Regarding Her, a nonprofit focused on female food-industry leaders), I know that what Botanica is navigating at the moment is far from unique.

Botanica co-owner Heather Sperling lean against a wall, holding a glass of wine, at her restaurant

Why does this matter? Neighborhood-oriented restaurants are vital to communities and economies. They are meaningful gathering spots and dependable local employers. They support numerous other businesses: cleaners, farmers, coffee roasters, winemakers, equipment technicians, etc. They’re small and personal, and thus are approachable and accountable in ways that larger businesses aren’t. They’re often run by owners and managers who care deeply about their people, their neighborhood and their impact — even more than they care about their bottom line.

I know this because Emily Fiffer (Botanica’s co-owner) and I are among these people. And, moreover, we’re friends with dozens of like-minded owners across L.A. and beyond.

Eating at a place like Botanica might feel indulgent. Dishes on the spring menu range in price from $14 for marinated bean toast $36 for Baja striped bass. But from our perspective, the purpose of our business is not just to provide a nice evening of beautifully prepared, local, sustainable produce and natural wine. Our goal is to run a business with the most positive possible impact on our community, economy and environment — a business that embodies what we call “nourishing hospitality.”

There’s an economic concept called “the multiplier effect,” which describes how the effect of spending is greater than the original money spent. While every dollar you spend ripples through the economy in some way, restaurants surely must provide among the best bang for your buck, so to speak.

So one day I sat down to try to calculate exactly how this works with our model, and I landed on a startling figure.

Of every $1 spent by a customer at Botanica in 2023, $1.005 went back out the door.

Of that, 86.7 cents went toward “the good stuff” — meaning people, businesses and causes that it feels good to be supporting; 53.2 cents pays for the livelihoods of 50 staff members (including insurance, benefits and hefty payroll taxes); 26.2 cents buys products from a sensational web of farmers, purveyors and makers doing ethical, sustainability-focused work, who themselves employ countless passionate individuals; and 7.3 cents pays for a cadre of small businesses in supporting roles: our cleaning crew, florist, laundry services, a cavalcade of local equipment repair people, the family-run supplier of our recyclable and compostable to-go and market packaging, and so on.

The colorful tinned fish boxes at Botanica restaurant's marketplace.

And then 13.8 cents goes to occupancy costs (rent, utilities and trash/recycling/compost pickup); administrative costs (office supplies, our accountant, various apps and tools essential to operations, phone and internet, etc.); and the cost of credit card processing — 3.1 cents I really wish we could spend elsewhere!

The national average profit margin for independent restaurants is regularly cited to be in the zone of 3% to 5% (sometimes higher, often lower). This profit is necessary for retaining staff (raises), reinvesting in infrastructure (endless property and equipment repairs), navigating snafus (a power outage can result in thousands of dollars in losses), and repaying the investors, often friends and family, who funded the venture in the first place.

Botanica closed out 2023 with a 1.19% profit — but not from restaurant operations; those were just slightly less than break-even. Our revenue was boosted by a handful of commercial photo shoots held at the restaurant on days when we were closed.

Granted, Botanica is a more labor-heavy model than many in our cohort. We are open for breakfast, lunch and dinner; we have a robust coffee/tea/bakery program, and the front of our space is a market stocked with natural wine, house-made goods and products from local, largely women-owned businesses. These are laborious undertakings that require substantially more staff (with specialized training, no less) than a dinner-only joint. But these elements of our business, costly as they may be, are the ones that make us an especially useful, multifaceted neighborhood spot.

Co-owner Heather Sperling chats with two diners at Botanica in Los Angeles.

All this is to say that a restaurant like Botanica — like so many other independent, owner-operated neighborhood restaurants across the country — exists, first and foremost, to nourish its people. Hospitality is innately altruistic, and the neighborhood restaurant is especially, preciously, precariously so.

I don’t have any grand solutions to propose, though I do believe that low-margin, financially uncertain businesses like ours will need structural support to continue to exist. That 3.11% of revenue that goes to credit card processing fees ($98,725 last year, paid to our point-of-sale system, Toast) would be a transformational addition to our bottom line. And I’d vastly prefer to reinvest some of the 4.89% that went to payroll taxes ($155,000 in 2023) into our team.

In the absence of legislated solutions, it comes down to the diners. Nearly 20 years ago, right as I was starting out in the food world, Michael Pollan introduced the concept of “voting with your fork” via his seminal book “The Omnivore’s Dilemma”; it’s his way of succinctly expressing the importance and power that your daily food choices can have.

