tv 60 Minutes CBS February 4, 2018 7:00pm-8:01pm EST
captioning funded by cbs and ford. we go further, so you can. >> alfonsi: tonight, on this special edition of "60 minutes presents," on the "60 minutes" menu: >> the most beautiful thing. i love innovation, i love competing. i hate my competitors. >> you hate your competitors? >> of course, i do. i want to beat them up. >> you want to make dannon yogurt and yoplait suffer? >> back to-- france. ( laughter ) >> he is the billionaire creator of chobani yogurt, and a reminder that foreigners don't always take jobs from americans, sometimes they create them-- a lot of them. >> hey, brother, how you doing? ♪ ♪ >> the relationship between cuba and the united states has been changing at a dizzying pace in recent years, but one battle, dating to the cold war continues-- over rum.
we went to cuba to try to understand more about the rum war, and found out it's complicated, and you need to pull up a seat and make yourself comfortable to try and figure it out. >> thousands of people line up every day at shake shack, the burger chain danny meyer created. when we were at one of them, the wait was almost an hour. is it worth it? >> its very good. >> really? >> yes. >> it's burgers, it's fries and it's shakes; you haven't reinvented the wheel here. >> we are as, sometimes as mystified as anybody as to what the magic of shake shack is. >> mostly, danny meyer is an innovator. >> welcome here. >> and the newest changes he's pushing may radically alter the way restaurants do business.
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>> alfonsi: good evening. i'm sharyn alfonsi. welcome to "60 minutes presents." tonight, we have three flavorful stories on the "60 minutes" menu. we begin with a yogurt entrepreneur. at a time when americans are debating whether immigration and refugees are a good thing or a bad thing for the country, it is sometimes noted that tesla, google, ebay, and pepsi-cola are all either founded by or currently being run by immigrants, and in one case, a refugee. it's a reminder that foreigners don't always take jobs from americans-- sometimes, they create them. and of all the success stories, none seems more relevant to the current debate than the tale of hamdi ulakaya, who came here from turkey 24 years ago on a student visa with almost no money. as steve kroft first reported in april, ulakaya is now a billionaire who has changed
american tastes with his chobani yogurt, resurrected the economy in two communities, and drawn praise, and some hostile fire, for the way he's done it. >> kroft: he is a familiar, paternal presence on the factory floor, where everyone calls him hamdi. >> hamdi ulukaya: hey, brother, how you doing? >> kroft: he oversees every detail of a product line that barely existed a dozen years ago: greek-style yogurt, a thicker, tangier version of the dairy product that ulakaya popularized here and named chobani. it's now the best-selling brand in america. what does the word "chobani" mean? >> ulukaya: it means shepherd. >> kroft: shepherd? >> ulukaya: shepherd. it's a very beautiful word. it represents peace. and it meant a lot to me, because, you know, i come from a life with shepherds and mountains and all that stuff. >> kroft: his family raised goats and sheep and made cheese and yogurt in a small kurdish village in eastern turkey. during the summer months, they would move to the mountains and
graze their flock under the stars. he says he was born on one of those trips, but he doesn't know the date, or the year. so how did you come not to know your birthday? >> ulukaya: yeah, in the old days, you know-- the nomads, you know, they didn't deliver babies in the hospitals. >> kroft: midwives? >> ulukaya: midwives, yeah. they would register when they come back. the registration officer would put everybody in january. says it's easy for math. like, 70% of our town at that time, born in-- somehow in-- january. i'm january 20th. this reminds me of home. >> kroft: he came to the u.s. at 22, a passionate, idealistic student who had gotten in trouble with turkish authorities for writing articles sympathetic to the kurdish rights movement. he was hauled in for questioning, and decided it might be a good idea to leave. did you speak any english when you came? >> ulukaya: no. >> kroft: none? >> ulukaya: zero. >> kroft: no family, no-- >> ulukaya: nothing. nothing. >> kroft: no friends?
