Restaurant chains are investing in robots, creating change for workers

Restaurant chains are investing in robots, creating change for workers

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

Courtesy: Miso Robotics

Chipotle Mexican Grill Tests whether a robot can make tortilla chips in stores. sweet green Plans to automate salad making in at least two locations. And the Starbucks It wants its own coffee making equipment to reduce the barista’s workload.

This year saw a wave of automation announcements in the restaurant industry as operators scrambled to find solutions to a shrinking workforce and higher wages. But efforts have been spotty so far, and experts say it will be years before robots pay off for companies or replace workers.

“I think there’s a lot of experimentation out there that will lead us somewhere at some point, but we’re still a labor-intensive, labor-driven industry,” said David Hinks, president at Technomic, a restaurant research firm.

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

Many restaurant operators raised wages to attract workers, but this 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 can enable computers to take orders from the drive-thru more accurately.

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Many of the industry’s loudest automation announcements this year have come from Miso Robotics, which has raised $108 million as of November and is valued at $523 million, according to Pitchbook.

Miso’s brightest 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.

The White Castle restaurant chain has installed Flippy in four of its restaurants and has committed to adding the technology to 100 locations as it renovates the sites. Chipotle Mexican Grill is testing equipment, It’s called “chippy” in a California restaurant To make tortilla chips.

“The highest benefit we can give a restaurant is not to reduce their expenses, but to allow them to sell more and make a profit,” Miso CEO Mike Bell told CNBC.

However, at the Buffalo Wild Wings, Flippy has yet to make it out of the audition phase after over a year. Parent company Inspire Brands, which is privately owned and also owns Dunkin’, Arby’s, and Sonic, said Miso is just one of the partners it has worked with to automate fried chicken wings.

Another startup, Picnic Works, offers pizza assembly equipment that automatically adds sauce, cheese, and other toppings. A Domino’s franchisee tests the technology at a Berlin location.

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

At Panera Bread, the automation experiments included an AI program that could take drive-by and drive-through commands miso system Which checks the volume and temperature of the coffee to improve the quality.

said George Hanson, chief digital officer for the chain

But success is far from guaranteed. In early 2020, Zume shifted from using robots to prepare, cook, and serve 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 that was said to be worth $2.25 billion.

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

Next year, Sweetgreen plans to open two locations that will largely automate the salad-making process using technology it acquired through the purchase of startup Spyce. The new restaurant format will reduce the number of workers needed for shifts, Co-Founder and Chief Concepts Nick Gamemet said at the Morgan Stanley World Retail and Consumer Conference in early December.

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

Casey Warman, an economics professor at Dalhousie University in Nova Scotia, predicts that the restaurant industry’s push for automation will permanently shrink its workforce.

“Once the machines are in place,” he said, “they won’t go backwards, especially if there are significant cost savings.”

Warman noted that Covid has reduced resistance to automation, as consumers have become more accustomed to self-checkouts at grocery stores and mobile apps for ordering takeaways.

Dina Zimke, an assistant professor at Ball State University who studies consumer attitudes about automation in restaurants, also noted that consumers are tired of slow restaurant hours and sluggish service that come with labor shortages.

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

Long term doubts

At this point, it is not clear whether or not cost savings will be achieved.

More than a year and a half ago, McDonald’s began testing software that could take orders from the car after acquiring Apprent, an artificial intelligence startup. Several months after the test was revealed, the fast food giant sold the unit to IBM as part of a strategic partnership to advance the technology.

In nearly two dozen Illinois test restaurants, the accuracy of the voice-ordering software was in the low 80% range, well below the 95% target, according to a research report from BTIG analyst Peter Saleh last June.

McDonald’s is crowded at the self-service kiosk.

Jeffrey Greenberg | Global Image Collection | Getty Images

And on an earnings call this summer, McDonald’s CEO Chris Kempzynski threw cold water on the viability of full automation.

“The idea of ​​robots and all this stuff, while it might be great for making headlines, is just not practical in the vast majority of restaurants,” he said. “The economy is not planning…you’re not going to see that as a large-scale solution anytime soon.”

In the meantime, automation may have greater potential in less obvious tasks. White Castle vice president Jimmy Richardson said less glamorous changes like installing Coca-Cola Freestyle machines had a bigger impact on sales.

“Sometimes our biggest automation investments aren’t quite as earth shattering,” Richardson said.

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