Reigning kings of dining

It has taken fifteen years to instill the awareness of “haute cuisine” into the local dining scene, and that accomplishment can be attributed largely to foreign influence. Today, Prague’s food & beverage industry is a thriving, multifaceted sector that encompasses catering and many other services.

Photo by: Vojtěch Vlk

” APART FROM RESTAURANTS offering Czech cuisine and pizzerias, there was nothing,” says Nils Jebens, owner of Kampa Group, recalling his arrival in Prague. Jebens now operates five Prague restaurants and one in Bratislava. “That void enabled us [foreigners] to ‘get a foot in the door’,” he adds. While Czechs always liked to eat, during communism’s fifty-year presence they practically forgot how to eat out, not to mention tasting exotic specialties. “The Czechs’ idea of fine dining didn’t get beyond beer pubs with white table cloths,” says Josef Voltr, PR, marketing, and sales manager for the Kolkovna Group, which comprises five eateries in Prague. “Czechs didn’t have the funding to create this category, so foreigners logically seized the opportunity – and they hold their positions to this day,” Voltr notes.
Since then, the face of the food service industry here has changed beyond recognition. According to 2001 Eurostat data, 90% of the EU restaurant sector is dominated by small, individual establishments (often family-owned) employing under ten people. Although such restaurants also account for 95% of the Czech market, several groups slowly but surely divided up the Prague market among themselves. There are four major players in the fine dining segment – Kampa Group, Zátiší Catering Group, Pálffy Group, and Bacchus Group – while chains like Kogo, Ambiente, Kolkovna Group, Potrefená husa, and Pizzeria Coloseum dominate the middle segment. According to the Czech Republic National Federation of Hotels and Restaurants (NFHR) research, these middle-segment restaurants are replacing very inexpensive restaurants in popularity. “The number of inexpensive restaurants is declining, due, among other things, to the negative impact of the higher VAT,” states Václav Stárek, NFHR’s general secretary.
According to unofficial data, there are almost 1,000 restaurants in downtown Prague alone. Competition is still growing, but cognoscenti confirm that there’s still room for development in the market, and there’s still a call for some new types of restaurants. And although the customer base is limited in Prague – unlike in New York or London – restaurants now firmly established don’t compete very much with each other. “Each restaurant is focused differently and provides a different type of entertainment,” claims Zdeněk Sirový, the owner of C’est la vie and one of the few Czech entrepreneurs competing with these groups.
Although the middle-segment groups can’t compete with fine dining in terms of quality, luxury restaurant owners admit they share customers. People who like to dine in peace at Kampa Park or Barock also like going out for a quick lunch at Potrefená husa or Kolkovna. “They don’t have premium locations, but they target a broader spectrum of people,” Sirový says. Whether upper or mid-range, venue quality has truly improved across the board, due in part to the professionalization of the market. The greatest change occurred among suppliers. “When I started, I had to fly in some fresh products – like fish – myself,” recalls Tommy Sjöö, owner of Bacchus Group. Today it’s easy to buy everything, from fresh fish and seasonal delicacies like truffles to the finest wines from producers around the world. All this is in essence a reflection on the travel industry – as the number of hotels and restaurants rises, so does the demand for supply services. This in turn “raises the bar” on what local restaurateurs have to offer. “Today you can’t just seat the client anywhere, you have to pay attention to the details in order to surprise them with something,” notes the owner of the Pálffy Group, Roman Řezníček.

Tomáš Karpíšek
Photo: luminum – d.raub & l.šavrdová

How many is enough?
The aforementioned Eurostat data also indicates that restaurant and hotel chains with over 250 employees account for only 0.1% of the hospitality industry, yet they create 19% of the jobs and 23% of total sales within the segment. Indeed, financial strength is the greatest advantage a group has over individual establishments. “It brings a good amount of purchasing power,” explains Sanjiv Suri, Zátiší Catering Group’s owner, adding that lower shared costs, for expenses such as marketing, is another advantage. Besides easier access to bank loans – which are practically off limits for individuals – groups have better negotiating positions with suppliers, who may offer advantageous deals. “They pamper us in terms of both quality and price, because there’s a difference between buying two hundred kilos or two tons of fresh fish a month,” notes co-owner of Kogo, Jovo Savić.
In spite of the widely-held misconception, foreign tourists don’t predominate among luxury restaurants’ clientele. “Tourists are only the icing on the cake,” says Bacchus Group’s Sjöö. In fact, most restaurant owners try to draw in locals – and the more restaurants one owns, the more local diners one can address. Sjöö, who has already opened 16 restaurants in his career, is convinced that, “If you create one restaurant well, the more likely customers will be willing to try another one of yours.” Sirový of C’est la vie has a contrasting opinion, insisting that such a scheme is basically competing with yourself. “With a chain it’s hard to stick with the basic idea and keep a watchful eye on each restaurant,” Sirový says, claiming that he doesn’t want another restaurant. “I think a chain can’t work in fine dining. If you look at the Michelin Guide, none of the restaurants in the highest category have sister establishments,” he explains.
On the other hand, as Josef Voltr of Kolkovna Group points out: “If the concept’s good and it becomes popular it can expand – even to other countries”. Which is precisely what his group is planning. After several successful years of operating Kolkovna, Celnice, and Olympia, it is starting a franchise system with an eye to expansion into Europe within four or five years. The company switched to a joint-stock legal entity, and its owners don’t currently intervene in the daily operation of individual establishments, concentrating instead on developing the company. Tomáš Karpíšek, owner of the popular Ambiente franchise, has a similar approach. “One of franchising’s big advantages is you don’t have to take part in daily operations; you have time to be creative and innovative,” he opines. Kampa Group doesn’t have a franchise system, but Jebens works on a related principle. He delegates daily management responsibilities and devotes himself to making improvements, following trends, and creating new concepts.

