Since the Covid‑19 pandemic wreaked havoc on New York’s food industry in 2020, its long-term effects, like those of the illness itself, have been persistent and severe. The city’s economy depends on office work and tourism; when companies shifted to working from home and travel drastically declined, the food industry was decimated. Most visibly, restaurants, which before the pandemic provided a large and growing base for the city’s service economy (New York State Comptroller 2020), were suddenly shut down. Then, after the state government allowed them to reopen, they were hampered by constantly changing restrictions issued by the governor, the mayor, and local and federal public-health authorities.
Wildly popular outdoor dining that has enabled at least 10,000 restaurants to survive now confronts a patchwork of ad hoc regulations by the city government and an uncertain process for both permanent legalization and determining rent (Fortney et al. 2021). Food processing, the only manufacturing sector to grow in New York in recent years (Becker and Dourmashkin 2015), is strained by efforts to procure materials and recruit labor.
Restaurant workers, the majority of whom are immigrants, mainly Latinx and Asians (New York State Comptroller 2020), have experienced some of the worst conditions. They lost their jobs when public-health restrictions caused their employers to close, risked exposure to the virus when they returned to work, and dealt with nasty customers who refused to wear face masks or complained about the limited menu or the gaps in service. The ranks of food delivery workers, who are also mainly immigrants, swelled, but they earned low wages, worked long and uncertain hours, and were often deprived of their earnings by employers and shortchanged on tips by customers (de Freytas‑Tamura 2020).
Owners of food businesses, from bodegas to tortilla factories and from bagel shops to bistros, also struggled to adapt to pandemic conditions. At one extreme, a Michelin-starred sushi restaurant on the Upper East Side pivoted from a $300-per-person omakase menu to a less expensive takeout selection and opened a fish market next door. The “appetizing” shop Russ and Daughters, a hundred-year-old purveyor of smoked fish, closed their small shop on the Lower East Side but continued to ship online orders from their 18,000-square-foot baking and processing space at the Brooklyn Navy Yard. Smaller food processors initiated or accelerated online sales. But they had to hire more and often different types of employees and manage new marketing strategies. Many, unable to contend with the onslaught of problems, just closed their doors.
© Sharon Zukin.
New York food processors generally operate on a very small scale, with fewer than 10 employees, but they are usually local owners and employ a resident work force. Even before the pandemic, they faced dramatically rising rents. When the pandemic struck, food processors were allowed to keep their businesses open because the state government deemed them “essential.” But many lost customers, struggled to find new suppliers, and couldn’t pay the rent. They had to replace sick workers, or make do with fewer of them, and reorganize production around social distancing. If their usual distribution channels, such as restaurants, outdoor food markets, and small retail shops, closed, they had to devise alternatives, like contactless deliveries, and staff them or contract them out to businesses like DoorDash, often at rates as high as 30% of the price of each order. Recently the city council capped these fees at 15%, but the law will expire in 2022 (Fertig 2021).
While emergency loans from the federal government helped some small-business owners, many had trouble even applying. The New York State legislature passed an eviction moratorium for small businesses with fewer than 50 employees that could document pandemic-related hardship, and extended it twice, but business owners pleaded for still more time. Meanwhile, landlords constantly pressed the legislature and courts to end it.
Even before the pandemic, New York food manufacturers were already in a vulnerable position. Most are small businesses with small-batch or artisanal, low-tech production; they rent commercial kitchen space—when they can find it—in old factory buildings. The majority specialize in baked goods and specialty products, including everyday as well as “ethnic” and “trendy” foods. Some food startup founders are professional chefs who begin by baking pastries and baguettes in their home kitchens and supplying them to restaurants or neighbors, but often they are first- or second-generation immigrants who reproduce their family’s traditional recipes, besides managing the business. Other food startups tweak specialty products like gluten-free muffins and nondairy “milk” to cater to a niche or a hyperlocal market.
These businesses may not be an essential link in the urban food-supply chain, but they are important to the city. After years of job loss across New York’s manufacturing sectors, food processing became the city’s largest industry in the last decade, surpassing the historically dominant apparel industry. Employment in food processing grew 27% between 2005 and 2015, from 13,929 to 17,682 jobs (Euchner 2016). Moreover, with low barriers to entry in terms of financial capital and education, food manufacturing offers both access to business ownership and a career to people with few material resources. It gives less-educated women, especially from immigrant backgrounds, an opportunity to create economic value from traditional cultural skills, whether that means rolling tortillas, baking burek, or preserving spicy pickled achar. Food startup founders often hire workers from vulnerable and low-income groups, which increases their social impact on the city.
