Panacea Navigates Industry Pressures, Menu Change

In recent years, the restaurant industry has faced unprecedented challenges.

The ripple effects of the COVID-19 pandemic, skyrocketing labor and food costs, and fierce competition for staff have collectively contributed to a volatile environment. Major chains and mom-and-pop establishments alike are grappling with the industry’s economic landscape in markets across the country.

Wilmington brewery and restaurant Panacea Brewing Company exemplifies the resilience and adaptability required to navigate these turbulent times though, like many, their future remains uncertain.

Panacea’s story is one of innovation amid strife. Originally established as a small-scale kombucha brewery, owners Robin and Artie Hill sold kombucha from their “Booch Bus,” a refurbished Volkswagen van outfitted with draft taps.

They eventually opened a small taproom on Old Eastwood Road before moving to their current location at Anderson Square shopping center at 4107 Oleander Drive. There, they decided to delve into food service, looking to fill the void for vegan diners by serving a vegan menu along with fermented foods.

Today, the struggles facing the business are multifaceted. Labor costs have surged, making it more difficult to maintain a sustainable payroll. At the same time, the price of food has risen sharply, adding further strain. And with overhead costs like rent steadily increasing in growing cities like Wilmington, profitability remains an elusive goal for Panacea.

“Our brewery alone is profitable,” Robin Hill said. “But since we’ve opened this space, we haven’t seen a profit yet. We could close this place today and immediately be making more money from the brewery, but that is not our goal, we love serving the community. We love having a space where people can gather, drink and eat.”

The restaurant and taproom opened in January 2020, and while the initial success was promising, the onset of COVID-19 brought about abrupt and severe disruptions that resulted in a significant loss in revenue. The recovery has been slow and arduous with the business still trying to regain its footing.

One of the significant hurdles for Panacea, like many other restaurants, is the labor market. While front-of-house staff positions are easier to fill, finding skilled cooks has been a persistent challenge. Each spring brings what Robin calls the “big cook swap,” where cooks shuffle between restaurants seeking better opportunities.

While the Hills don’t fault kitchen staff for seeking the best opportunities, this constant turnover incurs additional costs related to the continuous cycle of hiring and training.

“People who work for $20 an hour are being priced out of living here,” Robin Hill said. “So sometimes we might take on college kids, but, you know, they too are here today and gone tomorrow.”

And so the cycle continues.

In response to rising operational costs and falling sales, Panacea did a complete audit of all its systems last year and shortly thereafter decided to expand the menu to cater to a broader audience. This meant introducing meat and dairy options alongside their vegan offerings.

The decision was not made lightly as the Hills knew it would likely upset not only their vegan clientele but their staff as well.

Although the decision was not made public until March, the Hills informed their senior management of the change last year so the staff could decide whether they wanted to be a part of it. The decision to offer equal parts vegan and non-vegan items ultimately resulted in a roughly 90% turnover in staff, Robin Hill said.

The vegan community’s response was mixed with some appreciating the continued availability of plant-based options while others felt betrayed and couldn’t get past the Hills’ decision. This backlash included online harassment and negative reviews, which further complicated the restaurant’s efforts to expand its customer base.

The Hills are not vegan themselves and admit that they were perhaps naïve to believe it was OK for non-vegans to run a vegan restaurant. There would always be some questioning of their commitment to the vegan community and its principles, particularly among activists. Many vegans saw the Hills’ decision to expand their menu to 50% vegan and 50% non-vegan as duplicitous.

“People believe we changed our values, but that’s not true,” Robin Hill said. “The reality is that we’re just a business trying to do business and trying to serve our community. We respect that people are vegan for many different reasons, but we didn’t realize that this would cause the schism that it has within the close-knit local vegan community. We’re not trying to disrupt anyone’s subculture, but unfortunately, that’s what’s happened.”

Robin Hill said the vegan community locally remains very split about the decision. While some have offered support and apologies for the harmful acts taken by members of their community, others have taken an extremist stance and inundated the Hills with hate mail, negative reviews and damaging social media posts.

“I haven’t had anyone yell at me in the restaurant, but I’ve had plenty of people yell at me from behind the screen,” Robin Hill said. “If you’re just trying to ruin my business, your agenda of kindness to animals has become more important than kindness to humans.”

In addition to navigating the backlash, implementing a dual menu has posed logistical challenges. Panacea must ensure proper separation of vegan and non-vegan ingredients to prevent cross-contamination. They have restructured their kitchen following health department guidelines and vegan and non-vegan items are prepped and cooked in separate areas.

“It’s taken time, but our numbers are literally 50-50 in terms of vegan and non-vegan sales,” Hill said. “So that means we’re gaining new customers who no longer need to begrudgingly eat a vegan meal because they were dragged here. It’s not always easy to get people to try vegan food.”

Despite the challenges, Panacea continues to adapt and strive for success. Sales are gradually increasing as they attract new customers while maintaining a loyal segment of their original base. The transition has been a delicate balancing act, but the restaurant’s commitment to quality and inclusivity remains unwavering. By serving both vegan and non-vegan dishes, Panacea aims to create a space where members of both groups can enjoy meals together, fostering a sense of community.

“I would say sales are growing slowly, but we need them to grow faster,” Hill said. “One of our challenges is to continue to get the word out about what Panacea is now.”