Image source: Wasserstrom
Robots: Over the past few years, the hospitality sector—and restaurants in particular—has changed its approach to include more technology.
More AI has recently been included into restaurant operations.
For instance, Chipotle Mexican Grill is experimenting at its locations whether robots can create tortilla chips.
Meanwhile, two branches of Sweetgreen plan to have their salad-making automated.
Starbucks wants to modernize its coffee-making machinery to reduce the burden of its baristas.
The progress so far
The restaurant sector announced various automation plans in 2022.
The decision was made as a result of operators frantically trying to find answers to the shrinking staff and rising wages.
However, throughout the year, efforts have fluctuated.
According to experts, it will be years before using robots pays off for businesses or replaces employees.
Principal of the restaurant research company Technomic, David Henkes, said:
“I think there’s a lot of experimentation that is going to lead us somewhere at some point.”
“But we’re still a very labor intensive, labor-driven industry.”
Early struggles
Before the pandemic, it was difficult for restaurants to recruit and retain staff.
The pandemic only made the problem more noticeable, and those who were laid off looked for other employment.
According to the National Restaurant Association, three-quarters of restaurants are unable to operate at full capacity because of a lack of qualified employees.
Restaurant owners raised wages to attract staff, but as food prices rose, it also put pressure on earnings.
Startups that specialize in automation offered themselves as the solution, claiming that robots can do jobs more reliably than exhausted humans.
They added that drive-thru orders can be entered into computers more accurately thanks to artificial intelligence.
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Automation
In 2022, Miso Robotics, which raised $108 million in November, made the majority of the announcements.
Their $523 million valuation were confirmed by Pitchbook.
The most important creation of the company is a robot called Flippy.
For a monthly rental cost of $3,000, Flippy may be set up to cook burgers and make chicken wings.
White Castle vowed to adding 100 more Flippy models as it renovated four branches.
Chipotle Mexican Grill is now testing a new tortilla chip robot called Chippy at a location in California.
Mike Bell, CEO of Miso, said:
“The highest value benefit that we bring to a restaurant is not to reduce their expenses, but to allow them to sell more and generate a profit.”
However, after more than a year at Buffalo Wild Wings, Flippy has struggled to move past the test phase.
Other progress
Miso is one of the privately held startup companies Inspire Brands said it collaborated with to automate frying chicken wings.
Startup Picnic Works sells equipment for topping pizza with sauce, cheese, and other ingredients.
In Berlin, a Domino’s franchise is now testing the technology.
The monthly rental rate for Picnic Works’ equipment is $3,250 as a starting point.
According to CEO Clayton Wood, the technology is more accessible to smaller businesses thanks to the subscription.
Picnic Works raised $13.8 million at a $58.8 million value, according to Pitchbook.
In the meantime, Panera Bread has been doing automated tests using AI ordering software.
In order to enhance the quality of the coffee, it also contains a Miso system that tracks temperature and volume.
“Automation is one word, and a lot of people go right to robotics and a robot flipping burgers or making fries,” said Panera Bread chief digital officer George Hanson.
“That is not our focus.”
Despite the advancements, success is not assured.
Zume stopped using robots to prepare, cook, and deliver food in the beginning of 2020.
The business instead concentrated on food packaging.
Labor
Workers and labor advocates frequently criticize the use of robots and automation in the workplace because they see it as a way for employers to eliminate jobs.
Restaurant businesses, meanwhile, have touted their experiments as a means of enhancing working conditions and reducing more difficult jobs.
Next year, Sweetgreen plans to build two locations, where they’ll use technology developed by startup Spyce to automate the salad-making process.
Nic Jammet, co-founder and CCO of Sweetgreen, claims that the new restaurant model reduces the number of employees needed for shifts.
Jammet emphasized greater employee satisfaction and lower turnover rates as secondary benefits.
Casey Warman, an economist at Dalhousie University, predicts that the industry’s inclination for automation will result in a permanent reduction in the workforce.
“Once the machines are in place, they’re not going to go backwards, especially if there’s large cost savings,” said Warman.
He added that the pandemic played a significant role in reducing resistance to automation.
Consumers became familiar to grocery store self-checkout lanes in the early stages of the pandemic and depended on mobile apps to place their food orders.
Dina Zemke, an assistant professor at Ball State University, researches consumers’ attitudes of restaurant automation.
Zemke observed that because of a labor shortage, customers were tired of restaurants’ shortened hours and sluggish service.
According to a third-quarter Technomic survey, 22% of more than 500 restaurant owners stated they were spending money on technology that would reduce the need for kitchen workers.
In addition, 19% of households adopted labor-saving technologies for tasks like ordering.
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Skepticism
Although automation has advantages, it is yet to be seen whether any cost savings will actually occur.
Years ago, McDonald’s purchased the AI startup Apprente and began testing order-taking software for drive-thrus.
The fast food business sold the division to IBM in a collaboration to advance the technology months after announcing the test.
The voice-ordering program fell short of the desired 95% accuracy in more than twenty Illinois test branches, with a low accuracy of 80%.
Chris Kempczinski, the CEO of McDonald’s, spoke about automation over an earnings call this summer.
“The idea of robots and all of those things, while it maybe is great for garnering headlines, it’s not practical in the vast majority of restaurants,” said Kempczinski.
“The economics don’t pencil out. You’re not going to see that as a broad-based solution anytime soon.”
Automation has greater potential for minor activities, though.
Jamie Richardson, vice president of White Castle, claimed that modifications like Coca-Cola Freestyle machines had a greater effect on sales.
“Sometimes the bigger automation investments we make aren’t as earth shattering,” said Richardson.
Reference:
Why restaurant chains are investing in robots and what it means for workers
