Change Agent: Eateries, Unite

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Enter Luria, a co-owner of a Southwestern restaurant in Tucson, Ariz. He took over as president of Dine Originals in 2004 and has made it his second full-time job (unpaid at that) to help independent restaurants thrive. He travels at least once a week, cultivating new chapters. And so far, every city that has asked him to speak has become a member. "If independent restaurants were to disappear, then everywhere you go in this country would be the same," says Luria.

Luria's innovation is to think of Dine Originals as one big chain--taken together, the 700 restaurants pull in about $1.4 billion in annual sales and represent $450 million in purchasing power--so its members get the clout and volume prices previously reserved for the big boys. Last month Luria signed a contract with Avendra, the top U.S. group-purchasing company in the restaurant-and-hotel sector, to get members lower prices on food and supply contracts as well as consulting advice on how to run their businesses more efficiently. The help may not reverse the chain-restaurant juggernaut, but it gives small restaurants a fighting chance. Even before the Avendra deal, many chapters had developed their own local buying programs. Under Tucson's plan, in which restaurants buy in bulk at common suppliers, Luria's Café Terra Cotta saved $100,000 on food costs last year--3% of its total sales for the year--without changing its menu. Andrew Hutto, owner of Baxter Station Bar and Grill in Louisville, Ky., used the savings from his chapter's buying group to help pay his gas and electric bill, which more than doubled, from $2,500 to $5,100 a month last winter.

Joint marketing has long been the cornerstone of local chapters, which use the Dine Originals banner to remind customers that money spent at local restaurants stays in the community, supports local farms and promotes the region's unique culinary taste. Now Dine Originals members are getting more creative with their marketing. Michael Klauber, owner of Michael's On East in Sarasota, Fla., and president of the largest Dine Originals chapter, struck a deal with local suppliers to get a small discount on purchases to be used for joint marketing. "I told them the more they help us fill seats, the more business they'll generate from us--and they got it immediately," says Klauber. He estimates that, thanks in part to the marketing push, his restaurant has increased sales about 15% in the past two years.

While the chance to save money in an industry notorious for wafer-thin margins draws new members, many veterans say the group's greatest value is its camaraderie and exchange of ideas. Dine Originals restaurateurs frequently refer customers to one another and eat at other member restaurants when they travel. During their four months together, Lathrop and the Von Rutenbergs shared recipes and taste tests in addition to kitchen counters. "We started to feel like part of their family," says Lathrop. Those ties remain: the Von Rutenbergs' restaurant now serves Lathrop's cheesecakes.