Recipe for success
So what are the magical ingredients that make a successful restaurant? “There are three: environment, food, and service,” insists Řezníček. “A good location, a view, and the option of sitting outdoors also help,” adds Jebens. Savić, Kogo’s owner, stresses fresh, high-quality ingredients. And although food is naturally the most important factor, Karpíšek points out that when a restaurant is rated, its atmosphere takes on greater significance. Therefore he first creates the menu and then adapts the atmosphere accordingly – everything from wine glasses to decorations. And many restaurant owners work with renowned designers. “Today restaurants spend the most on architects and artists to custom-create everything – interior, plates, glasses, etc,” says Řezníček.
However, what all this progress means is that it’s also a lot harder to open a new restaurant today than ten years ago. Not only do you need more starting capital, you also have to comply with stricter regulations and face greater competition. Sirový, who opened C’est la vie in 2002, confirms this. “It’s much more complicated to find a good venue, and it takes longer to get established, because there are more good restaurants. I had the advantage of finding a good location, but I had to provide high quality right from the beginning, so as to meet expectations,” he says. One ongoing question is whether the (now developed) local market can accommodate more concepts, venues, and restaurateurs. “It’s still possible to be successful [with a new restaurant],” insists Karpíšek, pointing to the dining scenes in New York and London, where new ideas are always being born.

Kampa Group – Nils Jebens: The viking restaurateur

Nils Jebens
Photo by Vojtěch Vlk

At first there was Kampa Park – a restaurant named after the well-known Prague quarter and park. It was the offspring of two partners, Norwegian Nils Jebens and Tommy Sjöö from Sweden. Today they are competitors, each with several establishments to their credit.

JEBENS KEPT KAMPA PARK, as he did with Le Monde in Bratislava. Gradually he added Square, Hergetova cihelna, Bazaar, and La Provence. The restaurants are intentionally different from each other, not only in design but also in cuisine and target group. Kampa Park remains the flagship, a classic fine dining restaurant that serves many foreign and VIP guests. Square is a café-restaurant, Hergetova cihelna is a large restaurant and a trendy lounge and serves a broad spectrum of clientele. The latest of Jebens’s acquisitions last year were Bazaar on Nerudova Street and La Provence, formerly a restaurant and tapas bar and today a typical French brasserie. Both establishments cater to tourists and local upper-middle-class patrons.
” I wanted to establish a corporation. When you have one restaurant you essentially do everything yourself, but with a bigger company and several establishments you can hire top professionals to help you,” says Jebens. Another advantage comes from shared risks. The destructive flood of August 2002 laid to waste not only Kampa Park but also Hergetova cihelna, which was just about to open. “If we hadn’t had the cash flow from Le Monde and Square, it would have been a lot harder to restore everything to its original condition. So in this sense growth turned out to be a good strategy,” Jebens explains.
Kampa Group has 250 employees, and Jebens says six restaurants are enough. Stable operations allow him to finance projects through bank loans. However, he admits that if he had known the effects of EU accession on cash flow and the associated VAT change in the catering industry from 5% to 19%, he would probably have considered growing less rapidly. “Suddenly the VAT was nearly quadrupled, which was murderous. You can’t immediately pass on the costs to the customer, so for some time you have to take it out of your profit,” Jebens says angrily. “Fortunately, we had ‘a bit of meat on the bone’, or we wouldn’t have been able to survive.”

Klára Smolová

Rewarding loyalty

Josef Voltr
photo by luminum – d.raub & l.šavrdová

Restaurants owners have to think hard about how to find and keep customers amidst heavy competition. That’s why the segment now makes use of the latest marketing strategies.

