Food Arts presents the April 1995 Silver Spoon Award for sterling performance to Max Pine for his continuing role in bringing an educated business outlook to the restaurant industry.
Pine is now pioneering new trails in venture capital, serving as special partner at Patricof & Co., an international financial firm based in New York City. "As far as I know, I'm the only restaurant industry professional who works for a venture capital firm," he says. "The restaurant business has not been an area that attracted much venture capital in the past. I'm helping to make it happen as fast as I can." His role: to identify and evaluate opportunities for equity investment in restaurants and food-related fields. And on the investment banking side, to match clients with restaurant businesses for sale. An inveterate traveler, Pine's perspective is global. "Fast food does well almost everywhere, but there are very few American casual dining concepts in other countries. Europe is the biggest opportunity. Australia is also a good market—receptive but not too big—as are Canada and Mexico."
Until now, Pine was best known for the quarter century he spent with Restaurant Associates (RA), twelve of those years as president and the last five as CEO. He streamlined RA's business by divesting it of companies that made no strategic sense and expanded it into the realm of casual dining chains, contract foodservice (particularly in the performing arts sector), and the top echelons of executive dining with the Sony corporation at the pinnacle. During his tenure, RA's sales volume increased approximately fivefold, to $275 million.
Pine is the first to point out that he is not a restaurateur per se. "I couldn't conceptualize a restaurant," he says. He speaks with admiration of his predecessor, Joseph Baum, who guided RA during its initial years when the company was celebrated for creating great New York theme restaurants such as the Four Seasons and the Forum of the Twelve Caesars, and his successor, Nick Valenti, who developed Tropica, The SeaGrill, and Cafe Centro.
But Pine is a bottom-line man who likes to eat. "I could eat out eight nights a week," he says with genuine enthusiasm. "I love the restaurant experience. I don't cook, but I know what's good and what's not."
Pine became a businessman by design and a foodie by accident. "When I was at Harvard getting my MBA, I met up with some people who liked to eat, and I got hooked," he explains. Then, after a three-year stint with the State Department in South America, he just happened to take a job with a contract foodservice company. "And then I decided to work for what was then the best restaurant company—RA. It turned out to be an ideal career for me."
Pine, who joined Patricof in 1994, says he is searching for "companies that have attractive concepts, sound unit economics, excellent management teams, and the potential to grow into major businesses." The category he targets is casual dining. "I believe today's customer is looking for something distinctive—freshly prepared, high-quality food," Pine says. "We're not looking at McDonald's, nor are we looking at '21'. But there's some point in between where upscale and downscale meet."
He believes the phenomenal success of Starbucks demonstrates people are willing to pay higher prices for quality. "This should apply to hamburgers or any other food item," Pine says. "We're looking for something mainstream, not trendy. We don't want to be the first chain of Mongolian hot pot restaurants. You can have the same food items other people offer, but you must have the best quality, the best service, and the best ambience.
"In order to be successful, a company has to be creative, hospitality-oriented, and financially disciplined," he says. "But if we don't like the food, we're not going to invest."