>> ulukaya: nobody. no. >> kroft: it took him a year to find his footing in upstate new york, where he spent the next decade finishing his studies, working on a dairy farm and starting a modest feta cheese business... where one day, he spotted an ad. >> ulukaya: it said, "fully equipped yogurt plant for sale." and it has a picture in front, it said 1920 on the back. there was small, small pictures of various per-- parts of the plant. and i called the number. >> kroft: the real estate agent said the 85-year-old factory was owned by kraft foods, which had decided to get out of the yogurt business. >> ulukaya: and i asked for the price, and he says $700,000. i mean, you cannot even get a tank with $700,000. how could this be? so i didn't ask the second time, because i didn't want him to think that i-- >> kroft: didn't believe him? ( laughs ) >> ulukaya: yeah. >> kroft: or get him to reevaluate the price? >> ulukaya: yeah, he says, "oh, maybe-- we're asking too little." >> kroft: sensing an opportunity, hamdi set off to
the small village of new berlin, new york to have a look. there he found the last employees of the last plant in the area, closing it down. >> ulukaya: i remember like yesterday. it's like, this sadness in this whole place. like as if somebody died, like, somebody important died. >> kroft: 200 jobs? >> ulukaya: 200 jobs, was gone. >> kroft: former employees frank price, maria wilcox and rich lake were among the mourners that day. >> rich lake: your whole livelihood's gone. you don't really know what you're going to do or where you're going to go. >> kroft: so in comes this guy. did you think he was for real? >> lake: honestly, it was a little farfetched-soundin' at first. ( laughter ) there was a little bit of doubt. at least for me, there was. you know, i mean-- >> ulukaya: it's okay. i doubted myself, too. ( laughter ) >> kroft: he didn't have any money, but he managed to get a regional bank and the small business administration to split the risk of a million dollar loan. that put chobani in business, and allowed hamdi to hire his first five employees-- four of
whom had been let go by kraft. >> ulukaya: and we had no other ideas what we were going to do next. >> kroft: it would take them two years to come up with a product and figure out how to produce it. hamdi spent most of his time in the plant, except to grab two meals a day at the local pizzeria owned by another immigrant, frank baio, and his wife betsey. >> ulukaya: this is the only place in my, you know, in my early days of coming here, this is the only place you can come and connect to life again, and society and go back to whatever you do. >> frank baio: and i want to say something, 'scuse me if i interrupt you. before hamdi showed up in this town, i was the king. ( laughter ) >> kroft: what did you think of his plans? >> frank baio: well-- ( sighs ) let's put it to you this way: i kind of felt sorry because i don't think he knew what he was getting into. i mean, i-- you figure for kraft to shut it down, who the hell is this guy, that he's going to open up and-- make it right, make it going?
>> kroft: almost all of the early chobani meetings took place here, along with some small celebrations. betsey remembers one where hamdi offered this toast. >> betsy baio: he said, "here's to wishing we could ever make 100,000 cases of yogurt in a week and not worry about the light bill anymore." i said to my husband, "i'm going to feel so bad when he loses his shirt, 'cause he's never going to sell 100,000 cases in a week." >> kroft: actually, it would take only a year. the first order of chobani yogurt, 150 cases, was delivered to a kosher grocery store on long island in october of 2007. no one knew if there would be another. >> ulukaya: the store manager called me and said, "i don't know what you're putting into these cups. i cannot keep it on shelf. don't tell me what you're putting in there." at that moment, i knew this was, like, three months in, this was not going to be about if i could sell it. it was going to be about, can i make enough? >> kroft: more milk? >> ulukaya: yeah. >> kroft: it would require more
machines, bigger facilities, more milk from the surrounding dairy farms, and a lot more people. between 2008 and 2012, production of chobani yogurt grew to as much as two million cases a week, revenues reached a billion dollars a year, and the number of employees shot up to 600. it's now roughly 1,000. >> ulukaya: anybody in the community who wanted to work for those years would find a job at chobani. anybody. we were hiring. and if they were not working for us, they were working for the contractors that were doing job for us. because the-- my-- my number one thing is, i was going to hire everyone local before i go outside. >> kroft: hamdi's recruiting effort included a stop at a refugee resettlement center in the city of utica, 40 miles away, where he heard they were having trouble finding people work. >> ulukaya: they said, "well, the language is a barrier. and transportation."
