TLC’s ‘Cake Boss’ Star and Food Network Baker Buddy Valastro joins Yahoo Finance Live to discuss how he's managed to pivot his business models during the coronavirus pandemic and weigh in on his return to the Food Network in a new Christmas-themed competition.
MYLES UDLAND: We're joined now by Buddy Valastro. He's an American baker, TV personality, owner Carlo's Bakery, and star of TLC's hit show, "Cake Boss." Buddy, it's great to have you on the program today. I'd love to start with getting your thoughts on how the industry, the shape of the industry right now, how your businesses has fared, what you've heard from your peers, the folks that you've known for a long time. A lot of people are hurting out there, things are not getting better. What's your overall assessment right now?
BUDDY VALASTRO: Well, I couldn't agree with you more. I mean, it's really a tough, tough time in the restaurant, bakery, retail business right now. We're probably doing about 40% of what we would normally be doing. And realistically, depending, especially like take New York City, New York City is probably doing maybe 5% of what it would be doing, because it's just kind of, there's nobody there. Broadway's not there, there's tourists not going there.
And my long term worry is not only for the restaurants, but all the landlords. Because a lot of these buildings are leveraged. And if you were paying, and I'm just going to use a fictitious number, but say you were paying $50,000 or $100,000 a month in rent and your business is down 40%, you're doing 40% of the business, well, what could you pay in rent? So you're a landlord, you're getting $50,000 a month, now you're getting, you're lucky if you can get $10,000. And the business still can't make the money.
The restaurant business is tighter than the bakery business as far as margins go. But when you, it's capacity. If you don't have, because I have a restaurant in the Venetian in Las Vegas, Buddy V's. It's Italian restaurant. And we're probably, you know, the weekends are great, but during the week, that business ain't coming back until the conventions are back in town. And realistically, how long is that?
You sit back and you think of COVID, and I know you guys do this all day long, but just from a guy like me. How, when is that business coming Back Think if you're in the convention business. You're the guy who builds the booths, the stands, the people who work in the convention center, whatever. You know how many, that industry is finished basically. For how long? Or if you're in the wedding business. Right? Wedding venues. Think of the DJs, the photographers, the florists, whatever. There's a spiral effect that I don't think we have seen yet as a country, and honestly, I'm worried. I really am.
BRIAN SOZZI: Yeah, Buddy, I was going to, let me just to hop in there here. What would you like to see from the powers that be, the powers that being in New Jersey, the lawmakers? How can they make your life easier just from a business perspective?
BUDDY VALASTRO: Honestly, it's a tough situation. Like, you know, and then people make it about partisan politics, you know, whether you're on the left or the right or whatever it is. And realistically, it was something that nobody could have fixed, in my opinion. COVID affected the world. It didn't affect America. And there's countries that are more advanced and countries that are less advanced than us that it's affecting and it's affecting us the same way.
There's certain problems that until we open up, until there's a vaccine, until people stop dying from this, it's really never going to go back to normal. Like I wish that I had the magic pill that we could take and then we're going to go back. We got to try to strive for a vaccine, which we're there and we're closer. And there's a lot of people I talk to that are like, yeah, they got a vaccine, but I ain't taking it. Or they don't trust it yet. So you have that fact.
If my educated guess would be this time next year, we should be getting back to normal. But how long can other businesses sustain? Think about malls. I mean, we're in a mall in Florida in Orlando. Traffic's down 80% . in the mall, because it's a highly tourist-driven mall and stuff like that. How do you survive? And then we're one of the only surviving business. There's 10 other stores around you that it's a no win situation.
JULIE HYMAN: Yeah, traffic is a big problem. We spend a lot of time talking about malls here on the show. Buddy. I do want to ask about another part of your brand and your business on a bit of a lighter note and a happier note, I hope. Is that you you're coming back to TLC Food Network. You're going to be doing a show, "Buddy Versus Christmas."
And one of the other things that's been interesting during this pandemic is, home baking has really had a resurgence. I know myself, I'm not much of a baker, but I've been doing a little more baking than I had been. So now when you're doing a show like that, how do you change your approach at all? Or what do you hope to bring to people who are watching at home?
BUDDY VALASTRO: Well, I mean, for me, it's always about inspiring people to want to bake at home, whether you're opening a tub of Pillsbury cookie dough and slapping it on a sheet and doing it with your kids and creating those memories that you'll never forget, or whether you're making, trying to make one of the cakes that I'll make on "Buddy Versus Christmas." As long as you're doing it as family. And I feel like that's the one good thing that's come out of the COVID, is that people are spending more family time and doing more of those activities, which is amazing.
I just, in my opinion really, hope that we could try to, I hope that business owners out there pivoted and diversified. See, I'm lucky in the fact that I'm diversified. I do television, and I own a production company that makes the television, and I own bakeries and I own restaurants and I own real estate. So if you're diversified, yeah, you might be doing bad here, but then you're not going to do well there.
I could tell you that I had to pivot in April. And my online has went 50 times, maybe 300 times what it was. And it opened my eyes. I'm like, hey, listen. You know what? I'm sitting back and I'm like, my wife don't go out anymore. She gets everything delivered to the house. So if I could really focus on this and we're on like a goldbelly and carlosbakery.com, that's where the future is.
So my advice to any entrepreneur out there is, you've got to pivot, man. This is the time where you make your bones. And I'm actually doing more and taking this negative into a positive and looking at business strategies that I might have not been so excited about say a year ago. But when you take it back, it's like, hey, listen, all this stuff is coming out of one location, it's at my factory. It's easier to maintain than, say 25 different people making it at one time. It's actually easier.