Why do we love eating out?
Restaurants offer us something special, a break from the ordinary. Those that truly stand out—those we flock to for romantic or celebratory occasions—are special not only because of superior business savvy, but also because everything in them, from the silverware to the soup, represents a labor of love.
After all, just as every couple has its love story, so does every restaurant. Andina, which offers award-winning Peruvian cuisine in Portland’s Pearl District, has a love story that dates back decades before its founding. It starts with the love between an Oregonian man and a Peruvian woman; continues with their son, Peter Platt, and his love for Peruvian culture; and culminates with Andina, born out of serendipity, strategy, and yes, love.
Here, Peter shares Andina’s love story, including the entrepreneurial journey that led to its founding and the lessons he’s learned about what it takes to survive in an industry known for fierce competition and slim profit margins.
What was the spark that inspired the birth of Andina?
The story of Andina is really the story of my family, and like a lot of entrepreneurial stories, it has a combination of both serendipity and strategy. It starts really with the happy accident of my parents meeting in Peru. My dad is an Oregonian, third generation, grew up in Portland, joined the Peace Corps, and ended up falling in love with the country and staying 12 years. He met my mother, they got married, had a few kids, myself included, and moved back to Corvallis, where my dad got his engineering degree. That’s where I grew up.
Like a lot of mixed ethnic immigrant families, I grew up in an environment where we spoke Spanish and ate Peruvian food at home, which was kind of an island in this larger sea of “normality.” A couple of things were planted at that age that factored into my entrepreneurial development—one was this need to try to integrate these two sides — my family and my own history, which is sort of a puzzle that I’ve always been trying to work out. And the second was a deep, deep appreciation for what Peru was and represented, and what it could share with the rest of the world.
How did you decide that food would be your vehicle for sharing Peru with the rest of the world?
I majored in anthropology in college, and I came out my college experience thinking I would go on international development. Appropriately enough, I came to Mercy Corps, which is really where the story of Andina starts. Like a lot of entrepreneurs, I didn’t go through the formal application process with Mercy Corps, I basically talked my way into a job as an assessment coordinator in Peru, working on new project development there. Again, serendipitously, because Mercy Corps didn’t have any programs at the time in Peru, I had to find my own funding. I got in touch with a Mercy Corps donor who was a Peruvian businessman, Jaime Saavedra, and he became a close friend and my fiscal sponsor.
Eventually, Jaime became my business partner. When I came back from Peru, I was looking for things to do, and I didn’t know what my next step would be. Jaime pulled me aside and said, “I have this crazy idea and I want you to help me with it. I want to open a Peruvian restaurant in Portland.” I thought he was nuts, but then I thought back to my family history and I realized, well this is actually an interesting opportunity. This could be a way to create a platform to explore all the different facets of my own personal life that I’ve been wanting to try and resolve in some ways. It was a great way for the family to portray its culture, to find a way to through cuisine tell the story, to open the door into the wild and wonderful world of Peru. And so we went forward.
We made every mistake in the book, quite honestly. I mean, if there was a mistake to be made, we made it.” (Tweet this.)
How did you break into a sector you knew virtually nothing about?
Like any process, it was highly iterative. First, we needed a chef. As luck would have it, Mercy Corps’ direct supervisor at the time for my program was an old hand from Peru and had dated a Peruvian guy whose nephews were chefs. One of them was looking for a job. So I called him up and said, “Have you ever been to Portland, Oregon?” He had no idea where it was. He came out here of course in the summer, when it was beautiful, and he fell in love with the town. He brought his young wife with him, my mother charmed them and made them feel at home, and he was like, “Let’s do it, you know, let’s open a restaurant.”
So we had a chef, we had an experienced business person/manager who was the money person, and there was me, this young rookie basically willing to do whatever it takes for very little pay. We also hired a consultant, someone to basically shore up our lack of experience. So it was a very cobbled-together team, a very unlikely team, but we had the basic ingredients to bake this cake.
