North Berkeley hidden gem Imperial Tea Court quietly closed on Aug. 28 after 16 years in business, as Nosh noted earlier this month. The breaking point for the business wasn’t supply chain problems or a shortage of customers, owner Roy Fong said. Instead, he said that an inability to attract reliable employees was to blame.
The restaurant, tucked behind the Epicurious Garden food hall on the same North Shattuck block as Chez Panisse, offered artisanal Chinese tea, dim sum, hand-made noodles and other snacks. It attracted visitors from around the world as Fong, an ordained Daoist priest, is one of the biggest names in tea in the U.S.
Prior to opening the first Imperial Tea location in San Francisco’s Chinatown in 1993 — said to be the first traditional Chinese tea house in the country — he was a wholesale tea importer selling to restaurant distributors. Fong’s well-regarded book on tea farming, brewing and culture was first published in 2009, then expanded last year. Fong still makes multiple trips to China yearly to source pricey pu’er tea for his restaurant, mail-order and wholesale businesses, which he then stores in a warehouse and monitors as it ages to perfection.
Fong said that business had picked up as COVID-19 pandemic restrictions subsided, but he and his wife, Grace, struggled with employees for a variety of reasons. According to Fong, his employees were reluctant to work more than a handful of hours per week in order to still receive unemployment benefits — or asking to be paid in cash — and couldn’t be relied on to report to work.
“Their attitude was that ‘I could walk out of here unless you do this and this and this for me,’” Fong said. “We were not going to do all those things that they wanted, so we decided to close.”
“Employees just became so difficult,” Fong added. “I’ve been in business since I was 21 years old; I’m 65 now. I’ve never seen anything like this.”
Staffing issues have beleaguered restaurants nationwide throughout the pandemic — more so than any other industry. In January, the National Restaurant Association reported that 62% of fine dining operators and 54% of both family dining and casual dining operators said that staffing levels were more than 20% below normal in 2020.
But the reasons behind the dropoff are multifaceted, including the challenges around creating COVID-safe conditions in generally confined restaurant spaces, lower tips due to decreased patronage, and an influx of impatient customers once establishments began to fully reopen. On top of those factors, since long before the pandemic, the work is infamously grueling and reports of exploitation and abuse from managers and owners are rampant.
Multiple studies have found, however, that the increase in unemployment benefits through the CARES Act generally did not lead to decreased employment in the United States.
Fong, himself, has acknowledged in the past that he struggled with personnel oversight, telling the San Francisco Business Times in 2009 that his “most challenging task” is “managing people. I’m not very good at it.” In that same interview, Fong said that even then, Imperial Tea House didn’t “have the staff that can do all the things that need to be done,” and that his biggest frustration was “dealing with management skills” as “I’d like to manage our staff to be more efficient.”
Fong also acknowledged to Nosh that his expectations for new employees might have made it tougher to find workers qualified to work at Imperial Tea Court. “Our cooking is a little bit specialized in a modern Chinese home-style,” Fong said, “so that makes the pool of people you could hire a little bit smaller.”
As a result, Fong said, Grace was in Berkeley every day, “doing the work of two people.”
“Me and my wife were just killing ourselves to cover for employees all the time,” Fong said. “Employees always just took off whenever they want, and we don’t have any life. All we do is cover for them, on top of our own work, on top of us having to pay for everything.”
The decision to close came despite a “helpful” landlord who lowered the restaurant’s rent on its now month-to-month lease and forgave deferred payments. Imperial Tea also received a Paycheck Protection Program loan, without which it may have closed earlier, Fong said.
“I don’t think it’s all everybody else’s fault. Some of it is our fault. We could be better managers. We could be better prepared. I’m sure there’s a million things I could have done better,” Fong said. “It’s just that the time has come that my health and employee situation and the pandemic all acted together, and the fact that our lease is up. So we just decided to take a bow while we were still sort of not at the bottom of the barrel there.”
There’s a second Imperial Tea location in San Francisco’s Ferry Building, which has had better luck retaining and replacing workers. Building management has been proactive in helping merchants replace employees when needed, according to Fong, and also lowered rent through the end of the year.
That location is not in immediate jeopardy of closing, but Fong said they’ll reassess in a few months.
Further exacerbating the issues is price inflation on produce and other materials, with the restaurant sometimes doubling or tripling costs from week to week. “We almost cannot forecast what our costs will be,” Fong said.
Once they announced the decision to close, the Fongs saw an outpouring of support from patrons, some of whom — along with some employees — asked them to reconsider.
“It was sad and also heartwarming at the same time. I have a lot of emails from people I haven’t heard from for years to show encouragement,” Fong said. “We’re sad that we have to close after 16 years, but we’re also relieved because we just don’t want to fight this sort of mini war with our employees any more.”
As for what’s next, Fong isn’t yet sure. His well-documented effort to start California’s second tea farm was put on pause when a fire destroyed “millions of dollars of inventory,” burning down his green house about four years ago. He said the incident was caused by “employee negligence.” Fong also has some real estate investment businesses, but they’re not his “passion,” he said.
Now, after the fire and a heart attack, Fong is looking to scale things back.
“All of these factors … if I was 30 years old, we wouldn’t have closed the store. When I was younger, I would not even consider it. I just feel like at a certain age, you need to start to live a life,” he said. “Being upset over things you can’t control, it’s not worthwhile.”
He and Grace want to open another storefront, but a much smaller location in San Francisco or the East Bay, where they can personally greet and educate every customer. The duo ran their original San Francisco location entirely by themselves for the first few years.
“Tea is my life. I fell in love with tea in my late teenage years and I never looked back,” Fong said. “I don’t think this is a hope or a dream that I’ll give up and I don’t know how soon that would happen, but that’s where my heart always has been and always will be.”