For Portland’s Hot Lips Pizza, sustainable values mean support of family, community

Portland’s Hot Lips Pizza is long on inspiration and innovation. The underlying mission is building a successful, sustainable business. It appears to be working. Owner David Yudkin operates five Hot Lips locations around Portland, serving up pizza and related dishes made from mostly locally grown ingredients. A tour of the commissary area in the rear of the Hawthorne Street headquarters reveals a host of locally sourced products, including Shepard’s Grain Flour from Eastern Washington. “We make every reasonable effort to run a business that reflects sustainable values,” Yudkin said. “What I’ve learned over the years is that sustainability is a quest. I doubt anyone out there is truly sustainable right now. Hot Lips is a green company, which to me means we’re doing something that’s less bad than what we did before. We are getting increasingly less bad as technology and methods improve.” Besides pizza, Hot Lips produces a line of fruit soda made from Oregon-grown fruit and lightly sweetened with cane sugar. The sodas have been recognized by The New York Times and also by BevNet, a leading beverage-oriented media company, which named Hot Lips soda as Best New Carbonated Beverage for 2010. The sodas are available in select Spokane-area grocery stores. Hot Lips was founded by Yudkin’s father-in-law and some partners in 1984. He and his wife got involved in the late 1980s and eventually took over the business in 1994. The first item on their to-do list was deciding how to operate a business that would support family and community values for the long haul. It didn’t take long to hatch a plan. “We heard a presentation by Natural Step,” Yudkin recalls. “They talked about building a roadmap to sustainable business. That meant we had to look at everything that flows through the company, what we buy, etc. So we looked at employees, plastic bags, ingredients, everything. I started visiting farms, building diagrams, making plans.” The first thing they decided to do is offer a rotating, seasonal menu. This evolved out of the idea that Hot Lips would buy ingredients from local farms, to the extent possible. Yudkin employs a full-time chef who puts together the seasonal menus. “If you buy local, you can’t get certain things year-round,” Yudkin said. “We discovered it’s difficult to dictate menu choices. Customers sometimes want what they shouldn’t want. Our solution has been to encourage people to buy things that are in season locally.” Perhaps the quintessential example is pineapple, which is flown in from Costa Rica, Ecuador or Hawaii and is carbon intensive. When Yudkin decided to eliminate ham and pineapple pizza, customers revolted. “I eventually gave in and put pineapple back on the menu,” he said. “But we encourage people to consider ham and pear pizza, which is local and really good. The goal is to get them to understand why local alternatives are reasonable, smart and good.” The intensive local angle is what brought about the desire to produce a line of fruit sodas. Oregon has long been a great place for fruit growing. Unfortunately, the state’s fruit isn’t grown for transportability, as is the case in California. So, Oregon growers have suffered in recent times. Enter Hot Lips and David Yudkin. “Why I should sell Coke products and send money to Atlanta? Why should I be a shill for corn sweeteners? I should be supporting farmers here, I thought to myself. We were buying other things from them and I asked them what we could do to support them more. They told me I could buy fruit from them.” He initially thought the soda investment would be small, but it’s turned into a pretty big commitment at this point and is part of the Hot Lips identity now. Production is doubling every year and Yudkin expects continued growth. “Our soda tastes really good and is pretty healthy,” he said. “Many fruit juices have more sugar content than our soda. Some people didn’t like the price, which is close to $3 a bottle. These are the same people who will spend that much or more on a latte. Eventually they came around to the idea that the price was okay given the quality of the product.” Indeed, quality is a prominent theme when Yudkin considers whether the sustainable business approach is working from a profit standpoint. “It costs more to do things the way we do,” Yudkin said. “We are profitable, sometimes more profitable than other times. Some things we would like to do from a sustainable standpoint we can’t do for financial reasons. Some things we’ve done we shouldn’t have done. And some things we support have no payback, but we support them anyway.” One thing the sustainable quest has done is differentiate Hot Lips from other pizza shops. Customers have come to expect fresh, local ingredients. Employees take pride in doing things the Hot Lips way. The turnover rate is low, 40-60 percent. “That sounds pretty bad until you realize the industry average is 300-400 percent,” Yudkin says. “I suspect the economy has contributed to our low turnover rate the last year or two, but it’s been historically low. The dough maker has been here 16 years.” Innovation has keyed Hot Lips success, whether from the standpoint of local ingredients or on-site refrigeration technology that saves energy and money. Yudkin believes these are important community values that must be shared. “When I first started looking at sustainability, I told people it was about quality, it was personal and that my competitors would never go there,” Yudkin said. “Almost instantly I knew there was something wrong with that statement. I realized that if only one pizzeria in Portland pursues sustainable values, it’s a waste of time. What really needs to happen is all restaurants need to work on those values. What we do needs to be shareware.” “My role at Hot Lips is to make sure we’re profitable enough that I’m covering the cost of the risk we’re engaged in. It can be scary. It’s a fluid thing. But it’s worth it.” There is more information on Hot Lips’ sustainability efforts, including the sourcing of local ingredients and the making of fruit sodas, on the company website: www.hotlipspizza.com.