The Business of Butterworth's, the Hottest New Restaurant in Washington DC
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this episode of Odd Lots, hosts Joe Weisenthal and Tracy Alloway speak with Bart Hutchins, chef-owner of Butterworth's restaurant in Washington DC. (02:26) The conversation explores the unique intersection of politics, business, and cuisine in DC's restaurant scene. Hutchins shares insights on sourcing ingredients from Amish and Mennonite farmers, the challenges of running a restaurant post-COVID, and how Butterworth's became known as a "MAGA hangout" due to its political clientele including Steve Bannon and Marco Rubio. (05:46) The discussion covers everything from supply chain logistics and labor shortages to the economics of restaurant operations and the cultural dynamics that shape DC's dining landscape.
- Main themes include post-COVID restaurant economics, farm-to-table sourcing, political branding in hospitality, labor market challenges, and the intersection of food culture with economic cycles
Speakers
Joe Weisenthal
Co-host of the Odd Lots podcast and editor at Bloomberg. He covers financial markets, economic policy, and macroeconomic trends with a focus on making complex economic concepts accessible to a broad audience.
Tracy Alloway
Co-host of the Odd Lots podcast and Bloomberg reporter covering commodities, supply chains, and market infrastructure. She brings expertise in understanding how physical markets intersect with financial systems.
Bart Hutchins
Chef-owner of Butterworth's restaurant in Washington DC. He has over a decade of experience working with Pennsylvania Amish and Mennonite farmers, previously owned Bucherts restaurant, and has developed expertise in farm-to-table cuisine and restaurant operations in the political capital.
Key Takeaways
Labor Hoarding as Survival Strategy
Hutchins revealed that his current kitchen staff consists of the exact same people who worked with him when COVID started, demonstrating a strategic approach to labor retention in an industry devastated by workforce departures. (45:30) This decision stemmed from witnessing other restaurants lose their trained staff and subsequently see their food quality plummet when forced to rely on untrained workers. The strategy requires significant investment in employee retention but pays dividends in maintaining operational excellence and avoiding the substantial costs and time required to train new staff, which can take up to a year for skilled positions like line cooks.
Supply Chain Localization for Cost Control
The restaurant sources ingredients directly from Amish and Mennonite farmers in Pennsylvania, with deliveries made by farmers themselves rather than through traditional distribution networks. (16:48) This approach emerged as both a quality decision and a necessity during supply chain disruptions when global commodity prices for items like fryer oil became prohibitively expensive. By buying whole animals and processing them in-house, Hutchins can access beef tallow for frying at a fraction of the cost of commercial oils, demonstrating how vertical integration can provide competitive advantages in volatile markets.
The Burger Paradox in Menu Strategy
Butterworth's deliberately avoids serving burgers despite their profitability because successful burger offerings create "audience capture" that prevents customers from trying other menu items. (13:02) Hutchins explained how his previous restaurant's acclaimed burger became so popular that it dominated sales, making it impossible to sell more creative dishes featuring game birds or unusual vegetables. This strategic choice sacrifices immediate revenue for long-term menu diversity and creative freedom, illustrating how restaurants must sometimes resist customer demand to maintain their culinary vision and business model.
Post-COVID Structural Changes Persist
The restaurant industry continues to grapple with permanent changes from the pandemic era, including a 15% decline in reservations year-over-year and the exodus of experienced front-of-house staff to other industries like real estate sales. (47:12) Cost inflation for basic ingredients has also never recovered, with some items requiring price increases of nearly 180% to maintain the same profit margins. These structural shifts have forced restaurants to operate with smaller staffs while paying significantly higher wages, fundamentally altering the economics of restaurant operations beyond just temporary pandemic effects.
Cultural Positioning as Competitive Advantage
In Washington DC's political environment, restaurants inevitably become associated with specific political clienteles, which Hutchins describes as a unique form of branding based on "who's in the dining room." (07:16) Rather than explicitly courting political customers, Butterworth's organic development of a conservative clientele through early patron networks became a differentiating factor in a crowded restaurant market. This phenomenon demonstrates how cultural and political associations can become valuable business assets, even when not deliberately cultivated, particularly in politically-charged environments like DC.
Statistics & Facts
- Restaurant reservations are down 15% year-over-year according to industry reports, reflecting broader economic pressures on discretionary spending in the hospitality sector. (48:08)
- Cook and dishwasher wages have doubled since pre-COVID, with DC minimum wage approaching $15/hour while restaurant staff now average $26-27/hour, representing a fundamental shift in restaurant labor economics. (32:28)
- French fries that cost $9 in 2019 would need to be priced at $25 today to maintain the same profit margins, though they're currently priced at $12, illustrating how restaurants have absorbed significant cost inflation. (21:03)