i said, "okay, let's try some. i will hire translators, and we'll provide transportation. let them come and make-- yogurt with us." >> kroft: and they worked out? >> ulukaya: oh, perfectly. and they are the most loyal, hard-working people, along with everyone else here. right now in our plant in here, we have 19 different nationalities, 16 different translators. >> kroft: by 2012, the capacity of the plant in new berlin had maxed out. they were running out of people, running out of milk and running out of room. so, hamdi decided to build a second facility-- the largest yogurt plant in the world, in the town of twin falls, idaho, all based on a sketch he'd roughed out on a napkin at frank's pizzaria. >> ulukaya: and if you look at the plant and the-- and the napkin, it's basically the similar-- similar design. the piping in this plant is-- if you put it together-- from here
to chicago, and we built them, less than a year. >> kroft: there were some initial growing pains-- a shipment had to be recalled because of mold contamination, and early production delays necessitated an emergency loan. but the business survived and has thrived in large part because of hamdi's competitive nature. >> ulukaya: i love innovation, i love competing. i hate my competitors. >> kroft: you hate your competitors? >> ulukaya: of course i do. i want to beat them up. >> kroft: you want to make dannon yogurt and yoplait suffer? >> ulukaya: back to-- france. ( laughter ) just kidding aside. what i mean is, you cannot be in the world of business-- when you don't have this consciousness of winning. but in a right way. >> kroft: today, the twin falls plant has 1,000 employees, with above-average wages and generous benefits. it pumps more than $2 billion a year into the regional economy, which is now running at close to full employment. it's allowed hamdi to hire
fellow immigrants and refugees, not instead of american workers, but alongside them. we met two of them in twin falls, sisters, and agreed not to use their names or disclose the middle eastern country they fled, because they fear reprisals from the human traffickers that separated them from their family, then abandoned them as young girls on a street corner in eastern europe. how did you manage to get out? >> sister 1: took us a long time. i prefer really not to talk about it because it is really painful-- >> sister 2: it's painful, yeah. >> kroft: would you have survived if you had stayed there? >> sister 1: no. >> kroft: you're sure of that? >> sister 1: yeah, definitely. i was not sitting here alive if i was not leaving. >> ulukaya: they got here legally. they've gone through a most dangerous journey. they lost their family members. they lost everything they have. and here they are. they are either going to be a part of society or they are going to lose it again.
the number one thing that you can do is provide them jobs. the minute they get a job, that's the minute they stop being a refugee. >> kroft: hamdi ulukaya insists he's not an activist, just a businessman. but the fact that he comes from a muslim country, supports legal immigration and helps refugees has not been universally popular in idaho, one of the most conservative states in the country. during the 2016 presidential election, chobani was attacked by far right media, including breitbart, claiming it had brought refugees, crime and tuberculosis to twin falls-- none of which is true, but both hamdi and the mayor of twin falls received death threats. one publication had a headline that said, "american yogurt tycoon vows to choke u.s. with muslims." >> ulukaya: yeah. >> kroft: people targeted you? >> ulukaya: yeah, it was an emotional-- emotional time.
people, you know, hate you for doing something right. i mean, what can you do about that? there's not much you can do. >> kroft: the situation has cooled somewhat, and hamdi enjoys the full support of idaho's very popular and very conservative governor, butch otter. >> governor butch otter: i think his care about his employees, whether they be refugees, or they be folks that were born ten miles from where they're working. i believe his advocacy for that person is no different. and there's nothing wrong with that. >> kroft: we traveled with ulukaya to europe, where he has made the international refugee crisis the focal point of his personal philanthropy. he's donated millions to help survivors, like these in italy-- >> ulukaya: what's your name? >> kroft: ...who risked everything fleeing iraq, syria and africa in hopes of finding a better life. he's also enlisted the support of major u.s. corporations in the cause and pledged to give most of his fortune to charity. >> ulukaya: she died? >> refugee: yes.
