December 2020

It is not surprising that one of the better-operated and most successful food halls in Europe, Foodhallen, is in Amsterdam – a ‘multi-culti’ city with a metro area population of 2.5 million and an estimated 19 mln annual tourists.  Success in the hospitality industry is 1% inspiration and 99% perspiration and, more often than not, the ‘inspiration’ is actually effective theft of intelligent ideas and on-trend evolutions within the industry.  The founders of Foodhallen are not embarrassed to admit that they stole their idea from the Mercado San Miguel market in Madrid.  Developers and operators of food halls should look to Amsterdam and, specifically, Foodhallen as a large source of inspiration for the evolution of this world-wide trend.

Foodhallen was opened in 2014 as part of the De Hallen (the Halls) project in the hip Oud-West neighborhood of Amsterdam.  Initially constructed in 1901, De Hallen is the renovation of the old tram parking and maintenance yard of Amsterdam.  It is a city-owned and city-initiated project – and a huge consumer success story.  In addition to Foodhallen, De Hallen also includes Hotel De Hallen (a boutique hotel), FilmHallen (you guessed it – a 9-screen cinema), Recycle (a vintage bike shop), the Maker Store (unique locally-produced products), Denim City (a denim studio and customized jeans factory), a working TV studio, beauty salon and Cafe Belcampo (an integrated book / coffee shop). 

Foodhallen is privately owned with competent, hands-on management – demonstrated by the 1mln annual local and out-of-town visitors who dine and drink in the well-designed hall.  The operating company owns/operates the bars within the project.  At our recent visit to Foodhallen, I ran into the Bar Manager whom I met during my first visit over three years ago.  This consistency of senior management shows through in consistently high-quality service of the venue.

Foodhallen is privately owned with competent, hands-on management – demonstrated by the 1mln annual local and out-of-town visitors who dine and drink in the well-designed hall.  The operating company owns/operates the bars within the project.  At our recent visit to Foodhallen, I ran into the Bar Manager whom I met during my first visit over three years ago.  This consistency of senior management shows through in consistently high-quality service of the venue.

Humble Beginnings.  The owners were not “landlords” seeking the highest rent possible from the restaurant operators.  Instead, they were seeking the best restaurant operators in the market to deliver the best food possible to increase the chances of consumer acceptance and success.  The hall owners also own the main bar (full bar offer), a craft beer bar with fast-pour taps, and a more up-scale Gin-themed Bar.  Clearly, in a well-functioning and symbiotic food hall:  if the food is good, people will come.  If people eat and enjoy themselves, they will remain and drink.  If they drink, they may then eat again.   Success is that easy, and yet that difficult to achieve.

The Foodhallen owners followed a sensible model to ensure that the food offer is not only good, but also what the customers seek to eat, at a fair price point.  The owners built out the food hall and stalls.  Food Operators paid an affordable base and turnover rent (12%) and lease terms were short (only 1 year).  If the Operator succeeded after the first year, they were offered the opportunity to sign a three-year lease.  

Our first visit in 2016.  We arrived on a late Thursday afternoon and the place was already teeming with locals – mainly 25 – 40-year olds who appeared to be either those who just left work or groups of friends.  Seating was a combination of 6-top high benches or low 2- and 4-top seats.  A DJ started playing around 19:00 to add more of a hip-atmosphere.  

Missing.  Given the historical Dutch connection to Indonesia and the many Indonesian restaurants within the city, it was interesting to not find Indonesian food among the food offered.

Initial Innovations.  In addition to the innovative investment / lease structure of the food hall, the Operators initiated a few other notable innovations to the traditional ‘restaurant’:

• Menus are generally very short and focused.  This helps to speed up the time it takes for consumers to select an item, it reduces restaurant food inventory and it improves the speed and quality of service (fewer items made very well and fast).
• The restaurants invested VERY little money in kitchen equipment.

• There is a decibel reading inside the food hall and we were told that it intelligently regulates the music volume.  People tend to talk louder over the music, which can then motivate the operator to turn up the music even more leading the diners to scream ever louder.  An intelligent sound system can reduce the music volume to that which can be heard over the din of conversation in the hall. 
• Speed Beer taps enabled the small beer bar to serve a throng of thirsty visitors extremely quickly.

