If you can make bread in Ohio, but the people will only pay $1 a slice, there is no way your margins will support you buying a $100,000 oven to bake in, fresh grains to mill yourself, and a highly-educated person to reason out modern recipes. You have to compete with Safeway. Same with espresso & espresso machines.
If you can sell your bread for $4 a slice in SF, all of a sudden (even with the high rent), you can now afford those very real improvements to the art. There are lines out the door at The Mill - and the very reason this story was written was because they are selling their wares at market ranges. But they're selling wares produced with top quality resources, produced by top quality artisans.
The beauty of The Mill, mentioned - is the baking is done all in the open in front of the customers. If they tried to use substandard ingredients, honey not from local farms, a poorly functioning oven, or otherwise tried to reduce their quality to what is found elsewhere their customers would not return. At the end of the day, the margins are probably similar, but you have a lot more capital to work with in SF.
Median HHI in San Francisco is only 37% above the national median, so you're not getting away with charging 4x as much for bread (though your rent may easily be that much higher).
Also, a $100k oven and "highly-educated" bakers sounds more industrial than artisan... Manhattan has far more and far richer rich people than San Francisco, and I can't think of anyone there who would say that the best bread in the city is at some high-end place that can afford expensive equipment. And New Yorkers love to overpay for things!
The same happens in Japan: expensive but every bar has a wood fired pizza oven, every Indian restarsunt has a wood fired naan oven, ... The food is just so good there, they don't cut corners at all.
After living abroad, SF is a great value for anything other than rent.
I think restaurants in Japan are often great+ because Japan has an extraordinary service culture. They try. Just giving a tiny little bit of a damn goes a long way...
+ There's obviously tons of pedestrian/fast/chain/meh food in Japan, but even that stuff is generally a few notches above the same thing in the U.S. Even U.S. branches of Japanese chain restaurants generally seem far worse than the home branches...
It is not just service culture, it is competition, high expectations from consumers, and the ability to invest in equipment that goes along with high prices.
I agree with the first two, but I don't think expensive equipment is really much of an influence -- a lot of small restaurants (and bars etc) in Japan turn out amazing food with little more than a hob and a frypan, and indeed that seems more the rule than the exception.
[Of course, higher prices also can help pay for higher-quality ingredients, which do play a part.]
Not everyone puts capitalism ahead of their passion. Many small business owners got into doing what they do because they are passionate about making whatever it is they make or providing whatever service they really care about. When that happens, you get an individuals that is capable of balancing his own economic interest with his own interest for self-actualization.
If you can sell your bread for $4 a slice in SF, all of a sudden (even with the high rent), you can now afford those very real improvements to the art. There are lines out the door at The Mill - and the very reason this story was written was because they are selling their wares at market ranges. But they're selling wares produced with top quality resources, produced by top quality artisans.
The beauty of The Mill, mentioned - is the baking is done all in the open in front of the customers. If they tried to use substandard ingredients, honey not from local farms, a poorly functioning oven, or otherwise tried to reduce their quality to what is found elsewhere their customers would not return. At the end of the day, the margins are probably similar, but you have a lot more capital to work with in SF.