>> ulukaya: and the kids died too? >> kroft: hamdi says he had no idea that things would turn out the way they have, when he came to america 24 years ago and bought that shuttered yogurt plant in upstate new york. he is now showing his gratitude. in 2016, he gave 10% of all of his equity in chobani to his employees. >> ulukaya: it's not a gift. it's not a, "oh, look how nice i am." it's a recognition. it's the right thing to do. it is something that belongs to them that i recognize. that's how i see it. >> alfonsi: two days after our story first aired last year, the far right radio host alex jones posted a fresh round of accusations that chobani was "importing migrant rapists." this time, the yogurt company sued. last may, jones settled the case and expressed regret for the way he characterized the employees of chobani.
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>> alfonsi: the relationship between cuba and the united states was stuck in pretty much the same bad place for half a century, but things have been changing at a dizzying pace in the last couple of years. president obama started the thaw in the relationship, reestablishing economic ties and easing restrictions on travel. now, president trump has announced plans to undo many of those moves. and fidel castro, who spent 50 years poking his thumb in the eye of every american president, has died. whatever happens, there's already a war under way that has the u.s. and cuba on the rocks. as we first reported last year, it's a war over rum-- specifically, over two different versions of havana club rum--
and it's as bitter as the cold war ever was. ♪ ♪ it's a tuesday afternoon at el floridita in old havana, and we and lots of other visitors to cuba are filing in and filling up at the bar that calls itself the "cradle of the daiquiri." head bartender alejandro boliívar needs to double up on rum bottles just to keep up with demand. how many bottles do you go through a day? any idea? >> bolívar: so, it's at... it's between 60 and 80, 80 bottles per day. >> alfonsi: that's a lot of daiquiris. >> bolívar: yeah. plenty of empty bottles. >> alfonsi: oh, my gosh. is this just from today? >> bolívar: yeah. today, yeah. >> alfonsi: all those bottles were filled with havana club rum, produced by a 50-50 joint venture between the cuban government and the french beverage giant, pernod ricard, which sent jérôme cottin-bizonne to cuba to run the business. we met him in a place that's
rarely open to outsiders: a warehouse stacked to the ceiling with oak barrels full of rum. >> jérôme cottin-bizonne: we built a very great success with havana club, when we started the partnership in 1993, and we sold five million bottles a year. today, we sell 50 million bottles a year. >> alfonsi: 50 million bottles, 11 million of them sold here in cuba. the tourists drinking havana club are obvious, but we went looking down the side streets and found locals drinking it, too, at domino games, dance halls and discos; and sipping it along havana's seafront promenade, the malecon. to distill and age all that rum, the cuban government and pernod ricard rely on asbel morales, havana club's master rum-maker. he loves talking about rum, but he says to really understand it, you have to drink it.
es muy bueno. >> asbel morales: muy bueno. >> alfonsi: "the first sip will impact you the most," he said, "and make you anxious for a second." i am anxious to continue the second sip. ( laughter ) and the third, and the fourth. we don't have anything else to do today, do we? and the cohiba cigar that he says pairs perfectly with this havana club. as we drank and smoked, morales told me, "cubans are born with a 'rum gene.'" and to be real havana club rum, he said, it must be made from cuban sugar cane and aged in the hot and sticky cuban climate. here's where it gets confusing. this is another bottle of havana club rum. exact same name, but you can see right here, this one is made in puerto rico, and it's made by bacardi. how in the world can you say "havana club" when you're making it in puerto rico?
>> rick wilson: i... just the way that you say, i'm calling it "arizona iced tea," and i'm not making it in arizona. >> alfonsi: rick wilson is an executive at bacardi, originally a cuban company, and now the largest privately-held liquor business in the world. >> wilson: the true havana club, made with the recipe of the original founders, is the havana club that bacardi is making and selling here in the united states. >> alfonsi: bacardi bought that original recipe from the family of this woman, amparo arachabala. and it was one of the wealthiest families in cuba before the revolution? >> ampala arechabala: yes. definitely. definitely. >> alfonsi: the arechabala fortune was built on sugar and shipping and rum-- havana club rum. like hundreds of other cuban companies, theirs was confiscated shortly after fidel castro's revolution in 1959. >> arechabala: they took over the company on december 31, 1959. >> alfonsi: and do you remember
that day? >> arechabala: i remember that day vividly. my husband came home. he went to work early, and then he came home, and he says, "they've thrown us out. it's over." >> alfonsi: "it's over," he said. >> arechabala: he said, "it's over." >> alfonsi: all of their assets gone, amparo and her husband ramon were ordered to leave cuba with only the clothes on their backs. and how much money did you have in your pockets? >> arechabala: absolutely nothing. nothing, nothing, nothing. >> alfonsi: what was it like when you got on the plane? >> arechabala: everybody in the entire plane was crying. and i remember i look out the window as we were taking off, and i say to my husband, "take a good look because you're not going to see it again." >> alfonsi: in cuba, the arechabalas and bacardi had been competitors, each making and selling popular brands of rum. but when the revolution came, rick wilson says bacardi had an advantage.