What early challenges did you face, and how did you overcome them?
We made every mistake in the book, quite honestly. I mean, if there was a mistake to be made, we made it. We survived that arduous startup process due to a variety of different factors. There’s always luck, there is hard work of course, and the willingness to work insane hours for next to nothing. There was good food, good service—you’ve gotta have those two ingredients, which improved over time. There was a sense of dedication to the mission. Most important was that we had a family, a committed family of individuals who were willing to work, and work very hard, and to do things that weren’t necessarily rational, in terms of the calculation of return.
How has Andina grown in the last 10 years? What’s on the horizon?
We’ve built a strong private dining business, which is a huge part, the fastest-growing part of our business in fact. By necessity we had to build a proprietary supply chain out of Peru because we couldn’t find the ingredients here, not in the quality or the quantity that we needed to run a large-scale operation. So we have direct relations with farmers down in Peru, which is another avenue for growth. You can add value to that. And we’ve also develop a strong local brand, with a strong set of loyal and understanding customers, and a great management team, which is an asset that we can capitalize on.
We have opportunities to grow and really, it’s an exciting phase for us to be in. There’s been Andina 1.0, and now we’re looking for that strategy about this next phase of growth. What we’re trying to do now with Andina is to develop it into a social enterprise.
What unique challenges and opportunities does the restaurant industry offer?
Restaurants are a vital part of the entrepreneurial landscape. They’re a major stepping stone, in particular for minority entrepreneurs getting into the business. A lot of immigrant families come here with a particular skill set that may not immediately transfer into a job. Restaurants represent a real opportunity for them to actually be their own boss.
But restaurants are not an easy business. There are good reasons why they don’t necessarily attract venture capital, for example. They are incredibly low-margin and very high-risk, with intense competition and very high labor costs. It’s basically a fixed cost business with a sales drop, if you want to think about that way. Operationally, they’re also very difficult to manage because they’re two businesses basically squished together. One is a light manufacturing enterprise, where raw product comes in, you break it down and package it and move it off the line. The other is a personal valet service. Making these two sides actually fit together can be a daily challenge.
Authenticity is really a form of competitive advantage. It’s a way that you can tell your story better.” (Tweet this.)
What advice do you have for aspiring entrepreneurs in your sector when it comes to differentiating yourself from the competition?
Authenticity is really a form of competitive advantage. It’s a way that you can tell your story better. It puts pressure on creating a coherent and believable narrative. I think the shift in the landscape now towards prizing authenticity is really a major shift in support of minorities in ethnic communities—if they can find a means to translate an authentic cultural story through a branded product or service for a broader audience.
At OEN, we focus primarily on supporting high-growth, scalable businesses. How does the concept of scalability apply in the restaurant industry?
The growth path for most restaurants is to develop a concept, franchise it, and basically externalize the costs of expansion to the franchisee. But even that path of growth is at the mercy of the credit markets because franchisees have to get their own financing. The other path to growth—and only a few enterprises actually become successful this way, Chipotle being one example—is to develop a concept that seems to hit on all the right themes and trends at the moment, then really capitalize on them. In the beginning, you have to be very smart and judicious about your menu, keep it small, keep it selective, keep it high-end, price it at a premium, and then you get to a certain scale where you can attract private equity and they come in and help you ramp up. Chipotle is wildly successful, I think their current market caps at about 11 billion dollars, and they started out as a burrito shack in Boulder, Co. It’s an amazing story.
Why are restaurants important?
When we talk about food, particularly in this foodie city, what we’re really talking about is community. Food represents and is a powerful symbol for things that that we need in our daily lives. It symbolizes nature, connection back to our rural heritage, and ultimately our sense of place in this ecosystem that we live in. And because food is a symbol, restaurants have a vital role to play in giving food back its symbolic power. They de-commoditize food, that’s what restaurants do, they give us this context in which to appreciate it and develop a more nuanced and sophisticated relationship to it.