By Elizabeth Swift, Bridge Bank[dropcap]W[/dropcap]arm, crispy, and filled with memories of home and family, the grilled cheese is a classic American sandwich, and Nate Pollak and Heidi Gibson—cofounders of the American Grilled Cheese Kitchen—have a classic American story on how they came to cultivate both a culinary passion and a loyal following.
In 2008, they were both out of work. Nate had lost his job as a management consultant, and Heidi was laid off from her software company. Fortunately, these two had creativity, tenacity, business acumen, and perhaps most important, passion. This meant it wasn’t long before they were onto a great idea.
It started with Heidi, actually. An MIT graduate with an MS in materials engineering, she takes her culinary endeavors seriously. To her, the grilled cheese sandwich isn’t just melted cheese on bread; it’s a complex amalgamation of many flavors and textures that, when executed properly, brings an absolute delight to the senses. She took this humble lunch item so seriously, in fact, that she began registering in grilled cheese competitions (yep, they exist!) to create not just a decent grilled cheese sandwich but the very best one. She won the “Grilled Cheese Invitational” seven years in a row. This woman was definitely onto something.
In 2010, she and her husband Nate liquidated their 401(k)s to open their first restaurant, the American Grilled Cheese Kitchen, in the South Park area of San Francisco. Today, that restaurant grosses more than $1,000 per square foot in revenues and has a staff of 17. They also have another thriving location in the Financial District on Battery Street. That location has been open nearly two years and has a brisk breakfast and lunch business as well.
As Nate explained to me on a recent rainy Monday morning, there have been many lessons along the way. Above all, focus on the product, he says. This was the crucial error of their chief competitor, the Melt, which had to shut down several locations and whose focus is now cheeseburgers, not grilled cheese. Nate and Heidi have stayed true to their focus and use only the best local cheeses, meats, produce, and breads. For them, there is simply no compromise on quality.
The second lesson is to treat your staff well, and in return you will be repaid with hard work and loyalty. Nate and Heidi provide full benefits for staff, something not all fine-dining restaurants offer and even fewer fast-casual restaurants do.
Third on the list—not surprising to us real estate folks—is location, location, location. Nate and Heidi’s second location in the Mission (which is where they lived at the time) turned out to be a poor choice. Why? The Mission is an evening destination, not a breakfast one. But they took that lesson and opened Battery Street, where they now enjoy a steady stream of daytime grilled cheese devotees—architects, media strategists, software engineers, financiers, and other inhabitants of the North Financial District. Nate and Heidi are also now looking eastward to see if those on the other side of the Bay share their passion. (Note to you retail brokers out there: Nate and Heidi are looking for 1,200 square feet in Oakland and don’t need a hood.)
Why Oakland? The same reason why so many other companies and people are moving there: San Francisco is a tough spot to earn a living. All costs are higher in San Francisco: real estate, labor, insurance, and food. Pile on top of that San Franciscans’ predilections for convenience, employers’ desires to keep their staff working as many hours as possible by creating in-house cafeterias, and the general outsourcing of everything, and the result is fewer people walking down the street, sitting in restaurants, and communicating face-to-face.
As Nate explained, “A fundamental connection is being lost between restauranteurs and their clientele—the tactile and emotional connections that come from a cook creating food in a kitchen and serving it to a customer on a plate. Both of those people have names, perspectives, and histories, and the food ‘experience’ that connects them is evaporating, like the steam above a pot of boiling water.”
This is the connection that Nate, Heidi, and their staff crave, and one they are intent upon preserving. “We’re not an online business,” like Blue Apron or Munchery. Indeed, a sign at the Battery Street location says, “Our Mission: To GET a SMILE through the MAGIC of GRILLED CHEESE.” So go in, order something, sit down, and take a bite. You’ll see what Nate and Heidi are talking about.
Elizabeth Swift began her commercial real estate career as a broker in Washington, DC. After earning an MA and PhD in American studies, she landed in the Bay Area in 2006. Since that time, she has worked at several banks and is now at Bridge Bank, where she specializes in construction lending, from $5 million to $50 million. She is immediate past president of CREW East Bay and is a board member of Rebuilding Together Oakland-East Bay.
This article will also appear in The VIEW, the quarterly publication jointly curated by the three Bay Area chapters of Commercial Real Estate Women (CREW)—CREW San Francisco, CREW East Bay, and CREW Silicon Valley. CREW is a nationwide business networking organization dedicated to the advancement of women in commercial real estate. For chapter news, events, and membership information, visit the Bay Area member organization websites at crewsf.org, creweastbay.org, and crewsv.org.