“TODAY THERE’s a marked move to direct marketing,” says Josef Voltr, the PR, marketing, and sales manager for Kolkovna Group. After recently joining Kolkovna, one of his first projects was the Kolkovna Friends club, which is based on a simple principle – a client registers, and when he reaches a tab of CZK 5,000 he gets a silver card (later a gold one), which entitles him to a discount. The club may gradually take on retail partners from whom the customer also gets discounts.
Today nearly everyone uses some sort of loyalty program. For instance, Nils Jebens, the owner of Kampa Group, has a “loyalty program” with a database of thousands of clients, so he can readily find out in which of the group’s restaurants they last ate and what they had. “It allows us to know our customers perfectly and give them what they want,” Jebens explains. Roman Řezníček of Pálffy Group takes a similar approach. His loyal clients can become Club d’Or members and enjoy a discount of 10-20% off their tabs. Nevertheless, Řezníček stresses that he doesn’t want to organize his clients in any way. “It rather involves spontaneous communication with my customers,” he says. Loyalty can also be evaluated by another, more discreet approach that predominates in fine dining. “I prefer personal contact with customers on the homey restaurant model. To greet them, or occasionally have the house pay the bill as a gesture of respect,” says Zdeněk Sirový, owner of the C’est la vie restaurant on Kampa.
However, Sirový adds that it’s almost impossible to do business without advertising these days. “But it has to be well targeted,” he emphasizes. For example, the Ambiente group almost always advertises in women’s magazines. “Our research indicates that it’s mainly women who decide where to go for dinner,” says the group’s owner, Tomáš Karpíšek. Ambiente’s own loyalty program is four years old and has about 500 members (including firms) who enjoy discounts of up to 50%. Last year they also established an internet club for members to enjoy contests, recipes, and special offers.

Jason Hovet, Klára Smolová

Bacchus Group – Tommy Sjöö: Following a gut feeling

Tommy Sjöö
photo by luminum – d.raub & l.šavrdová

When asked for his strategy for success, Tommy Sjöö points to the staff running around his restaurants. “It doesn’t matter what you do, you have to create a good team and be a leader,” he says. In sport, business or life, “the ingredients are very much the same,” he adds.

This is one thing he’s learned in 15 years of running restaurants in Prague-and abroad-through his company, Bacchus Group. The 51-year-old Swede, who had been visiting the country since 1979 as an amateur golfer, came to Prague after 1989 – after selling a flourishing construction business in his native country – and quickly landed the opportunity to run the restaurants at Obecní dům. He knew then that a restaurant group was what he wanted. “That was the original plan from the beginning,” he explains. Out of the 16 restaurants he has created throughout the years, currently Sjöö has five, four of which are in Prague – Barock, Pravda (with a sister establishment in Spain), Hot, and Mercedes Forum Café.
He approaches each restaurant differently. For example, for Pravda he wanted to build an eclectic menu with a taste of the world; the result is one dish from more than a dozen countries around the globe. “A lot of people say you can’t be good in all this kind of food – but I think we can,” he insists. He also brings an Asian influence to Hot and is currently reworking Barock to focus on simple, but filling, food. When starting a new place, Sjöö says he just asks himself what he wants or where he would personally like to eat.
In marketing, he also relies on this approach. “I have some strategy, but I go mostly on feeling,” Sjöö says. Over the years, the group has sporadically organized events and trips, thrown parties, held tastings and taught food courses. “The best marketing is always to have a good product and give the guest more than they expect,” he notes. “It sounds simple but isn’t always easy to do.” That’s where his 200-strong team comes in again. “It’s not me,” he says, “but the people around me who are making the restaurants successful.”
This doesn’t means Sjöö has a hands-off management style. He says he is hanging around his restaurants whenever he is in Prague – which is the large majority of time. In the end, though, restaurants for the Swede aren’t just a business. “For me it’s not work,” he says sincerely. “I do it because I love it, because it’s a pleasure.”

