Restaurant chains are investing in robots, bringing change to workers

TECHNOLOGY
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A member of the White Castle team alongside Miso Robotics’ Flippy.

Courtesy: Miso Robotics

Mexican Chipotle BBQ is testing whether a robot can make tortilla chips in stores. sweet green plans to automate salad production at at least two locations. AND starbucks wants its coffee-making equipment to lighten the baristas’ workload.

This year has brought a flurry of automation announcements across the restaurant industry as operators scrambled to find solutions to a shrinking workforce and rising wages. But efforts have been patchy so far, and experts say it will be years before robots pay off companies or displace workers.

“I think there’s a lot of experimentation that’s going to get us somewhere at some point, but we’re still a very labor-intensive industry,” said David Henkes, director of Technomic, a restaurant research firm.

Even before the pandemic, restaurants were struggling to attract and retain staff. The global health crisis has exacerbated the problem, as many laid-off workers have left for other jobs and not returned. Three-quarters of restaurant operators face staff shortages that prevent them from operating at full capacity, according to the National Restaurant Association.

Many restaurateurs raised wages to attract workers, but that put pressure on profits at a time when food costs were also rising.

Automation startups present themselves as a solution. They say robots can flip burgers and assemble pizzas more consistently than overworked employees, and that artificial intelligence could allow computers to take drive-thru orders more accurately.

the year of the robot

Chipotle Goes Automated

Many of the industry’s automation announcements this year have come from Miso Robotics, which raised $108 million in November and has a valuation of $523 million, according to Pitchbook.

Miso’s flashiest invention is Flippy, a robot that can be programmed to flip burgers or make chicken wings and can be rented for about $3,000 a month.

Burger chain White Castle has installed Flippy in four of its restaurants and has pledged to add the technology to 100 as it renovates the locations. Chipotle Mexican Grill is testing the equipment, which it calls “Chippy”, at a California restaurant to make tortillas.

“The greatest value benefit we bring to a restaurant is not reducing their expenses, but enabling them to sell more and generate profit,” Miso CEO Mike Bell told CNBC.

At the Buffalo Wild Wings, however, Flippy has not made it out of the tryouts after over a year. Parent company Inspire Brands, which is privately held and also owns Dunkin’, Arby’s and Sonic, said Miso is just one of the partners it has worked with to automate the frying of chicken wings.

Another startup, Picnic Works, offers pizza assembly equipment that automates the addition of sauce, cheese and other toppings. A Domino’s franchisee is testing the technology at a location in Berlin.

Picnic rents its equipment, with prices starting at $3,250 a month. CEO Clayton Wood told CNBC that subscriptions make the technology affordable for smaller operators. The startup raised $13.8 million at a valuation of $58.8 million, according to Pitchbook.

At Panera Bread, automation experiments have included artificial intelligence software that can take drive-thru orders and a Miso system that checks coffee volume and temperature to improve quality.

“Automation is a word, and a lot of people go straight to robotics and a robot flipping burgers or making fries. That’s not our focus,” said George Hanson, the chain’s chief digital officer.

But success is far from guaranteed. In the early 2020s, Zume transitioned from using robots to prepare, cook and deliver pizza to focus on food packaging. The startup, which did not respond to a request for comment, received a $375 million investment from SoftBank in 2018, which reportedly valued it at $2.25 billion.

the labor question

Automation often faces resistance from workers and labor advocates, who see it as a way for employers to eliminate jobs. But restaurant companies have been touting their experiments as ways to improve working conditions by eliminating tedious tasks.

In the next year, Sweetgreen plans to open two locations that will largely automate the salad-making process with technology it acquired when it bought startup Spyce. The new restaurant format will reduce the number of workers needed for shifts, Sweetgreen co-founder and chief concept officer Nic Jammet said at the Morgan Stanley Global Retail and Consumer Conference in early December.

Jammet also listed an improved employee experience and lower turnover rates as secondary benefits. A representative for Sweetgreen declined to comment for this story.

Casey Warman, professor of economics at Dalhousie University in Nova Scotia, expects the restaurant industry’s drive toward automation to permanently reduce its workforce.

“Once the machines are in place, they won’t back down, especially if there’s a big cost savings,” he says.

And Warman noted that Covid has reduced resistance to automation, as consumers have become accustomed to self-checkout supermarkets and mobile apps for ordering fast food.

Dina Zemke, an assistant professor at Ball State University who studies consumer attitudes toward automation in restaurants, also noted that consumers are growing weary of reduced restaurant hours and slower service that have come with shortages of hand labor. constructions.

In a third-quarter Technomic survey, 22% of nearly 500 restaurant operators said they are investing in technology that will save labor in the kitchen, and 19% said they added labor-saving technology to menial tasks such as ordering .

long-term skepticism

At this point, it’s unclear if or when any cost savings will materialize.

More than a year and a half ago, McDonald’s began testing software that could take drive-thru orders after acquiring Apprente, an artificial intelligence startup. Several months after unveiling the test, the fast-food giant sold the unit to IBM as part of a strategic partnership to promote the technology.

In the roughly two dozen Illinois test restaurants, the voice ordering software was accurate in the 80% range, well below the 95% target, according to a research report by BTIG analyst Peter Saleh. in June.

McDonald’s crowds at self-service kiosk.

Jeffrey Greenberg | Universal Images Group | Getty Images

And on a conference call this summer, McDonald’s CEO Chris Kempczinski threw cold water on the feasibility of full automation.

“The idea of ​​robots and all that stuff, while it’s great for grabbing headlines, it’s not practical in the vast majority of restaurants,” he said. “The savings are not limited… You won’t see this as a comprehensive solution any time soon.”

Meanwhile, automation may have more potential on less noticeable tasks. Jamie Richardson, vice president of White Castle, said less flashy changes, such as installing Coca-Cola Freestyle machines, had a bigger impact on sales.

“Sometimes the biggest automation investments we make aren’t that impressive,” Richardson said.

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