A selection of wines on display at Botanica in Silver Lake.

A waiter behind a counter, reaching for a straw to put in a drink he is holding.

I’ve been trying to come up with a corollary that relates to the restaurant world — “dining with your values” doesn’t have the same ring to it; my suggestion box is wide open! — as a way to convey what it means to support restaurants not just for the creative/buzzy/exciting food they serve but for the broader philosophy that informs their work and exponentially impacts their small corners of the world.

Because for us to keep doing what we do, we need your support — and your understanding of the positive ripple effect that your support has. I hope this encourages you to feel good about your next brunch/dinner/coffee/cocktail outing at a thoughtful, community-minded restaurant near you.

It means more than you may know.

Heather Sperling is the co-founder and co-owner of Botanica, a restaurant and market in Silver Lake, Los Angeles.

Business

California-based company recalls thousands of cases of salad dressing over ‘foreign objects’

Published

5 hours ago

December 19, 2025

Press Room

California-based company recalls thousands of cases of salad dressing over ‘foreign objects’

A California food manufacturer is recalling thousands of cases of salad dressing distributed to major retailers over potential contamination from “foreign objects.”

The company, Irvine-based Ventura Foods, recalled 3,556 cases of the dressing that could be contaminated by “black plastic planting material” in the granulated onion used, according to an alert issued by the U.S. Food and Drug Administration.

Ventura Foods voluntarily initiated the recall of the product, which was sold at Costco, Publix and several other retailers across 27 states, according to the FDA.

None of the 42 locations where the product was sold were in California.

Ventura Foods said it issued the recall after one of its ingredient suppliers recalled a batch of onion granules that the company had used n some of its dressings.

“Upon receiving notice of the supplier’s recall, we acted with urgency to remove all potentially impacted product from the marketplace. This includes urging our customers, their distributors and retailers to review their inventory, segregate and stop the further sale and distribution of any products subject to the recall,” said company spokesperson Eniko Bolivar-Murphy in an emailed statement. “The safety of our products is and will always be our top priority.”

The FDA issued its initial recall alert in early November. Costco also alerted customers at that time, noting that customers could return the products to stores for a full refund. The affected products had sell-by dates between Oct. 17 and Nov. 9.

The company recalled the following types of salad dressing:

Creamy Poblano Avocado Ranch Dressing and Dip
Ventura Caesar Dressing
Pepper Mill Regal Caesar Dressing
Pepper Mill Creamy Caesar Dressing
Caesar Dressing served at Costco Service Deli
Caesar Dressing served at Costco Food Court
Hidden Valley, Buttermilk Ranch

Business

They graduated from Stanford. Due to AI, they can’t find a job

Published

17 hours ago

December 19, 2025

Press Room

They graduated from Stanford. Due to AI, they can’t find a job

A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.

The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.

When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.

Top tech companies just don’t need as many fresh graduates.

“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”

While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.

Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.

“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”

The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.

Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.

“The industry for programmers is getting very oversaturated,” Akgul said.

The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.

Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.

It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.

In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.

Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.

Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.

A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.

“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”

To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.

Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.

Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.

Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.

As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.

“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”

After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.

Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.

“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”

Business

Disney+ to be part of a streaming bundle in Middle East

Published

1 day ago

December 18, 2025

Press Room

Disney+ to be part of a streaming bundle in Middle East

Walt Disney Co. is expanding its presence in the Middle East, inking a deal with Saudi media conglomerate MBC Group and UAE firm Anghami to form a streaming bundle.

The bundle will allow customers in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE to access a trio of streaming services — Disney+; MBC Group’s Shahid, which carries Arabic originals, live sports and events; and Anghami’s OSN+, which carries Arabic productions as well as Hollywood content.

The trio bundle costs AED89.99 per month, which is the price of two of the streaming services.

“This deal reflects a shared ambition between Disney+, Shahid and the MBC Group to shape the future of entertainment in the Middle East, a region that is seeing dynamic growth in the sector,” Karl Holmes, senior vice president and general manager of Disney+ EMEA, said in a statement.

Disney has already indicated it plans to grow in the Middle East.

Earlier this year, the company announced it would be building a new theme park in Abu Dhabi in partnership with local firm Miral, which would provide the capital, construction resources and operational oversight. Under the terms of the agreement, Disney would oversee the parks’ design, license its intellectual property and provide “operational expertise,” as well as collect a royalty.

Disney executives said at the time that the decision to build in the Middle East was a way to reach new audiences who were too far from the company’s current hubs in the U.S., Europe and Asia.