Tips From a 104-Year-Old Food Business on Staying Relevant

When Niki Russ Federman and Josh Russ Tupper took ownership of the renowned Russ & Daughters store on New York City’s Lower East Side, they became the fourth generation of the same family to run the business.

The challenge for the cousins was how to maintain the legacy of a business that had been operating for 104 years, but also how to bring the concept to a bigger audience.

The only way customers were able to eat at the original store was by grabbing a seat on the bench outside, so the pair set about devising a plan for expansion.

“Having a sit-down restaurant just felt like an organic next move,” Russ Federman said Monday at Skift Restaurants Forum in New York City

Russ & Daughters now has a cafe close to the original store, a restaurant and take-out counter at the Jewish Museum on the Upper East Side, and is close to opening a huge new space in Brooklyn.

“Our original store is the center of inspiration and a reference point for everything we’ve done since,” said Russ Federman.

Maintaining a link with the past but also making sure the business evolves, is an issue the pair continue to wrestle with.

“People do not want us to change, Russ & Daughters is a weird anomaly in New York and our modern day culture,” she said.

But for Russ & Daughters this is actually an asset and is one of the reasons why it has been able to grow.

“Millennials want to really seek out places that have a genuine legacy. They want to tap into this, they want to have an experience that can’t be mediated through a screen,” Russ Federman said.

“We’re speaking to what we know, what we’ve done for 100 years,” Russ Tupper added.

The pair admitted they had almost made a mistake when opening their first stand alone restaurant. They were close to signing a lease on a space in Chelsea but realized they needed a location much closer to the original store.

“It crystalized for us that the Russ & Daughters cafe had to be on the Lower East Side,” Russ Federman said.

Read More Recaps and Interview Transcripts From Skift Restaurants Forum

[Updated with full transcript]

Full Transcript of Discussion With Russ & Daughters Co-Owners

Skift Table: I’m here with Niki and Josh. They are first cousins and fourth generation co-owners of Russ and Daughters, an incredibly famous Jewish appetizing shop on the Lower East Side. It’s been in operation in some form or another since 1914, so that’s 104 years of operation.

Niki, Josh, I want to start out by saying thank you so much for joining us today. I know these past couple of days haven’t been easy.

Niki Russ Federman: Yeah, we lost our grandmother a few days ago. She is the fourth, last, of the surviving daughters of Russ and Daughters. She was 97. So she was definitely one of a kind. We are still remembering her, celebrating her. So we’re going to go from here to the shiva afterwards, tonight.

Skift Table: And you were telling me backstage that people are a little nervous about…

Russ Federman: If you’ve been to a shiva, you know the tradition. It’s customary that people bring food or send food to the grieving family. But in our case, I heard from several people who said, “I was really intimidated. I didn’t know what I could possibly bring to the Russ and Daughters family shiva.”

Because typically you’ll bring …

Josh Russ Tupper: Russ and Daughters.

Russ Federman: Russ and Daughters. Like bagels, smoked fish, you know. So someone said, ‘I was going to bring kimchi, because I couldn’t think. I wanted to bring something that wouldn’t be on the table.’

Russ Tupper: Someone brought an apple pie. It’s sort of like, ‘Should I give this to them?’ And we had a spread of our own food.

Skift Table: All right. Well, Russ and Daughters is such a storied brand with such a long history. But since you both have taken over ownership in 2009?

Russ Federman: Mm-hmm [affirmative].

Skift Table: 2009. It’s expanded a lot. You know, you have a full-service restaurant just down the block. You have a restaurant and a takeout counter inside the Jewish Museum on the Upper East Side. You have your own bakery. And you work on your full-blown production facility inside the Brooklyn Navy Yard.

So I’m curious. Did you know that you wanted to do all of this expansion from the get-go?

Russ Federman: Well, I think when we came together as a team, we knew that the original story, as beautiful of a gem as it is, was sort of missing part of the experience. People increasingly wanted to come to Russ and Daughters to eat Russ and Daughters, and they couldn’t do that at the store. Other than just sitting on the bench outside.

And so having a sit down restaurant just felt like an organic next move.

Russ Tupper: Also the office was too small for the both of us. Back of the store.

Russ Federman: Yeah. And we literally had customers who would walk into our shop and walk into our kitchen, because they just assume there must be tables back there.

Russ Tupper: “Where are the seats?”

Russ Federman: “Where are the seats.” But we weren’t restaurateurs. So first we had to actually look at our shop and our business as it was, and improve the systems. We literally inherited a mom and pop.

My mom and my pop ran the store. And so we made changes that hopefully our customers wouldn’t even notice.

Skift Table: Like what?

