Pie in the Sky? 

With demand for organics outstripping supply, is it possible to run a completely organic restaurant and still make money? Michael Altenberg thinks he has the answer--and it's pizza.

If running a restaurant is enough to give anyone a headache, Michael Altenberg must be trying to give himself a migraine. He's weeks away from the opening of Crust, a pizzeria in Wicker Park that stands to become the fourth certified-organic restaurant in the country and the first in Chicago. But certification presents a unique set of problems. Even the simple act of bringing food into a kitchen gets tricky.

"When a delivery comes in," Altenberg says, "the first thing we need is an affidavit that says how the truck was cleaned, who cleaned it, and the products that were used. Then the driver has to come in and sign an affidavit saying that if organic tomatoes and nonorganic tomatoes were on the same truck, there was no chance of those two things commingling."

The scrutiny doesn't end there. Before a restaurant can flash the USDA organic seal, an inspector has to check the provenance of every ingredient in every recipe, which means chefs can't be nearly as flexible. "Let's say you're Bill the Tomato Grower and today you just did a bumper crop," Altenberg says. "For me to create a special pizza, I have to go through the whole process of resubmitting a recipe." That could take up to a week. "It's not going to prevent me from being seasonal. What I'm going to have to do is think ahead."

Altenberg, who also owns Bistro Campagne in Lincoln Square, announced his plans for a wood-burning pizzeria more than a year ago. The idea, even without the organic twist, was still a bit of a novelty in Chicago at the time: only a few others existed. But the organic-certification process kept causing delays. While Altenberg waited, Jonathan Goldsmith opened Spacca Napoli and started drawing huge crowds. Frasca and Gruppo di Amici soon followed. But certification could help set Crust apart, and Altenberg plans on bragging about it as much as possible. A sign already posted in one of the restaurant's windows asks, in bold type, "What does 'certified organic' mean?"

For Altenberg it's all about transparency, a way of calling out chefs who misrepresent their use of organic products and green practices. Stopping in at the farmers' market once a week isn't enough, he says. "There are a ton of guys out there getting photo-ops of them walking with baskets and sniffing a tomato. But come on. Stand at my back door [at Bistro Campagne] all day and see what I get in--and this is just a 90-seat restaurant. I have truckloads of product coming in. If you and I were going to walk together and shop for my day at the bistro, we would have to have, maybe not a semi, but a substantial truck sitting there. You'd be following me with a dolly and we'd be picking up pallets of products. It's just not realistic. It makes for good fluff in food magazines."

Organic food has been a fundamental part of Altenberg's life for 13 years, ever since his two-year-old son was diagnosed with a strain of leukemia he says was "directly correlated with environmental causes." At Campagnola, the restaurant he started in 1993 (with which he's no longer associated), he relied on organic, often local ingredients; Bistro Campagne followed the same model. "Once I started thinking about organics," he says, "it became very difficult for me to go into my restaurant and feed people food that I wouldn't feed my family." But where his previous restaurants have been upscale, Crust is supposed to be accessible to anyone, the kind of place where families can "go out and feel good about eating pizza. My kids get invited to birthday parties at Chuck E. Cheese and places like that. I can't in good conscience let them eat that crap."

A few producers Altenberg has come to trust and depend on at Bistro Campagne won't be allowed to sell to Crust because they haven't been certified themselves. And though Altenberg is growing herbs and greens in a corner of the restaurant (in EarthBoxes, an invention featured in the Reader last year) he won't be able to use them in the kitchen. "If we were to use them within our establishment, we'd have to recertify as a grower," he says.

When a restaurant wants to become certified organic, it turns to an independent agency audited by the USDA. Crust's request is being evaluated by Indiana Certified Organic. What makes the process complicated is that the USDA has never established specific regulations for organic restaurants, so certifiers wind up using the rules applied to processing plants. "It's truly set up for an organic peach packer," Altenberg says. "Affidavits to see what a truck was cleaned with? The reality of that being able to happen at a small restaurant isn't entirely feasible. It needs to be worked out."

As absurd as he thinks some of the rules are, Altenberg is determined. "The next logical step in organics is producing food at a level people can afford to buy," he says. "And pizza, which a good majority of people eat on a regular basis, seemed like a good place to start."

Before Crust came along, Indiana Certified Organic had never certified a restaurant. Now the agency's working on audit number two--and if all goes well, Chicago's Bleeding Heart Bakery, which has advertised itself as organic since the day it opened, will soon become the first certified-organic bakery in the country.