Jason Hovet

Pálffy Group – Roman Řezníček: Paying attention to details

Roman Řezníček
photo by vojtěch vlk

Roman Řezníček, Pálffy Group’s owner, is one of the few Czechs who’s managed to build and maintain a position in Prague’s fine dining segment, which is mostly occupied by foreigners. This 35-year-old Moravian started out at a time when he and the public still had a lot to learn about first-rate gastronomy. He bet mainly on high quality, discretion, top-quality staff, and diversification.Pálffy Group, named after the first restaurant, Pálffy Palác, today includes the U Zlaté studně restaurant, just below the castle and boasting one of the most beautiful views of Prague, Sovovy Mlýny on Kampa, and the Mecca musical club. The basis of the Pálffy Palác concept is international haute cuisine in an exclusive, discreet environment. Although a hotel-restaurant, U Zlaté studně is Řezníček’s premium establishment, for which he hopes to get a Michelin rating one day.
All three restaurants have very attractive locations in downtown Prague. “I think an original, interesting location accounts for 30% of success,” Řezníček stresses. He says that today’s customers are much more demanding as to the environment, and that you have to pay lots of attention to details. The staff is also important. “My remuneration system is set up as if each employee were my partner. Each restaurant has a set profit goal, and depending on how well it does, the staff either gets a bonus or has its pay docked,” Řezníček explains. “I send managers for internships abroad, and I give them paid vacations to clear out their heads.”
Řezníček literally started from scratch, and once thought he’d open a new restaurant each year. He’s since changed his mind. “Fully devoting yourself to two or three projects is better than being unable to manage excessively fast growth,” opines the owner. “I want to frequent my restaurants, to talk with guests, get to know them, and I want to provide the finest dining, but I don’t want to be a slave to my business,” he concludes.

Klára Smolová

Zátiší Catering Group – Sanjiv Suri: Cooking up new strategies

Sanjiv Suri
photo by vojtěch vlk

The Zátiší Catering Group operates upscale restaurants Bellevue, Mlýnec and V Zátiší, as well as Prague’s biggest catering outfit and the elegant event space, Circle Line. What has the group’s owner, Sanjiv Suri, placed the greatest emphasis on in his 15 years of experience? Training.

The basis is the group’s in-house training manual, which has a strong focus on the customer. It also calls for staff to take responsibility for customer visits and to work to make each visit unique. It must be effective, as Suri claims most staff have been around roughly 10 years and turnover never tops 10%.
To attract customers, Suri has only recently created a marketing department – a team of two people. “Marketing has always been word-of-mouth,” he says. As part of a new effort to concentrate on dining atmosphere, all his venues will all get an interior makeover within the next year. “Our strength has always been on the food and personnel side,” Suri claims.
The group – including the catering division – has six executive chefs, and several well-known chefs have spent time in the kitchen, most notably Carlo Bernardini. “This definitely helps,” Suri says, adding the effect is felt both internally and externally. On the one hand, it can motivate staff to reach a higher level, what he calls the “ripple effect”. Naturally, a well-known chef will also get new clientele’s attention.
Another attention-getter is the catering group, which Suri began in 1998, and which today brings in half of the group’s revenues. “Catering is a totally different business than restaurants,” he points out. He learned this when some big events – like the International Monetary Fund meeting – came and gave his team a crash course in catering large events.
Learning and evolving, however, are some of the keys to the restaurant business. Could he repeat his success if he were to start today? “I don’t know,” Suri ponders, “but I would definitely give it a try.”

Jason Hovet

Training is the main course

Jovo Savić
photo by dorothea bylica

“Staff is crucial,” says Kampa Group’s owner, Nils Jebens. In a sector where high employee fluctuation is a grim reality, keeping the best people is one of a restaurateur’s main concerns.

“RESEARCH SHOWS that customers mostly do not come back to a restaurant because of problems with staff,” notes Jebens. Co-owner of Kogo restaurants, Jovo Savić, adds to this: “If you don’t care about your business, neither will your employees.” Every day you can find him running around his restaurant working as a waiter, receiving supplies, solving problems, and welcoming regular customers. “I work together with my staff, after hours we drink together. I pay them well and I think it shows on how they work,” Savić explains proudly.
Performance bonuses and profit sharing are indeed common ways to motivate staff. For example, senior staff at Zátiší Catering Group participate in the latter, while the rest of the team can receive bonuses when they reach a certain sales level or even cost level. However, as Bacchus’ Sjöö says, “Money is not the only motivation.” Like other restaurateurs, Sjöö thinks training and eduction are key.
Zátiší Group even produces its own manual on how to treat customers. It also stresses empowerment – that is, giving staff free reign over how best to satisfy guests, to do the extra things to make their visit memorable. “If no one is looking over their shoulder, they take more responsibility,” says group owner Sanjiv Suri. For instance, once a guest so admired the wine glasses that one waiter arranged for her to bring them home.
Training within a group can also vary from venue to venue. Ambiente group has a number of different styles under its umbrella. At its Italian restaurants, for example, the training centers around wine, so some staff were sent to Italy and sommeliers were employed to teach about matching wines to food and other skills. At the Cafe Savoy, however, owner Tomáš Karpíšek sees atmosphere as being key, so training focuses on communication and making customers feel comfortable.

Jason Hovet, Klára Smolová






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