A team member from White Castle alongside Flippy from Miso Robotics.
Courtesy: Miso Robotics
Chipotle Mexican Grill tests whether a robot in the shop can make tortilla chips. sweet green plans to automate lettuce production at at least two locations. and Starbucks wants its coffee making equipment to reduce the workload for baristas.
This year has seen a flurry of automation announcements in the restaurant industry as operators scramble to find solutions to a shrinking workforce and rising wages. But efforts so far have been patchy, and experts say it will be years before robots pay off for companies or take the place of workers.
“I think there’s a lot of experimentation that’s going to get us somewhere eventually, but we’re still a very labor-intensive, labor-centric industry,” said David Henkes, one of the directors at Technomic, a restaurant research firm.
Even before the pandemic, restaurants were struggling to attract and retain workers. The global health crisis made the problem worse, with many laid-off workers leaving for other jobs and not returning. According to the National Restaurant Association, three-quarters of restaurant operators face staffing shortages that keep them from operating at full capacity.
Many restaurateurs raised wages to attract workers, but that squeezed profits at a time when food costs were also rising.
Automation startups offer a solution. They say robots can flip burgers and assemble pizzas more consistently than overworked workers, and that artificial intelligence can enable computers to take drive-through orders more accurately.
The year of the robot
Many of the industry’s lively automation announcements this year have come from Miso Robotics, which has raised $108 million through November and is valued at $523 million, according to Pitchbook.
Miso’s most notable invention is Flippy, a robot that can be programmed to flip burgers or make chicken wings and can be rented for around $3,000 a month.
Burger chain White Castle has installed Flippy in four of its restaurants and has pledged to add the technology as it remodels 100 locations. Chipotle Mexican Grill tests equipment it calls “Chippy” at a California restaurant to make tortilla chips.
“The most valuable benefit we bring to a restaurant isn’t reducing their costs, it’s enabling them to sell more and make a profit,” Miso CEO Mike Bell told CNBC.
However, at Buffalo Wild Wings, Flippy has not come out of testing 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 process of adding sauce, cheese, and other toppings. A Domino’s franchisee is testing the technology at a Berlin location.
Picnic rents its equipment with prices starting at $3,250 per month. CEO Clayton Wood told CNBC that subscriptions make the technology affordable for smaller operators. According to Pitchbook, the startup has raised $13.8 million at a valuation of $58.8 million.
At Panera Bread, automation experiments included artificial intelligence software that can take drive-through orders and a miso system that checks coffee volumes and temperatures to improve quality.
“Automation is a word, and a lot of people go straight to robotics and a robot that spins burgers or makes french 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 transitioned from using robots to prepare, cook and deliver pizza to food packaging. The startup, which did not respond to a request for comment, received a $375 million investment from SoftBank in 2018 that was reportedly valued at $2.25 billion.
The work question
Automation is often opposed by workers and workers’ representatives, who see it as a way for employers to eliminate jobs. But restaurant companies have touted their experiments to improve working conditions by eliminating tedious tasks.
Next year, Sweetgreen plans to open two locations that will largely automate the lettuce-making process using technology it acquired through its purchase of startup Spyce. The new restaurant format will reduce the number of workers needed for shifts, Nic Jammet, Sweetgreen’s co-founder and chief concept officer, said at the Morgan Stanley Global Retail and Consumer Conference in early December.
Jammet also cited improved employee experience and lower turnover rates as secondary benefits. A Sweetgreen representative declined to comment on the story.
Casey Warman, an economics professor at Dalhousie University in Nova Scotia, expects the restaurant industry’s drive to automate to permanently shrink their workforce.
“Once the machines are in place, they’re not going to fall behind, especially when there’s big cost savings,” he said.
And Warman noted that Covid reduced resistance to automation as consumers became more accustomed to self-checkout at grocery stores and mobile apps to order fast food.
Dina Zemke, an assistant professor at Ball State University who studies consumer attitudes toward automation in restaurants, also found that consumers are fed up with the reduced restaurant hours and slower service that come with the labor shortage.
In a Technomic survey conducted in Q3, 22% of approximately 500 restaurateurs said they are investing in technology that saves kitchen labor, and 19% said they have added labor-saving technology for tasks like ordering.
Long-term skepticism
It is currently unclear if or when cost savings will materialize.
More than a year and a half ago, McDonald’s began testing software that could take drive-through orders after acquiring Apprente, an artificial intelligence startup. A few months after the test was announced, the fast-food giant sold the device to IBM as part of a strategic partnership to advance the technology.
According to a June research report by BTIG analyst Peter Saleh, the voice ordering software in the roughly two dozen Illinois restaurants tested had an accuracy in the low 80 percent range, well below the 95 percent target.
McDonald’s crowds at the self-service kiosk.
Jeffrey Greenberg | Universal picture group | Getty Images
And on a conference call this summer on the results, McDonald CEO Chris Kempczinski threw cold water on the feasibility of full automation.
“The idea of robots and all that stuff, while great for making headlines, isn’t practical in most restaurants,” he said. “The economy isn’t emerging … You’re not going to see that as a broad-based solution anytime soon.”
Meanwhile, automation might have more potential for less conspicuous tasks. White Castle vice president Jamie Richardson said less conspicuous changes like installing Coca-Cola Freestyle machines would have an outsized impact on sales.
“Sometimes the larger automation investments that we make aren’t so earth-shattering,” Richardson said.