>> wilson: bacardi, unlike most other cuban families and companies, had assets outside of cuba. >> alfonsi: is that the reason they were able to survive? >> wilson: yes, because we could continue to produce and sell our product, unlike the arechabalas. the arechabalas, everything they had was in cuba. everything. >> alfonsi: everything except the recipe for havana club rum. the arechabalas eventually sold it to their old rival bacardi, which makes this version at its distillery in puerto rico. they did it to compete with this version, made by the cuban government and their partner, pernod ricard. that set off the longest bar fight ever. it has been fought both in the courts, where the latest lawsuit is pending, and the marketplace, between two of the world's largest liquor companies. pernod ricard produces absolut vodka, chivas regal scotch, and beefeater gin. bacardi makes grey goose vodka,
dewar's scotch and bombay sapphire gin. and now, they both make havana club rum, and they both try to claim the moral high ground. and it wasn't that pernod ricard had just stepped up and they looked to be competitors to you. >> wilson: no. i mean, we don't mind competition from pernod ricard or anyone else. pernod ricard, though, did and is partnering with the cuban government, who has confiscated the assets of a family. no compensation paid. >> alfonsi: it's hard to believe that a company like bacardi is just making a moral argument. that it's just about... >> wilson: we're... we're not. we're making a moral and a legal argument. and the legal argument is? >> wilson: theft. i mean, it comes down... it's stolen property. that's what it comes down to. >> alfonsi: the bacardi family will say that this havana club is stolen property. >> cottin-bizonne: well, you see the place. we are here in our distillery.
it was built in 2007. >> alfonsi: and none of these facilities were used before the revolution? >> cottin-bizonne: none of these facilities were used before the revolution, no. >> alfonsi: and asbel morales dismisses the argument that the havana club rum he produces for pernod ricard in cuba is not the real thing, because it's not made from the original arechabala family recipe. "the recipe remains in this land," he said. "it is here in this climate, the culture." >> cottin-bizonne: it's very simple. to make a cuban rum, you need to make it in cuba. you know, it doesn't take more than that. you cannot make cuban rum in puerto rico. >> alfonsi: and the arechabalas cannot, he insists, claim to own the havana club brand, decades after abandoning it. >> alfonsi: how do you feel that they used that word about the family, saying they abandoned the brand? >> arechabala: they can say whatever they want. they can say that we abandoned. we didn't abandon anything.
they threw us out. >> alfonsi: the castro government did that. the french company pernod recard came along much later and turned the cuban havana club into a global brand and an icon of cuban culture. havana club. we found the logo everywhere we went in cuba; on every glass in every bar, on taxi drivers and parking attendants; on the chairs we did our interviews in; and at the tourist market, on artwork and tote bags and t-shirts, right alongside other symbols of cuba. do you sell more che t-shirts or more havana club t-shirts? >> same. >> alfonsi: about the same. >> cottin-bizonne: when we sell a bottle of havana club in france, in england or in chile, we not only sell the liquid, we sell the soul of the country. >> alfonsi: the one place in the world they can't sell their havana club at the moment is the united states, because of the trade embargo on cuban products that has been in place since 1962. but there is a way for americans to have the cuban version;
in 2016, then-president obama lifted limits on how much rum and cigars tourists could bring home from cuba. will you be bringing rum home with you? >> yes. lots of rum. we stocked up. now, we just need another case to bring it back in. >> alfonsi: the makers of cuban havana club aren't satisfied with just sending suitcases full of rum home with tourists. they want to ship containers full, when the trade embargo is lifted. >> cottin-bizonne: in cuba, we know how to be patient. look, all the rum sitting around us, all these barrels. it's years and years of aging. years and year of work, of dedication. we know that one day we'll be able to sell our rum, havana club-- the true cuban rum, made in cuba-- and that the u.s. consumer will have the chance, the opportunity to enjoy it. >> alfonsi: consumers in the u.s. drink 40% of the world's rum, which explains why they're stacking barrels sky-high in cuba in preparation. this is all ready to go?
