Cautious strategy helps Thai food chain survive and thrive

Recipe for success in food industry is to diversify

A fascination with Thai cuisine, a desire to bring something new to Irish customers and the willingness to take risks led to the establishment of Diep Le Shaker, the Dublin restaurant business celebrating 15 years ago this May.

Fast forward in time and it is the entrepreneurial drive of founder Matt Farrell snr, the involvement of his adult children in the business and the opening of further Diep outlets that reflects the company embracing the future.

Farrell's introduction to Thai food was while working as a stockbroker in London in the 1980s. "I loved food all my life, [and] my mother was a great cook. I found Thai food fascinating," he says. Some years later, when his insurance business in Zurich was bought out, he came home to Ireland and entered the food business.

It was a risk, he says. “Out of every 10 restaurants that open, eight will fail within 10 years.

“My thought process at the time was to build something really new, something that Dublin hadn’t seen before.”

His timing couldn’t have been better – it was 1999 and everyone wanted to be seen having a good time in the plush surroundings of restaurants such as Diep Le Shaker, l’Ecrivain and Chapter One. Farrell had enough nous to grow the business beyond the four walls of the restaurant.

“There was a huge element of false prosperity in hindsight but they were very good years,” he says. “I was also wary of what was happening, which is what led to the development of the Diep At Home concept.

“The restaurant industry is fickle at the best of times . . . I always felt that to be secure we needed more than to be a restaurant . . . ” In 2006 the family opened the first Diep At Home in Ranelagh.

There are now 10 Diep outlets employing 140 staff, including 40 Thai chefs. There is the original Diep Le Shaker restaurant, two Diep noodle bars (including one at Terminal 2, Dublin Airport) and seven Diep At Home outlets. There are plans to expand beyond the capital this year.

“Once you start something like that you feel the need to continue it because the demand is there, the product is there, the quality is good. I see ourselves as at the forefront of Thai food development in Ireland,” says Farrell.

He says it has been “a very tough journey since 2008”. Some of the greatest challenges have been the cost of rent, rising rates and retention of staff. As Thai food became more popular, Farrell says that rivals began poaching staff. There was also a long-running court case between Renee ffrench O’Carroll and her son Arthur over the building in which Diep Le Shaker is located.

From 2008 to 2011 revenues and cash flow at Diep were significantly weakened and the business had a hard time pulling through. Diep Noodle Bar in Ranelagh was forced to close in 2011 because of unsustainable rent costs and falling revenues. Significant restructuring of labour and internal systems was undertaken in 2011 and, with the support of its creditors and the banks the business survived. Finding good partners to expand Diep has been a major part of the survival of the brand and the number of Diep outlets has expanded from four in 2010 to 10 to date this year.

“From the beginning we have crawled cautiously out into the open [and] we are still doing so. If we had been very overexposed when the [economic] meltdown happened we would be in a very different place than we are today.

“The fact we had Diep At Home was an enormous help to the business overall, aiding cash flow when dining in was almost frowned upon in Dublin,” says Farrell.

All three of his children are involved in the business, in particular his son Matt jnr, managing director and financial controller, and his daughter Alexandra, a director whose focus is the Diep Le Shaker restaurant that was recently awarded the Thai select premium award at the Thai embassy in London.

Farrell jnr says his focus currently is on maintaining quality as the business expands, making food provenance more visible to customers and developing, with his father, a retail side to the business. The company has just finalised a complete nutritional analysis of its menu with nutritionist Paula Mee.

Farrell jnr says his father has taught him to be resolute – to make a decision and stick to it. His father says he has passed over more of the day-to-day running of the business to this “heir to the overdraft” and “daughter to the overdraft”.

“There are days I wake up thinking am I completely mad that I have three of our children involved in the business and days I think it’s wonderful.

“It’s walking a tightrope in a way because you often wonder if you are doing the right thing,” says Farrell snr. “It’s interesting, it’s challenging and it’s hard work, but overall we’re open 15 years so it’s worked.”