Other founders are college graduates from middle-class backgrounds, the proverbial “hipster pickle-makers in Brooklyn,” who hire workers with middle-class backgrounds like themselves. Still others are amateur bakers who live in public housing and yearn to start a business, restaurant chefs who need to supplement their earnings, or white-collar and professional workers who have lost their job. In the wake of the 2008 economic crisis, between 2010 and 2015, some 525 food startups opened in New York (Becker and Durmashkin 2015; Euchner 2016). Likewise, pandemic-induced layoffs have spurred many kitchen workers to start their own food business (Wilson 2020).
This is a much smaller category than the city’s estimated 9,000 tech startups. Like tech startups, though, half of food startups fail within the first five years (Becker and Durmashkin 2015), and for similar reasons: lack of capital, marketing failures, and inability to scale. More than tech startups, which can often locate in a coworking space, an incubator, or an accelerator, food startups have a hard time with real estate (Schrock et al. 2018). They need well-equipped, commercial kitchens in manufacturing zones that meet local safety regulations, but such space is rare in New York, and rents are high. Moreover, employees in the same food business can’t be “distributed”; they must coordinate together in the kitchen, which became difficult during the Covid‑19 pandemic. Unlike larger-scale, plant-based food processors like Beyond Meat and Oatly, and delivery services like Instacart, whose business—and market valuation—boomed during the pandemic, New York’s food startups have generally not attracted investors—unless they are tech-enabled food preparation and delivery apps like Blue Apron (publicly owned since 2017) or high-tech indoor farms like Farmshelf (still backed by venture capital).
Nevertheless, the product mix in New York’s food and beverage industry shows continual innovation. Healthy-eating trends, food journalism, and rich consumers propel some new foods’ success while other products, like French-born, New York–based baker Dominique Ansel’s famous cronut, a hybrid of a croissant and a doughnut that was named one of Time magazine’s best inventions of the year in 2013 (Lagrave 2016), owe their market power to social media. These processes are surely more extreme in a city like New York because of its centrality in media, investment, and cultural innovation networks.
Although the three articles in this dossier represent different parts of New York’s food industry, they illustrate common problems of adaptation to the Covid‑19 pandemic. Thomas Chung looks at owners and workers in third-wave coffee shops that have become a vital element in the city’s tech and cultural ecosystems. Nga Than interviews aspirational food startup founders who make bagels, candy, and organic limeade, and visits a shared commercial kitchen that prepares immigrant women for jobs in the food industry. Ivana Mellers speaks with the organizers of two of the city’s three major outdoor “destination” food markets, where, before the pandemic, vendors prepared and sold foods to weekend crowds of tourists and local visitors. These different sites show the deep wound inflicted by Covid‑19 on both the city’s economy and its public culture. Adaptation has been difficult, still requires governmental support, and poses many questions about the urban future.
Articles in this dossier:
- Can the New Economy Survive without Coffee Shops (and Their Wi‑Fi)?, by Thomas R. Chung
- Between Two Crises: New York’s Artisanal Food Startup Founders, by Nga Than
- Covid-19 Transformed New York’s Destination Food Markets, by Ivana Mellers
Bibliography
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- de Freytas-Tamura, K. 2020. “Food Delivery Apps Are Booming. Their Workers Are Often Struggling”, New York Times, 30 November, updated 9 December. Available online at the following URL: www.nytimes.com/2020/11/30/nyregion/bike-delivery-workers-covid-pandemic.html.
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- New York State Comptroller. 2020. The Restaurant Industry in New York City: Tracking the Recovery, Report 4‑2021, September. Available online at the following URL: www.osc.state.ny.us/files/reports/osdc/pdf/nyc-restaurant-industry-final.pdf.
- Schrock, G., Doussard, M., Wolf-Powers, L., Marotta, S. and Eisenburger, M. 2019. “Appetite for Growth: Challenges to Scale for Food and Beverage Makers in Three US Cities”, Economic Development Quarterly, vol. 33, no. 1, pp. 39–50.
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