>> cottin-bizonne: this is all ready to go. >> alfonsi: for now, though, the trade embargo continues, and so does the court fight over who has the right to use the havana club name. on the streets of havana, there's no disagreement on that point. hola! we took a few bottles of bacardi's version there to sample reaction. do you drink rum? >> si! >> alfonsi: have you ever seen this before? these men we found playing dominos on an old havana side street were more than happy to try it. >> similar. >> alfonsi: similar. "it's good," he said, "but the cuban is better quality." >> ernesto iznaga: color is different, the stamp is different. this is the real havana club, the symbol. >> alfonsi: in a bar called sloppy joe's, manager ernesto iznaga wanted no part of bacardi's havana club. you don't even want to try it. >> iznaga: no. >> alfonsi: you can just have a sip. you don't have to drink the whole bottle. >> iznaga: no.
>> alfonsi: no? >> iznaga: sorry. >> alfonsi: these are the front lines: two bottling lines in two countries; each one producing havana club rum; each claiming that its version is the only real and authentic one. not so far apart in miles, but worlds apart in the rum war. >> this cbs sports update is brought to you by the lincoln motor company. at the phoenix open, gary woodland shot 64 in the final round for his third career tour victory. in college basketball, villanova won its ninth consecutive game and ohio state reached 20 wins on the season with its victory. for more sports news and information, go to cbssports.com. jim nantz reporting from scottsdale, arizona.
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danny meyer has had a big impact on how your meal went. since meyer opened his first restaurant in 1985, the innovations in food, service and hospitality he's pioneered have been so widely copied, they've changed the way america dines out. he now runs 15 restaurants. and shake shack, the burger joint he opened in 2004, has become a global, billion-dollar chain. but, as anderson cooper first reported last fall: in danny meyer's most daring innovation to date, he is eliminating tipping in his restaurants. a move which, if successful, may radically alter the way restaurants do business. >> cooper: thousands of people line up every day to eat danny meyer's food. here at citi field, the home of the new york mets, some fans come early just to get a taste of shake shack. when we were there, the wait was almost an hour long. have you been to your seat yet? or you just came straight here-- >> no, no, no. we came straight in.
>> cooper: just to beat the line? >> you have to. it's the only way you get a burger. >> cooper: is it worth it? >> it's very good. >> cooper: really? >> yeah. would you like one? >> cooper: danny meyer says shake shack burgers taste so good because he makes them with the same high-quality ingredients he uses in his expensive restaurants, but that still doesn't explain why people are willing to stand in those long lines. it's burgers and it's fries. and it's shakes. you haven't reinvented the wheel here. >> danny meyer: we are as, sometimes as mystified as anybody, as to what the magic of shake shack is. i think we know that this is fine-causal. this is a new way of dining-- >> cooper: fine-causal. >> meyer: fine-causal, which is marrying together the ethos and taste level of fine dining with the fast food experience. >> cooper: so you don't call it fast food. >> meyer: when did you ever go to shake shack and find the experience to be fast? this was such a historic, beautiful park. >> cooper: we went with danny meyer to new york city's madison
square park, where he created the first shake shack in 2004. the reason i haven't had a burger before from shake shack is because of the line. >> meyer: instead of simply asking yourself, "is the burger so good that you would choose to wait in line," i think the question is, "what else are they getting out of the experience?" and i think what fast food hijacked was the notion that people actually want to be with people. their whole promise was basically, "we're going to get you out of here so quickly, you'll never have to see a person. in fact, we're even going to give you drive-through lines, so you never have to get out of your car." and we're kind of doing the opposite of that. >> cooper: i'm going to get a-- cheeseburger, a shack burger? >> cashier: shack burger. >> meyer: shack burger. >> cooper: shack burger, sorry. and a coffee milkshake and fries. there's something about the combination of the bun and the burger. >> meyer: so if you think about it, a hamburger is basically two things. it's the bun and the meat. and what's great about this bun is that it doesn't fight you as you're eating it. it absorbs juices. >> cooper: it doesn't fight you? >> meyer: it doesn't fight your teeth.
