Michelin Starred Restaurants: Business Implications and Possible Future Trends

The story of the Michelin guide began in 1900 when André Michelin and his brother Édouard Michelin published the first edition to help drivers maintain their cars, find decent lodging, and eat well while touring France. For these reasons it initially included addresses of filling stations, mechanics, and tire dealers, along with local prices for fuel, tires, and auto repairs. It began recognizing outstanding restaurants in 1926 with a star; two and three stars were added in 1933. Gradually, additional guides were introduced for 29 countries around the globe along with its famous ranking system.

Nowadays the guide awards one to three stars to a limited number of restaurants of outstanding quality. One star indicates a “very good cuisine in its category”, a two-star ranking represents “excellent cuisine, worth a detour,” and the three stars are awarded to restaurants of “exceptional cuisine, worth a special journey”.

As of November 2020, there are currently 2,651 Michelin starred restaurants. For a more precise breakdown, that’s 2,160 restaurants with one star, 385 restaurants with two stars, and 106 boasting the coveted three stars.

It is important to note that Michelin stars are not only a symbol of prestige, creative prowess, and excellence in terms of food offering, presentation, and service, but they also represent an opportunity for monetary gain. The late Joël Robuchon, the world’s most Michelin star-decorated chef (with a grand total of 31 stars across his 12 restaurants), claimed the stars were financially transformative: “With one Michelin star, you get about 20% more business. Two stars, you do about 40% more business, and with three stars, you’ll do about 100% more business,” (interview with Food and Wine magazine, 2017).

According to the founders of Ellroy, in London, this is a conservative estimate as their markup on receiving a star generated profits that greatly – “business went up by over a third” – surpassed this standard.

However, one must keep in mind that even though stars bring more success to a restaurant, in order for the chef to maintain that success he/she should not really change: prices may be slightly raised, but not exceptionally so. Therefore, the increase in profitability must come from the ability to attract more customers all year long, rather than an increase in the profit margin.

While the implications in terms of business are surely interesting, another more recent phenomenon is not only surprising but worth citing: the rise of multiple starred restaurants by the same chef and the newer consulting positions these chefs are working on.

During an event dinner, with an investment firm, in the art museum MUDEC chef Enrico Bartolini explained that once a formula is found, it can be replicated in restaurant settings which would significantly increase, if not guarantee, the chance of being awarded a Michelin star. With this formula Bartolini was not only able to obtain a grand total of nine stars across his restaurants, but create a consulting role in the foodservice industry which allowed him to expand his influence internationally.

This phenomenon is not only interesting in terms of business opportunities for an acclaimed chef, but also may rise a question: are we going to see in the near future chains of Michelin star restaurants and more business oriented chefs?

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