Dining is rapidly becoming a cashless experience. Last year, 81 percent of the money spent at full-service restaurants in America was charged to debit, credit or pre-paid cards, up from 72 percent in 2006 and 66 percent in 2004. At quick-service restaurants, many of which only started taking cards in the early 2000s, just 37 percent of sales were charged in 2012, but the trend toward plastic is the same. At the same time, customers’ insistence that restaurants take cards has allowed companies like Visa, MasterCard and American Express to charge ever-higher merchant fees, leading some restaurant owners to question the value of plastic. These fees often range from 2 percent to 3.5 percent of the bill — a significant chunk to a restaurateur running a business with a profit margin in the mid-single digits
“Retail is such a weird animal. Sometimes people will stock the syrups because they love the labels, and they never taste them,” he says, “Restaurant people don’t care what it looks like, just what it tastes like.” There’s a full list on their site, but Nocito confesses to a favorite: “The Modern is just killing it with a hibiscus cocktail they have.” The company has been working with a distributor for its northeast retail business, which requires producing large volumes of product and adjusting to a tighter margin, since they’re now selling to someone who has to make their own profit on the product. And if the distributor goes out of business, you can lose a lot. When this happened to P&H, they lost some product; friends who used the same distributor lost more than $40,000. Nocito is still doing all of the production himself, despite the increased volume. “Once you go to a co-packer, the quality really goes down,” he explains. Plus, soda syrup is pretty easy to scale up as recipes go. “If you were using three pounds of hibiscus, you’ll be using 30 pounds,” he says, “And a bigger kettle.”
California’s bill restricts what types of foods are allowed to be produced and sold from home. Entrepreneurs are also required to attend trainings and adhere to label requirements, but the bill’s primary accomplishment—from the perspective of food entrepreneurs—is that renting costly commercial kitchens is no longer required: It’s now legal to sell food you make in your own kitchen.