After celebrating its 10th anniversary, Alinea continues to dominate the fine dining scene in Chicago and the rest of the world. The three Michelin star restaurant was named the 25th best restaurant in the world in 2015 and won 1st place in the first annual World’s 50 Best Restaurants People’s Poll. Maintaining such a stellar reputation takes much more than delicious and innovative food. Their success has stemmed from creating a unique customer journey from booking a table to leaving the restaurant.
Business and Operating Model
The business model of Alinea, like most restaurants, is simple. Executive chef and co-owner Grant Achatz says his “core thoughts on the guest experience and cuisine can be summed up more simply than one might imagine: Fun and Delicious.” The core of Alinea’s business model is to provide high quality, innovative food and an experience that redefines traditional fine dining.
The key components of Alinea’s operating model that allow Achatz and his team to deliver a top-notch fun and delicious experience consistent with their business model are its homegrown ticketing system and its dedication to a thoroughly developed and dynamic tasting menu.
Innovative Ticketing System
The most innovative component of Alinea’s operating model isn’t in its food preparation or delivery, but its reservation system. Achatz and his team developed a proprietary, dynamic ticketing system that requires customers to book a table online and pay for the meal in full at the time of purchase (often months in advance of the actual meal).
The booking process instantaneously became much more fluid and transparent from a customer experience perspective, as they no longer listen to a busy signal and call multiple times to get through only to be denied a table. Customers also now thoroughly enjoy a meal without facing a fat bill at the end (the Alinea experience is $210-$295 per person for the mandatory tasting menu, excluding beverages).
Operationally, the ticketing system provides substantial benefits that support its business model quite well:
- Perhaps most importantly, ticketing eliminates no-shows which historically cost the restaurant ~$250K per year. The no-show rate is now less than 1.5%
- Alinea previously had several full-time employees answering hundreds of reservation inquiries at a cost of ~$150K per year
- Ticketing communicates exactly how many diners it will serve months in advance, helping control food waste and enabling efficient procurement
- Ticket prices are variable depending on the day and time of reservations, helping to maximize revenue and eliminate empty Monday night tables common at even the best restaurants
- Reservations in the system are not taken for an odd number of people. Tables are designed to seat 2, 4 or 6 people and are never rearranged or changed, eliminating empty seats
The new ticketing system frees up significant capital and resources to focus on optimizing a creative dining experience which is key to Alinea’s business model—after implementing the system EBITDA increased 38% over prior years. They also now control and optimize the customer experience, rather than rely on third party technology. Due to its success, the innovative ticketing system was was valued at $20 million as of late 2014 and spun out as a separate company called Tock in 2015. It is now used by some of the most highly regarded restaurants in the country.
Tasting Menu / Research & Development
In addition to its innovative technology, Alinea’s tasting menu model is consistent with its goal to provide a fun and adventurous experience and enhances the restaurant’s efficiency. With a multi-course menu that changes only a few times a year, Alinea is able to hone in on perfecting its static dishes and minimizes variability and chaos in the kitchen. The pre-determined menu allows the restaurant to maximize creativity and fun – from custom plates and glassware to a helium filled apple taffy balloon for dessert, the diner feels as if they are at a show rather than a restaurant and each table receives a standardized, unforgettable experience.
Alinea’s vast human resources are extremely unique for a restaurant as well, enabling its one-of-a-kind technology and menus. A former Google engineer and ~200 employees support the 24 table restaurant in order to optimize the creativity and innovation that is the backbone of the adventurous and enjoyable customer journey.
The Future – How Sustainable?
While Alinea’s business and operating models are tightly aligned to optimize the guest experience and offer a truly differentiated experience, they arguably lack anything that could not eventually be replicated by others (as mentioned above, they are already providing the ticketing system to others). Only time will tell, but Grant Achatz and Alinea have continuously innovated their operating model to provide diners with a fun and delicious experience that is one step ahead of its fine dining peers.