Going organic has already paid off for owner Michelle Garcia: in the year and a half that she's been operating out of her Ukrainian Village storefront, she says, her sales have doubled and she's not only expanded her kitchen but branched out into catering and wholesale bread distribution. Last year Chicago magazine named Bleeding Heart the city's best bakery. "I started right at the end of people being scared of organic," she says, "and now it's turned into something kind of couture. It's a fashion statement--which I, of course, will use to my advantage. Whatever it takes for you to think it's good for you, great."

Most of Garcia's customers have taken her organic credo on faith; she says she's had only one ask for proof. Certification at this point is more a marketing strategy: in places like Whole Foods, where Bleeding Heart already sells pastries, she says the label will lead to "our stuff selling a million times better." She also hopes Bleeding Heart's status as the only certified bakery in the country will attract gourmet-food catalogs like Dean & DeLuca and Williams-Sonoma.

So far, Garcia says, Bleeding Heart hasn't had to change its operations to meet the certification requirements: "We actually go beyond what a lot of the rules are." But the paperwork has been a pain in the ass. "It turns into me sitting down with 400 recipes," she says, "and that just doesn't make any sense, because everything changes seasonally."

When Bleeding Heart was starting up, Garcia sourced almost everything directly. In the restaurant business, that's highly unusual. Conventional distributors like Sysco are successful because they have whatever a restaurant wants; all the manager has to do is call in the catalog numbers. But few distributors had what Garcia was looking for. When she placed her first order with Goodness Greeness, a Chicago-based organic distributor that has supplied grocery stores for 15 years, she says she found "all retail packaged stuff. I was so pissed. I was like, I want 50 pounds of carrots, not 50 individual bags of carrots."

But as demand for organic products at restaurants citywide has grown, distributors have started to respond. Goodness Greeness launched a food-service division last year. Even Sysco has started to get in the game. "It's amazing how much has changed," Garcia says. "We're able to make so much more stuff because I'm able to find so much more stuff. My product line is probably ten times what it was last year." Although she still buys locally, she often turns to Goodness Greeness to find things she can't. "If somebody wants strawberries in the middle of winter for their wedding cake--even though it goes against my better judgment to give them strawberries in the middle of winter--I'm going to do it. And they're able to supply me with that."

Altenberg, like Garcia, sources his own products and places orders through Goodness Greeness. He says Crust currently has deals in place with upward of 50 producers: pork will come from the Plapp farm outside De Kalb, chicken from the Good Earth Farm in Wisconsin, and produce from greenhouses in Iowa owned by Mahrarishi Mahesh Yogi. Through Goodness Greeness, he's brokered deals to buy his dairy from Kalona Organics, an Amish cooperative in Iowa, and, starting next year, his tomatoes from Tomato Mountain Farm in Wisconsin, which also deals with Rick Bayless. "It's a commitment that you're not going to turn around and blow them off when you find something that's five cents cheaper," Altenberg says.

In a perfect world, Garcia and Altenberg would prefer to serve food that was both organic and locally produced. But in Illinois that's easier said than done. Despite the state's rich farmland, there are few organic produce farms--in fact, there aren't many produce farms, period. That wasn't always the case: before World War II, Illinois was a top vegetable producer. But the advent of industrial agriculture ramped up farm size and pushed many farmers into commodity production of corn and soybeans. When the demand for local or organic food suddenly increased, the supply was no longer there. "We need more larger-size producers," says Jim Slama, president of Sustain, a Chicago-based nonprofit that focuses on agriculture. "For the ones that are there, there's so much demand. You can buy boxes from farmers' markets, but pallets?"

Goodness Greeness distributes produce from around the world--last month, the warehouse had blueberries from New Zealand and heirloom tomatoes from the west coast--but during the midwest's growing season, the company has direct relationships with many regional farms. "What we're doing now was exactly how produce was done 20 years ago on South Water Market," says Dan Bobel, director of Goodness Greeness's food-service division. South Water was a wholesale market that used to attract vegetable "truck" farmers, though Bobel says farmers later abandoned it "because of big agribusiness coming in and giving them a low return." The advantage for farmers is organics yield a higher return, and although Goodness Greeness pays less as a distributor than a customer at a farmers' market, the company buys in bulk and absorbs all the risk. In the summer, Bobel says, when trucks hired by Amish farmers pull up to Goodness Greeness and unload pallets of vegetables, they often don't even know what's arrived until it's on the dock.

