Steamers revisited

Some of you may remember a review I did a while back on Digest, about a restaurant called Steamers. My review was, well, not so enthusiastic, and the discussion in the comments was lively. To my great surprise, one of the commenters was the co-owner of Steamers, Nilesh Dayal. He disagreed with my review, politely but emphatically, and what's more, he wanted a chance to meet with me and win me over.

I was surprised - very surprised - that the owner of a restaurant would find my review, on a small website with readership in the dozens, at most. I was also slightly embarrassed. I'm no authority on anything. No one pays for my opinion. I only wrote the review because Mike asked me to. And, you know, it's a little awkward to be "caught" in the act of harshing on someone's work.

I was nervous to meet with Nilesh, but I knew that you, loyal readers, would expect me not to wimp out on you. So, on a sunny summer afternoon, I sat down with Nilesh to talk about his interest in entrepreneurship, his ambitions for Steamers, and, of course, his love of dumplings.

Nilesh's background is in business strategy, a career he describes as exciting but exhausting - he knew he was headed for burnout when, in one year, he traveled 215,000 miles and spent 140 nights in hotel rooms. Beyond that, he feels there's a "difference between coaching and doing," and he always knew that his calling was for doing. His traveling years also introduced him to another passion, one that became pivotal as he decided what entrepreneurial venture he would choose: the love of dumplings.

He had already realized that Americans are, slowly but surely, turning their backs on fast food. The days when an executive might dash out for, say, a burger and fries for lunch are on the decline. The fast food market, and a large part of its former customers, are ready to grow up: customers are looking for food that's healthier, more interesting, presented better...but they still want the quick service they've come to expect from fast food.

There's an industry name for this market niche: Fast Casual. It's the fastest-growing restaurant niche, and often they have a low-profile fast food parent company: Baja Fresh (owned by Wendy's), Chipotle (from Mcdonald's), Au Bon Pain, and even our home-grown Noodlin' (owned by the same parent company as Burgerville). Food is served quickly, is healthier than most burger chains (or at least makes you think so), the restaurant looks nicer, and customers are willing to pay more for this upgraded experience: the average ticket comes to $6-8 per person. (Snarkier commentators have called this industry "adult fast food.")

Furthermore, these national chains have not entered Portland at nearly the same rate of other cities, mainly because of Oregon's labor laws. In Oregon, employers must pay food service workers minimum wage, raising labor costs significantly over other markets. Here's where Nilesh and his friend and colleage, Steamers co-owner Eddie Cheng, saw their opportunity to "take dim sum to the next level."

Nilesh also realized that while Asian and Mexican food used to be exotic culinary outings, they've now transcended the "ethnic" market sector and become part of what everyday Americans eat. Dumplings and tea don't fall into that category, or at least not yet. Yet what Nilesh saw in Taiwan was that they're a staple food for lunch and snacks: easy to eat, quick, inexpensive and tasty, and thanks to high demand, they're available in countless varieties on any street corner. If Steamers achieves its vision, dumplings and tea will join burritos and bento as food Americans eat all the time.

Portland is an ideal place for Steamers to start, explains Nilesh, for several reasons, not least of which is that both founders live here. Most importantly, because Portland is behind the national curve in this kind of restaurant, they can take more risks and spend some time experimenting. In Nilesh's words, if they were trying to launch in a saturated market like San Francisco, "if we screwed up, someone would beat us at the game." They also feel that, compared to other west coast cities, Portland offers them a demographic that's more like the average American city in terms of income level, education, and, of course, "ethnicity."

You don't have to talk to Nilesh very long to figure out that he's ambitious; he'll tell you right away that "we hope to be big someday." Big means competing with the fast casual heavy hitters, which means that their current downtown location is just the first of many. That's going to mean more resources, and Nilesh is already on the look-out for investors or other business partners to join him in going big time.

They won't be ready for that step, though, until they perfect their formula; Nilesh says that, "in my mind, I don't think we've proven anything yet." Nilesh and Eddie are willing, even eager, to make improvements to Steamers. They've already changed their menu based on customer feedback (which they measure by comments, which they solicit at every turn, and also by observing what does and doesn't sell). As a result, they've expanded their menu significantly beyond dumplings to include salad rolls, Vietnamese sandwiches, noodle salads, and other pan-asian treats; they've also removed some items which weren't popular, like ground chicken filling, and changed their dumpling wrapper dough to keep it from tearing. Nilesh also feels like they did already "screw up on [the] initial branding" by not emphasizing the tea part of their business enough. Tea is a fast-growing beverage sector, can provide a reason to visit during off-peak hours, and appeals to women, who form two-thirds of Steamers' customers.

Though he specifically wants to be a player in "multiple markets and multiple demographic settings," the inevitable next step for Steamers is out from their current lunch-crowd downtown setting: "ultimately, I need to be in the suburbs." That's why they're considering a move that may raise eyebrows: next time you visit the food court in your local mall, you may see Steamers joining the competition. Nilesh explains, "it isn't the most glamorous setting, but the high volume would do a couple of things": raise the Steamers brand profile quickly, allow them to tweak the menu with quick turnaround, and, of course, improve cash flow.

In the end, the key factors determining the success of Steamers is whether or not the 'dumplings and tea' concept is sticky enough: Is it a broad enough concept? Are Americans ready to accept dumplings as an everyday food category? Does it bring people back for regular return visits? You can see the sparkle in Nilesh's eye when he says that he'd welcome a competitor to validate the category.

Steamers is, to my mind, the ultimate fast casual experience: their responsiveness, customer service standards, high-design interiors, and food variety and preparation are probably the highest you can get for the price and concept. Nilesh's aims are even higher, though; he says that he wants to compare favorably beyond just the fast casual sector. That is, he wants me to be a satisfied customer.

Is that possible? To my mind, the thing about fast casual food is that it's firmly rooted in the common denominator. In order to be a successful regional or national chain, you have to distinguish yourself from the competition, yet be as accessible as possible to, well, nearly everyone. It's pretty clear that I'll never be a candidate for the fast casual demographic. I belong to an organic farm cooperative. I love the experience of trying new foods and ingredients. My kitchen shelves are filled with plastic tubs of unpronounceable ethnic food ingredients. I love to cook and eat food outside of my culinary comfort zone.

Nevertheless, if there's anyone whose hard work and flexibility can win me over, it's Nilesh Dayal. In my review, I said I wouldn't be going back to Steamers, but I've changed my mind. See you over dumplings and tea, Nilesh. Oh, and over your delicious coconut and pandan humbao.