Restaurant chains are investing in robots, bringing change for workers

A member of the White Castle team with Flippy from Miso Robotics.

Courtesy: Miso Robotics

chipotle mexican grill is testing whether a robot can make tortilla chips in stores. greensweet plans to automate salad preparation at at least two locations. Y starbucks you want your coffee making equipment to lessen the workload of baristas.

This year brought a flurry of automation announcements in the restaurant industry, as operators scrambled to come up with solutions for a shrinking workforce and rising wages. But efforts have been patchy so far, and experts say it will be years before robots pay companies or take the place of workers.

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

Even before the COVID-19 pandemic, restaurants were struggling to attract and retain workers. The global health crisis exacerbated the problem, as many laid-off workers left for other jobs and never returned. Three-quarters of restaurant operators face staff shortages that prevent them from operating at full capacity, according to the National Restaurant Association.

Many restaurant operators 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 may allow computers to take self-service orders more accurately.

the year of the robot

Chipotle is automated

Many of the industry automation announcements this year came from Miso Robotics, which has raised $108 million through 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 committed to adding the technology to 100 as it revamps locations. Chipotle Mexican Grill is testing the equipment, whom he calls “Chippy”, in a restaurant in California to make chips

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

However, at Buffalo Wild Wings, Flippy hasn’t made it past the testing phase 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 he has worked with to automate frying chicken wings.

Another start-up, Picnic Works, offers pizza-assembly kits that automate the addition of sauce, cheese and other toppings. A Domino’s franchisee is testing the technology at a Berlin location.

Picnic rents out 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 has raised $13.8 million with a valuation of $58.8 million, according to Pitchbook.

At Panera Bread, automation experiments have included artificial intelligence software that can take orders from the car and a miso system It controls the volume and temperature of the coffee to improve quality.

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

But success is far from guaranteed. In early 2020, Zume shifted 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 that reportedly valued it at $2.25 billion.

the labor question

Automation often faces pushback 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.

Next year, Sweetgreen plans to open two locations that will largely automate the salad-making process using technology it acquired by buying 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 Consumer & Retail 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, an economics professor at Dalhousie University in Nova Scotia, expects the restaurant industry’s push toward automation to permanently reduce its workforce.

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

And Warman noted that Covid reduced rejection of automation, as consumers became more accustomed to self-checkout at grocery stores and mobile apps for ordering fast food.

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

In a Technomic survey conducted in the third quarter, 22% of approximately 500 restaurant operators said they are investing in labor-saving technology in the kitchen and 19% said they have added labor-saving technology to kitchens. front of house chores, such as tidying up.

long-term skepticism

McDonald’s crowds at the self-service kiosk.

Jeffrey Greenberg | Universal Image Group | fake images

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

“The idea of ​​robots and all that stuff, while maybe great for getting headlines, isn’t practical in the vast majority of restaurants,” he said. “The economy is not erased… You won’t see that as a broad-based solution anytime soon.”

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

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

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