i think it's a mistake if the bun is too big and too hard. >> cooper: his attention to detail has made meyer a leader in fast casual dining, or what he calls fine-casual. although not the largest, it is the fastest growing sector of the restaurant business. meyer believes many consumers want good food delivered in less time and at less cost than at a full-service restaurant. >> meyer: and i think what fine- casual is doing is, "if you're willing to give up waiters and waitresses and bartenders and reservations and table cloths and flowers, we're going to s-- we're going to give you about 80% of the quality that you would have gotten in a fine dining restaurant. we're going to save you about 80% of the money you'd spend in a fine dining restaurant. and we're going to save you about 60% of the time." >> cooper: fine dining is how meyer started in the restaurant business more than 30 years ago. he opened his first restaurant, union square cafe, in 1985, in what was then a seedy
neighborhood in lower manhattan. back then, people dined out less frequently, and expensive restaurants were often formal, and intimidating. danny meyer had a different vision. >> meyer: i said, "let's create a restaurant where you can feel great if you're dining alone." so we created a bar for dining, at a time when you never got three-star food at a bar in new york city. that was the domain of coffee shops. i wanted to go to a restaurant where i could drink great wines by the glass. so i was just looking to break as many rules as i possibly could, but ultimately, to create a restaurant that, at the age of 27, would have been my favorite restaurant, if only it-- it had existed. >> cooper: meyer has been fascinated with food since he was a child. he grew up in st. louis, the son of an entrepreneur and an art gallery owner who loved entertaining and cooking. do you think about food all the time? >> meyer: constantly. >> cooper: have you always? >> meyer: i think i have, for whatever reason, since i was a little kid. i'd go to the st. louis cardinal baseball games and i was the guy
that would get the whole hot dog, like everybody did. but i'd go to the relish station and i'd put a little ketchup on this bite, a little mustard on this bite, a little onion here, a little pickle relish here, to see which i liked better. >> cooper: i, i don't know how to ask this, but, i mean, were you a chubby kid, if you were eating all the time? >> meyer: i actually was a chubby kid. by the time i got to be 12 years old, 12, 13, 14, and that's kind of how i always felt, thereafter. and so it, it gives me great pleasure that today i can kind of eat as much as i want, because i know how to exercise, and i know how to balance it out, but it also probably put me in a position where i love seeing other people eat. welcome here, i hope you've enjoyed your lunch. >> cooper: today, meyer's company, union square hospitality group... >> cheers. >> cooper: ...oversees 15 different restaurants, all in new york. they operate upscale eateries, casual bistros, a cocktail lounge, and a neighborhood bakery. >> meyer: how old is your baby?
>> cooper: what they all have in common is danny meyer's philosophy of hospitality, which he pioneered, but has since become a standard for the industry. >> meyer: tell me if that's the best chocolate chip cookie you've ever had. hospitality basically says that the most important business principle at work, way beyond that the food taste great-- and by the way, if the food doesn't taste great, you're never coming back here. but if the food tastes great, that alone does not assure that you will come back here. so what hospitality does, is it adds the way we made you feel, to how good the food tasted. >> cooper: so the experience of dining out for you is the most important thing? >> meyer: i think the experience of how you are made to feel is the most important thing. >> server: good morning. welcome. >> cooper: the key, he says, is to hire people who are intuitive and empathetic. he has more than 2,000 employees, and he trains them to pick up on the customers' cues. >> meyer: everyone on earth is walking around life wearing an invisible sign that says, "make
me feel important." and your job is to understand the size of the font of this invisible sign and how brightly it's lit. so, make me feel important by leaving me alone. make me feel important by letting me tell you everything i know about food. so it's our job to read that sign and to deliver the experience that that person needs. >> cooper: this is the reservation system. >> scott reinhardt: yes. >> meyer: are there any folks here that i'm supposed to be saying hello to today? >> reinhardt: we have a regular right here. >> cooper: in the restaurant business, profit margins are razor-thin, and repeat customers are critical. >> meyer: thanks for being here today. >> customer: nice to see you. >> cooper: meyer has made an art of making his customers feel welcome, tracking their likes and dislikes. i-- i've also heard you say that you always identify the boss at the table. i didn't realize there was a boss at each table. but how do you do that? >> meyer: well, there-- there's no question in my mind that at every single table, there's somebody who's got the biggest agenda. if it's two people doing business, there's someone who's trying to sell something to somebody else.