These days, any local organic product is precious. According to Slama, Illinois residents bought $500 million worth of organic food last year, 95 percent of it grown out of state. And still, he says, "there were tens of millions of dollars in demand that weren't met." In hopes of increasing production, Sustain helped write the Illinois Food, Farms and Jobs Act, which was introduced in the state legislature last month. It calls for the governor to appoint a task force that would develop policy recommendations for a local organic food system, and to earmark $5 million to support those recommendations.

When demand exceeds supply, of course, prices go up. And in an industry with notoriously thin margins, where the extra change spent per pound on organic broccoli can eat up what little profit there is to be had, restaurateurs traditionally haven't been willing to take the gamble. Bleeding Heart Bakery, for example, is in a neighborhood with no shortage of cheap butterfly cookies, and while Garcia's the only baker peddling organic, locally sourced goods, her customers pay for the luxury. The cheapest pastry at Bleeding Heart, a breakfast scone, costs $3; at Alliance Bakery, just a few blocks north, a conventional scone runs $1.50.

Bleeding Heart can't compete on price; Garcia's experience at the city-operated farmers' markets last year taught her that much. "The city markets are just full of crappy pastries," she says. "Crappy as in made with bad ingredients--some of them taste awesome. But we can't compete with a 50-cent scone. The average person walking down the street who doesn't know better will just think I'm price gouging."

Altenberg put up much of the seed money for Crust himself, as a way of proving to potential investors how serious he was about his idea. He's thought of a couple ways to make a buck on organic pie. First, pizza doesn't cost very much to make, whereas the ingredients at Bistro Campagne can be disproportionately pricey, especially the meat. A half chicken on the plate can end up costing $6 alone. Crust, on the other hand, will rely heavily on flour, a low-budget ingredient. (In addition to pizza, it'll also be used to make the restaurant's sandwich bread, which Crust's baker, Charles Foulkes, intends to sell retail.) Altenberg estimates that an organic crust will cost about 15 cents, as opposed to 7 cents for a conventional one. Meat, he says, is a flavoring agent; one chicken can be spread over 20 pizzas. When it's all said and done, a nine-inch pizza--or flatbread, Altenberg's term of choice--can be had for between $9 and $14.

The other part of Altenberg's plan is franchising. "Profitability will come with more than one location," he says. It's an idea that's also occurred to Florian Pfahler, owner of Hannah's Bretzel, a burgeoning local chain of cafes. A Whole Foods shopper, he'd noticed that the store's food-to-go section was continually expanding. "We figured that if Whole Foods can do it, there must be an ability to source goods," he says. He promptly faced the same supply problems Garcia originally had. If Hannah's Bretzel wanted to serve organic cream cheese, he realized, he'd have to buy eight-ounce packages, even though conventional comes by the gallon.

Pfahler's plan involves opening multiple Hannah's Bretzel locations in Chicago--there are already two in the Loop--before taking the idea nationwide, a rollout he optimistically likens to Starbucks. Although he says he'd like the chain to be certified organic, it likely won't happen anytime soon. The cafe serves organic beverages and pastries, but Pfahler estimates that half of everything else is conventional--and the primary reason is price. Deli loaves of organic turkey, for example, aren't cost competitive with antibiotic- and hormone-free versions. "With the price being twice as much, realistically a sandwich would have to be $10 to make some profit on it," says director of operations Richard Kruczak. Pfahler estimates his clientele will pay a 10-to-25-percent premium for organic food, but until he has enough locations to strengthen his buying power, it'll be a struggle to keep prices that low.

For an organic restaurant with only one location, profitability may be too lofty a goal. Amona Buechler, owner of the Lake Side Cafe, a vegetarian restaurant in Rogers Park, says her menu is about 90 percent organic, "and at some point, our goal is to break even." Since opening the restaurant in the fall of 2005, she and her partner, Jeffrey Tippman, have kept it afloat with the profits from their massage table company, Tao Trading. "At the moment, our prices are way too low," she says. To go completely organic--all the way down to ingredients like soy sauce and vanilla--she estimates she'd have to double her prices. David Lipschutz, owner of Blind Faith Cafe in Evanston, had considered an organic overhaul of his restaurant's vegetarian menu before reaching the same conclusion. "Without pretty much changing the nature of the cafe and the price point," he says, "I don't know if it would ever be possible to be strictly organic."

Altenberg has no interest in treading water or running a nonprofit. He wants Crust to be nothing less than the case study for a profitable and affordable certified-organic restaurant. "To me, there's nothing wrong with conscious capitalism," he says. "I gave up being a Trotskyite in college. We want to make a lot of money doing this. This is not the 1960s anymore, when you had to feel guilty making money and doing something that's right."

Art accompanying story in printed newspaper (not available in this archive): photos/Rob Warner.

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