Open Innovation Found to Be Basic Ingredient of Chez Panisse’s Success

In its 43-year history, Chez Panisse restaurant in Berkeley, Calif. has evolved as the purveyor of organic, local, and exquisitely prepared food known as California cuisine.

Its menu recently featured “grilled Wolfe Ranch quail with chestnuts” and “Comté cheese soufflé with DeeAnn’s garden salad.” Chez Panisse has been buying its quail from the Wolfe Ranch in nearby Vacaville for more than 20 years.

And DeeAnn Freitas is a local gardener who harvests her lettuce for Chez Panisse’s fresh daily garden salads.
Chez Panisse’s strategic use of branding its suppliers’ names on the menu is a prime example of the “open innovation” business model at work, according to a case study published in California Management Review

The case, “Chez Panisse: Building an Open Innovation Ecosystem,” was co-authored by Dr. Sohyeong Kim, a post-doctoral student at Berkeley-Haas; Haas Prof. Henry Chesbrough, who coined the “open innovation” term; and Alice Agogino, professor of mechanical engineering at UC Berkeley.

The authors found that owner Alice Waters’ success was built upon a community of collaborators — employees, suppliers, customers, and even competitors — in which all participants benefit from sharing ideas and building relationships with external teams.

In 1971, Alice Waters set out to reform the way Americans eat at a time when fast food and packaged food convenience reigned. Waters wanted to create a place where people could eat simple, fresh food made with local ingredients.

Chez Panisse’s “open kitchen” model fostered a hearty exchange of ideas and brought chefs and diners together. Waters began communicating a shared vision of the local food ecosystem with suppliers and farmers. Waters talked about taste and quality rather than a crop’s size and price. As the buzz spread, suppliers began sending Chez Panisse whatever fresh ingredients they had.

The open innovation culture also grew from trust. In the case study, Kim and Chesbrough write, “Alice Waters has a management style that can only be described as ‘very Berkeley’, but that approach has meant the staff feels immense loyalty to the restaurant and to one another.” For example, former Chez Panisse busboy Steven Sullivan founded Acme Bread that became the restaurant’s bread supplier – 31 years and counting.

Competitors became collaborators. The open innovation ecosystem extended to involving culinary artists and food journalists, and listening to customer feedback.

In 1996, Chez Panisse’s ecosystem went global. Alumni chefs opened their own restaurants around the world. The Chez Panisse Foundation launched the Edible Schoolyard Project, which uses gardens and kitchens as interactive classrooms. Waters also forged new relationships with international culinary institutions and corporate partners to serve organic, seasonal foods in the workplace.

The case study concludes that Alice Waters’ open innovation strategies made her a cultural entrepreneur and created an “ever-growing global ecosystem” in the world of slow, sustainable food.

Prof. Henry Chesbrough