and i think that if you can figure that out early on in the meal, and understand what is it going to take for the boss to leave happy-- it could be, make sure that someone else gets to pick the wine. you've just got to pick up on those cues. >> cooper: meyer's most controversial innovation is also his riskiest. he is trying to eliminate tipping, to combat pay inequities between servers, whose tips have gone up as menu prices have increased, and those who work in the kitchen, who under most state laws, can't share in gratuities. so the cooks, dishwashers, they don't get any part of the tip? >> meyer: they don't get any of it. and what i noticed, after being a restaurateur for 30 years, is that the growing disparity between what you can make in the dining room where tipping exists, and what you can make in the kitchen had-- the disparity had grown by 300%. >> cooper: meyer has so far eliminated tipping in ten of his restaurants.
he's increased the base pay of both servers and kitchen staff, and in some restaurants, gives waiters a share of the weekly revenue. he has raised menu prices significantly, on average, nearly 25%. but when the bill comes, there's no line for leaving a tip. you call it "hospitality included." you don't say, "no tipping." >> meyer: so by saying, "hospitality included," it's basically saying, "you see that price that it costs to get the chicken? that includes everything. that includes, not only the guy that bought the chicken and the guy that cooked the chicken, but it also includes the person who served it to you, and how they made you feel." >> cooper: so for the customer, in the end, is the bill the same? >> meyer: the bill, by the time you get your bill, whatever shock you did or didn't feel when you saw the menu prices should completely dissipate, because you should say, "that's exactly what it would have been if they hadn't had this new system." >> cooper: plus, at the end of the meal, you don't have to deal with the hassle of figuring out what to tip. >> meyer: that's absolutely
true. and let's face it, the end of the meal tends to be when people have had more wine than the beginning of the meal, and sometimes people make honest mistakes. >> cooper: there's not a lot of restaurants though, who are following your lead. >> meyer: that's absolutely true, and it kind of reminds me of-- in 1990, when i decided to eliminate smoking at union square cafe. >> cooper: that was long before the law actually ended it. >> meyer: it was 12 years before it became law. and so for me, it's almost immaterial who's doing it, besides us. what matters is that-- that we're doing it. it could be that we're slightly ahead of our time. but we're in it to win this thing. hi. >> audrey heffernan meyer: how are you? nice to see you. >> cooper: meyer reopened his first restaurant, union square cafe, in a new location in late 2016. it's another no-tipping restaurant. >> meyer: this pinch point here is the issue. >> cooper: minutes before the first customers arrived, meyer was still making final adjustments... >> meyer: one more four-top, and
then a six-top there. >> cooper: ...determined to deliver a dining experience that would keep them coming back for more. >> meyer: yay. my mind doesn't shut up, and i'm constantly thinking about, "how could we do this better? how could we make this better?" i don't want to ever open a restaurant that, if it closed, people just wouldn't care. >> cooper: i will say, i mean, it's been now 24 hours since i had my first burger at shake shack, and a coffee milkshake. i have been thinking about it more than i have thought about food in a long time. >> meyer: so, all you need to know about me, after all these questions, is that nothing in the last 24 hours makes me happier than hearing what you just said. ( laughs ) >> for a look at how "60 minutes" reports its stories... ♪ ♪ ...as well as interviews with correspondents and producers, go to 60minutesovertime.com. sponsored by prevnar 13. you may be at increased risk for pneumococcal pneumonia,
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