Organic ingredients make up 80% of the menu; green restaurant Xia Mi struggles for six years before turning a profit

The soon-to-be 6-year-old Xia Mi plant-based restaurant uses 80-90% organic and eco-friendly ingredients, with domestically produced ingredients reaching 95%. At this June's International Green Catering Seminar, it was ranked first in an evaluation by the UK's Sustainable Restaurant Association, making it a model green restaurant domestically. However, due to the high cost of ingredients, it ran at a loss for six years straight. The operator, after painful reflection, took a multi-pronged approach by reviewing ingredient waste rates, developing new menus and services, and finally turned a profit this year. How do they reduce costs without shortchanging farmers, employees and consumers? Let's look at Xia Mi's approach to management.

From investor to operator, introducing corporate management methods

Located near Taipei's 228 Memorial Park, Xia Mi plant-based restaurant has been operating since November 2013. The restaurant uses organic and eco-friendly ingredients, and its seasonings include non-GMO traditionally brewed soy sauce, as well as fair trade pepper, curry powder and other spices, with no chemical additives. Apart from a small amount of olive oil and pasta sourced from abroad, everything else supports domestic crops through contract farming.

Current CEO Wang Shuzhen was formerly a medical technologist with extensive management experience, and was originally one of Xia Mi plant-based restaurant's investors. Since taking over as CEO in 2017, she has continued to improve on the existing foundation. She applied some of her past corporate management methods to the restaurant, and the farmers and colleagues were initially unaccustomed to it. She laughed and said: "As soon as I arrived, everyone said I was so strict."

In the past, the concept of green dining was not yet widespread, and running Xia Mi plant-based restaurant was not easy. After transitioning from investor to operator, Wang Shuzhen found that running Xia Mi was far more difficult than running a company had been. "I once thought about shutting it down, but when I thought about what Xia Mi means for green dining and organic agriculture, I decided to keep going." So she made adjustments to how Xia Mi was run.

Review: Serious losses in ingredient transport, poor management also causes waste

Speaking of the difficulties of running a green restaurant, Wang Shuzhen enumerated them: staggering fixed expenses for rent, staff and hardware; poor in-store workflow; high ingredient costs and serious waste. "We encountered every problem a normal restaurant would have, but in the past our ingredients were too expensive, and not tasty enough." She smiled wryly.

The average ingredient cost in the general food service industry is about 30% of each dish's price, while Xia Mi's ingredient costs in the past were much higher. Wang Shuzhen explained that the restaurant buys directly from farmers, and its produce comes from counties and cities across the country, but ingredient waste was severe, with nearly 15-20% of purchased ingredients unusable.

The waste mainly comes from transport. To save shipping space, farmers packed produce of different firmness into the same box, and the ingredients were bruised and damaged during transport, which also shortened their shelf life. In addition, improper ingredient management caused waste. Wang Shuzhen said: "Sometimes your fridge at home has vegetables you bought but never cooked, and restaurants have that too."

Visiting partners to hunt for treasures, communicating a new model

Xia Mi's ingredient selection must meet the "three noes": no pesticides, no herbicides, no ripening agents. The first step of improvement was to start with the ingredients. Wang Shuzhen identified the higher expense items from the accounts and visited the production areas one by one. "These farmers and suppliers are practically our regular lineup, yet some had never once come to eat at Xia Mi." After going to the production areas, she had many unexpected gains.

"In the past we always bought product A, but when we went to the production areas we discovered product B was more suitable for cooking." Besides ingredients, Wang Shuzhen also communicated with farmers about ingredient transport and interaction. Even in the same box, firm and soft items must be separated, and photos must be taken before shipping. After the restaurant receives them, it immediately cuts them open to confirm their condition, so that if there is shipping damage, there is a clear basis for a claim.

More things needed to be confirmed in communication, but the time required became less. Wang Shuzhen switched produce management to scheduled, fixed-quantity purchasing. For example, a farmer ships a specific number of kilograms of rice every Tuesday at 2 p.m., and only makes adjustments under special circumstances.

100% ingredient utilisation, new twists on food-waste reduction

Although rules were set, Wang Shuzhen also gives farmers flexibility: "Ugly ingredients, ones too big or too small, as long as they aren't spoiled, can all be sent." The lower-priced off-grade produce takes more time to process, but she also maximises ingredient utilisation.

Walking into the kitchen, coworkers are handling just-delivered baby corn and beetroot, peeling off the outer leaves and corn silk, and cutting off the outer skin into one pot. "These will be used to make stock next, and the flavour will be more layered." Wang Shuzhen explained. And for ingredients sold in the store, if they are nearing their best-by date, they are also used in dishes. Currently the restaurant's ingredient loss and waste is close to zero.

With scheduled, fixed-quantity purchasing of produce, Xia Mi plant-based restaurant, to speed up turnover and use up ingredient trimmings, holds occasional hands-on cooking classes so more people can learn about ingredients and their uses. It has also developed other products, such as papaya pound cake and dragon fruit cheesecake, as seasonal limited-edition items.