Initial Challenges / Failures / Observations

• Offers that did not work:
  • Ice Cream – This was the only unit that contained a ‘professional’ back-lit sign making it look like a ‘chain’ and not ‘local’.  It failed.
  • Flamm kuchen (German/French Pizza).  Possibly, consumers were not educated.
  • L’ Entrecote – Steak + fries.  It was a gorgeous stand with delicious food located next to the high-volume beer bar.  We sure why it did not work.
• Ventilation   We were told that the architects and engineers were not allowed to extract the kitchen ventilation out of the building.  Therefore, the grease-laden extract air is cleaned and recycled back into the food hall creating an uncomfortably hot environment in the hall in the summertime. . . . not to mention the expensive up-front investment and the on-going high maintenance costs to clean the filters.
• From a design standpoint, the rear hall of Foodhallen was not strong enough to ‘pull’ diners to the back of the venue.  Initially, the founders located three mid-priced restaurants in this area offering only a table-service version of the food that was available as self-serve in the front of the hall.  The owners observed that there is a consumer who seeks the ‘cool / hip’ vibe of the food hall, but actually seeks more high-touch attention and more premium food and drink offers.  Consequently, the owners completely closed the rear hall renovating it into a premium-positioned venue with full waiter service.  They also created a very hip Pool-themed bar with drink prices 20 – 30% higher than at the Gin Bar in the food hall.  This bar successfully pulled in those more discriminating bar consumers who are looking for a more exclusive drinking experience.

Over 20 varieties of cuisines are offered within the hall.   Naturally, not all of the original concepts survived – and this is a good (and natural) evolution of a great food offer that seeks to stay ‘on trend.’  Of course, burgers, Mexican, and pizza have survived the test of time, but we are told that the top selling concepts are Asian (Vietnamese and a Dim Sum concept).   

The 2020 Version.  Our return visit in October of 2020 was during the beginning of the Covid virus lock-down in Amsterdam.  Therefore, it is impossible to understand the consumer response to the offers.  However, it was refreshing to meet some of the same restaurant owners and staff, and the same Bar Staff from my prior visits.  

It was quite odd being in a food hall with only 50 other guests – a hall that is normally teeming with 500+ guests every evening.  It did allow us to gain photos that we would normally not achieve.

Many concepts have lasted the test of time.  I think this is a ‘normal’ evolutionary process in gastro – those concepts that are going to fail, fail within the first two years.  The strong concepts can maintain success over time.  As the food hall has been open for 6 years, it is also understandable that some of the stands that have remained opened from the beginning required a ‘refresher’ investment.  One of our favorite concepts is Viet View.  These folks created a concept with three core menu items:

1. Goi cuon – rice paper rolls
2. Cha gio – fried rolls
3. Banh mi – Vietnamese flavors in a baguette (pretty much created for the French occupiers of Vietnam)

The original Viet View food stand maintained the front kiosk facade like all other kiosks (the wood slats on the lower portion).  They added rough hewn wood at the customer level to create a more rustic/rough concept – the important part of the concept that the consumer touches..  The menu was hand-written on chalk (like most offers at the time). The hand-writing creates a perception of ‘hand-made’ and flexible/changeable (versus fast food back-lit TV screens).  See photo below from our 2018 visit.

The renovated 2020 version includes a more readable sign, ‘clean’ tiles on the lower level in place of the wood slats.  The menu board is more legible/easy to read.  And, the counter top was replaced with a new hard wood.  While this new look may be in line with a more mature Foodhallen consumer (meaning a consumer looking for more ‘chain-like’ offers), I actually prefer the original design as it is more consistent with the authentic Vietnamese positioning of the offer.  See new version below.

Foodhallen is not cheap.  Even as prices have not increased significantly from our 2018 visits, it is tough to visit and not spend 30 to 40 EUR per person.  Why?  Because if you love to eat and try new foods, it is tough to not visit 2 to 3 restaurants ordering sharable items.  See below photos of food from Bulls & Dogs and Maza as examples.  Bulls & Dogs specializes in gourmet sausage creations with their signature razor-thin onion rings.  Maza is the healthy vegan option featuring colorful and healthy Middle Eastern specialties.  

Bulls & Dogs

Maza

Conclusion.  While Food Halls are a relatively new phenomenon, the concept of social dining has not.  Food Courts were designed for quick re-fueling stops to keep shopping center patrons energized to spend more money.  Food Halls were created to encourage its customers to dwell.  Halls like Food Hallen developed a strategy, created a space, assembled the right vendors with the right economic structure to huge success.  We applaud their innovation and recognize that many of their lessons should be understood (and copied / adapted) to other markets in Europe.

Onward!