Russ Federman: Like a POS [point of sale] system and our HVAC [heating and air conditioning].

Russ Tupper: The most frightening change we ever made was a reach-in refrigerator. We had this old sliding door, stand up refrigerator that was pretty old and didn’t work very well and it was hard to see anything in it.

And like Niki said, the ideal change and development and improvement of the business would happen without any customers noticing it. So we put in this big reach-in refrigerator. We took down a whole wall of all the things we have on the shelves and put in this reach-in refrigerator.

Customers came in [and we asked] ‘What do you think?’ And they said, ‘What do you think of what?’ I was like, ‘Of the new refrigerator.’ Like, ‘What new refrigerator?’

Skift Table: I’m surprised, because your customers would know.

Russ Federman: They know, and people do not want us to change. You know? Russ and Daughters is this weird anomaly in a city like New York and our modern day culture where we kind of look for things to constantly change and be new and different.

People don’t want change at Russ and Daughters. So we actually really felt stressed out, frankly. Like well, if we open this restaurant, how is it going to be received?

And it was interesting. We actually went and talked to a lot of our peers who are very well known, successful restaurateurs, and a bunch of them actually tried to dissuade us. But the best piece of advice we got was Russ and Daughters Café is going to be a huge success, as long as you don’t forget who you are. Stay true to what Russ and Daughters is and it’ll be a success.

That’s what we always go back to. Our original store is the kind of center of inspiration and a reference point for everything we’ve done since. So we always look back to that store.

Not to try to recreate it, because you can’t. You can’t make a carbon copy of 104 years of living history. That would just feel like trying to make like the Disney version of Russ and Daughters.

But we look to that shop as how do we stay true to Russ and Daughters.

Russ Tupper: It’s like the epicenter of the soul, or the idea, of what Russ and Daughters is. We always go back to the shop to say how should we design this new retail counter in the Navy Yard. You take elements of the shop, but not a duplication, not a replication.

Skift Table: How long did it take from the point where you first opened the restaurant to when you saw success and you’re like oh, okay, this is all right.

Russ Tupper: Not very long. Obviously we had some debts so it wasn’t, you know. But in terms of getting in the black, it was just three months.

Russ Federman: Three months, yep. Yeah. Which is very unusual.

Russ Tupper: Very unusual.

Russ Federman: We had literally four generations worth of customers, and the challenge, as I said, was to make sure that they felt like this was their place. Because people feel this incredible ownership of Russ and Daughters.

And just even within the friends and family, the kind of general response we got was, what took you guys so long? We waited 100 years for this. You finally opened a restaurant?

Russ Tupper: There was some skepticism going in, from quite a few customers. What are you doing? You’re not restaurateurs. Why would you open a restaurant?

And we’re like well, you know, we think it’s appropriate and we want to offer that experience and curate that sit down experience how we see it should be done.

And the reception was very good.

Skift Table: What about the reception from your family? What does your family think of what you’ve done?

Russ Federman: You know …

Russ Tupper: Similar.

Russ Federman: Yeah. It’s interesting. So our grandmother, who just passed away, of all people was the most supportive. And you have to realize that she was basically forced to work in the store starting at the age of 14. She wasn’t allowed to go to college. Even her husband had to be approved to be a good worker.

So Russ and Daughters for her was not a choice. For her to see her grandkids choose to do this and choose to grow it, she was our biggest cheerleader.

My father, who ran the shop with my mother for 30 years before us, was the most skeptical. Because he was there in the period when the Lower East Side of Manhattan was nowhere anyone wanted to be. Running a food business was … there was nothing glamorous. There was no Skift Forum, there was no Food Network. It was just a terrible grind.

And so he was kind of very risk adverse. So he was really concerned that we were going to take Russ and Daughters and somehow dilute it or ruin it. And that the legacy would, you know, be gone.

Russ Tupper: He still talks about cannibalizing our customers.

Russ Federman: Yeah. But now he’s changed, he’s done a 180 and he likes to come into the restaurant and sit down and schmooze with his customers, and then say like, “Put it on my tab.” And then walk out.

Skift Table: Speaking of your dad, I’ve seen him hanging outside the shop when I’ve been there, talking with customers, having a great time. I’m curious is he still involved in the ownership decisions that you make?

Russ Federman: We like to say that the secret to keeping a multi-generational family business alive is limiting the number of family involved. So it’s just two of us.

Russ Tupper: He certainly offers up suggestions and support and comments, about what he thinks about everything. And anything.

Skift Table: I’m sure. Was it challenging, especially in the beginning? Given that you had to draw a line in the sand there and say no, we’re …

Russ Tupper: Well, that transition from him owning and operating this business for 30 years to me starting to take control of the business and then Niki came in and we together started taking more control of the business, was a very long process.

And I would imagine a very difficult process for Mark, because that was his life. It was our grandmother’s life. It’s what they did. And to stop doing that is not like a switch that you turn off.

As I took more and more control of what was going on and Niki, we together took more of our control, he sort of inched away. And by 2009, 2010, he felt comfortable that we had the business’ best interest in mind and would benefit the business more than he could at that point.

And still, it took a little time.

Russ Federman: Yeah.

Russ Tupper: It was a hard adjustment. Yeah.

Skift Table: Okay. I want to talk about the staff in the shop. Some people have been with you for a very long time. Is that right?

Russ Federman: Yes. We joke that if you’ve been working at Russ and Daughters for less than 10 years you’re still in training. And we have customers who will walk in and they’ll be very … have this look on their face that’s like, what’s going on here? It’s all new faces, all new faces behind the counter.

And we’ll realize they’re talking about one person and that person has already been working here for like eight years.

The stability of our staff at the shop is really part of that continuity that Russ and Daughters provides. The continuity of the place, the food, the smells, and the people on both sides of the counter.

Now, within four years starting from 2014 till now, we’ve grown from 20 employees to 120 employees. And so now, having restaurants, and a bakery, shipping facility, we have kind of a diversity of staff.

Some people are, you know, hopefully going to be with us for 20 years. And then other people are much more transient. So for us it’s kind of brought in, as employers and people want to provide experience, it’s been an interesting development for us.

Russ Tupper: We need to figure out what keeps these employees in Russ and Daughters for so long.

Russ Federman: Yeah.

Russ Tupper: Because restaurants are quite different, the bakery’s different. There’s a lot more in and out and turnover of employees.

Our theory is there’s something beyond the physical, the food, and the look of the place. It’s a hundred year-old business that we’ve tried to hold on to that connection to the history. And there’s the soul of the place like lives beyond like anything we could describe or be. And the employees actually feel that and it’s like really welcomed into this family experience.

Skift Table: Do you have legacy employees situated in each different outpost that you do? No?

Russ Tupper: No.

Russ Federman: No.

Russ Tupper: We considered taking employees from the store and putting them in other places, but in part the employees were like, “Eh, I don’t really want to do that.” The epicenter of our business is the store. And we don’t want to affect that at all. So to pull out discontinuity and these old employees from the store would change the dynamic and the feeling of that place.

That’s the most important thing to us.

Skift Table: Right. Because you have the customers who have been coming there for so long, having the same people work with them. Yeah.

Russ Federman: I see some of them in the room.

Skift Table: You do have customers who have been coming for 50, 60, 70 years. You know. I was in the shop on Saturday and I would see people my age also grabbing their bagels and lox, Instagramming it. So how do you speak to such a wide breadth of customers?

Russ Federman: I think the fact that Josh and I are there and people see a younger generation who have chosen to do this work, and has sort of inspired a younger generation of customers. And I think there’s a real interest, you know, millennials and whatnot, to really seek out places that have a genuine legacy.

They want to tap into history. They want to, you know, have an experience that can’t be just mediated through a screen. And the fact that young people will come to Russ and Daughters, take a number, wait in line, sometimes for a very long amount of time, or wait for a table at Russ and Daughters Café for up to two hours, is remarkable to me.

And an affirmation that there’s something very true, or deep, to our experience as people that we want to be in a communal setting and we want to feel like we’re part of a continuum of history and lived experience.

And for young people who could just get on their phones and order with a click, that they’re coming and they want to be part of Russ and Daughters tells me that hopefully we can keep going for a fifth and sixth generation.

Russ Tupper: You say how do we speak to the different generations and along with all that stuff, when we sit in a room and talk about merchandising or something set for quality, we’re not speaking to anyone. We’re speaking to what we know and what we’ve done for 100 years. And maintaining that continuity and quality.

We’re happy that it’s enjoyed by all generations. But we’re trying, in everything that we do, to stick to tradition and what we’ve done for a hundred years, and maintain that.

Russ Federman: But it’s this kind of dance that we do, this kind of interesting challenge we have. Which is how do you maintain 104 years of tradition, but also keep it moving forward. And also innovate.

And I think to do one of those separately is kind of more logical. We have a challenge of having to do these two seemingly incongruous things at the same time. And so there’s that … this is the question comes up in every decision we make, from like what place are we going to put in to use at the restaurant, to how do we just refine our babka recipe.

We’re trying to walk this very line, because we can’t move so far ahead that we alienate our customers who have 100 years of history with us and demand that the babka taste the same way it did when they were a kid. Right? At the same, you know, you can’t just be stagnant and just stay the same.

Russ Tupper: To bring it all the way back around, the change in the store, the innovation that Niki and I talk about constantly, is imperceptible change, to the public and everyone around us.

But, behind the scenes everything is constantly changing, getting more organized.

Russ Federman: But even the imperceptible changes, like opening an Upper East Side location, after 100 years of just being in Lower Manhattan, we went uptown, opened Russ and Daughters at the Jewish Museum. Now opening in Brooklyn at the Brooklyn Navy Yard. Our bakery is going to be on view to the public, with an adjoining shop and counter.

Skift Table: Something like 18,000 square feet?

Russ Federman: Yes. We built out 18,000 square feet of our backend. Baking, shipping, food making, offices. Like that’ll be our base for years to come. But even that, I think with each change the test or the proof for us that it was the right move is when someone says to us, “That makes sense. Of course you would do that.”

And then we know we’re still staying in line with what Russ and Daughters is. But also taking a next step.

Skift Table: Was there a time that you made a mistake? Had to roll something back?

Russ Federman: We almost made a mistake, when we were about to sign a lease for Russ and Daughters Café. And it was going to be in Chelsea. Because we had toyed with the idea of like okay, we’re going to open a restaurant and maybe we should move outside of the Lower East Side.

It was the night before we were going to sign the lease for this big space in Chelsea, and I kid you not, I was starting to have like a panic attack and just think like this is not right, this feels wrong to me.

And Josh called me on the phone, he said, “This isn’t right.” And I think it crystallized for us that the Russ and Daughters Café had to be on the Lower East Side, because the Lower East Side is such an integral part of the experience of our food and the Jewish immigrant history.

And so many of our customers trace their family roots back to this one neighborhood in Manhattan. And so our sit-down restaurant had to be as close to the store as possible.

So I’m so glad we didn’t make that mistake. And having done that, then when we considered opening on the Upper East Side, it felt like we could do that. So.

Skift Table: All right. I want to grab an audience question here. I like this one. Will I always have to take a number?

Russ Federman: Yes.

Skift Table: Why?

Russ Federman: Yes. When you come to the Brooklyn Navy Yard, you will have to take a number. But that’s part of the experience, right?

Russ Tupper: How else would it be done?

Russ Federman: We’re not going to give you one of those buzzer things.

Russ Tupper: There is a story. Pre numbers was like a free for all.

Russ Federman: Oh yeah. It was called the ‘see you’ system. So countermen would have their favorite customers and customers would have their favorite countermen. And so when you’d walk into the store, you’d make eye contact with the counterman and he would say, ‘I see you.’

And then he would have to kind of just remember the order of who he was going to help. But you can imagine when it got busy it just turned into probably a riot.

Skift Table: Has the explosion in popularity of modern Jewish food across the country been surprising to you?

Russ Federman: Yes and no. You know, we get asked a lot like how does it feel to be part of a trend. Jewish food is so trendy now.

And, you know, we don’t see it that way. From our vantage point, our family has been serving Jewish food … I don’t know if you can call 104 years a trend, right? And we were doing it long before it was every popular. It was really just to sustain poor immigrants and provide them the food that reminded them of home.

Trends inevitably come and go, and we will still be doing this when something else is trendy.

Russ Tupper: The short answer is no, it hasn’t been a surprise. Because we appreciate and love Jewish cuisine and it’s been our life for so long. We’re … about time, it should …

Russ Federman: I will say one thing that has been surprising and sort of hard to grapple with is we have seen quite a number of Russ and Daughters copycats pop up. Not just all over the country, but internationally.

And I know you’re supposed to think that imitation is the sincerest form of flattery. But, you know, when you see something that is just clearly, you know, just a pure plagiarism, it kind of hurts. It’s like a punch to the gut, because this is what our family has done for a hundred years. It’s been our survival.

Russ and Daughters has just lived organically. And I think in this day and age when there’s Pinterest and you can just pull your inspirations from here and there, people don’t realize that no, that’s copying. You know? I want people to go out and maybe be inspired by what we do, but then put their own spin on it.

So that’s been hard and we’ve struggled with how we address that.

Skift Table: Rest assured, the fish will never be as good as what you’re doing.

Russ Federman: People can tell sort of, and are looking for authenticity, right? So I think people will know, and we trust that.

We just keep doing what we’re doing and keep our heads down. But that has been a surprising like oh, I didn’t realize that would happen, aspect of our growth.

Skift Table: All right. Well, looks like we’re out of time. Thank you so much for joining us.

Read More Recaps and Interview Transcripts From Skift Restaurants Forum