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Food Tech News: InnerPlant Launches Sensor Plants, $3.5 Million Grant for Cultivated Meat

I’m taking over the weekly Food Tech News post, and this week I bring you both plant-centric and meaty news. Money is being pumped into cultivated meat research, a plant-based burger company signed a partnership with a football team, and tomato plants can now tell you if they are feeling stressed. Oh, and the world’s smallest gum company raised $1.2 million in funding.

InnerPlant Launches “Living Sensor” Plants

InnerPlant, based in Davis, California, announced the launch of the InnerTomato™ this week. The tomato plants are fed a protein that amplifies the natural signals a plant releases to warn neighboring plants of different stressors. A farmer can use an iPhone, drone, or satellite to take a photo of the plants, and through augmented reality, will be able to see if the plant is a certain color. Different colors signal if the plant needs water, is stressed, or under attack from a certain disease or pest. This is InnerPlant’s first proprietary plant.

Photo from UC Davis’ Aggie Transcript

UC Davis Receives Funding For Cultivated Meat Research

UC Davis recently received a $3.5 million grant from the National Science Foundation to research cultivated meat. One of the main goals of this five-year grant is to develop methods to amplify stem cells efficiently. Researchers aim to create methods that enable sustainably lab-grown meat to be an option for feeding a rapidly growing world population. This is the first major grant in the U.S. for cellular agriculture.

The World’s Smallest Gum Factory

Copenhagen-based True Gum just raised $1.2 million (USD) from a German VC Oyster Bay. True Gum makes plant-based gum that is free of petroleum ingredients (which are found in many gum brands), and instead uses a sustainably-sourced tree sap, called chicle, from South America as the main ingredient.

Planterra’s Brand, OZO, Partners With Denver Broncos

OZO, a brand of Colorado-based Planterra Foods, just signed a three-year partnership with the Denver Broncos. Planterra is a subsidiary of JBS Foods, the largest beef and pork processor in the world. OZO’s products include plant-based ground beef and burger patties made from pea protein, and are currently available in 12 U.S. states. As part of the partnership, OZO will be advertising at the Mile High Stadium and serving up its vegan burgers from its traveling food van.

The last time we brought up the Denver Broncos and the Mile High Stadium on The Spoon, it was to announce the installment of a beer-pouring robot at the stadium. Vegan stadium burgers and beer robots might be convincing enough to get me into a football stadium during a pandemic.

Tesco and Olio Team Up to Fight Food Waste

And in some non-meaty but still-sustainable news, Tesco and food-sharing app Olio announced this week they have partnered to fight food waste. Olio volunteers (of which there are around 8,000) will pick up surplus food at Tesco stores then upload it to the Olio app. Food is then distributed for free to households in need and community groups looking to help.

Tesco is launching this food-drive-like initiative across all 2,700 of its U.K. stores. The company said it was able to redirect 36 tons of food — which would have otherwise gone to waste — through an earlier trial of the program.  

Delivery Hero Heads to Japan via Its foodpanda Service

Slow down, Delivery Hero, I can’t keep up with all your news this week.

On the heels of multiple other announcements, the Berlin, Germany-based third-party delivery service said at the tail-end of yesterday that it is launching operations in Japan via its foodbanda subsidiary.

Through foodpanda, Delivery Hero will launch service in six cities to start: Kobe, Yokohama, Nagoya, Sapporo, Fukuoka, and Hiroshima. The company said in today’s press release that it plans to expand its Japan presence “continuously,” though an exact timeframe for other cities was not mentioned. The foodpanda service will, in addition to providing restaurant meals, also deliver groceries and household goods to users.

Including Japan, Delivery Hero now operates in well over 600 cities around the world, either under its own moniker or via subsidiary brands like foodpanda. And, as I said a minute ago, the company has been on a bit of a tear in terms of of news announcements this week. On Wednesday it said it plans to acquire fellow delivery service Glovo’s Latin America business, which will add several countries to Delivery Hero’s already existing presence in that region. Also this week, the company announced a new partnership with World Food Programme to integrate a donations feature into all of Delivery Hero’s digital properties, making it easier for users to donate meals to those in need.

Even with the expansions in Latin America and Japan, and even though it’s the world’s largest food-delivery service outside of China, Delivery Hero’s lead is far from guaranteed for the long term. The entire food delivery sector, which has been a saturated market for a long time, is undergoing consolidation right now. Takeaway.com’s recent merger with Just Eat has formed another massive food delivery company, particularly since that newly formed entity swooped up Grubhub in the U.S. Also in North America, Uber Eats agreed to buy Postmates. Back in LatAm, Colombian heavyweight Domicillios.com merged with Brazil’s iFood earlier in 2020.

Delivery Hero isn’t immune to all this competition. In fact, the company cited this saturated market and extreme competition in April when it pulled foodpanda operations out of Canada. On the flipside, though, Delivery Hero also bought Woowa Bros.’ Baedal Minjok service to give itself a larger share of the South Korean market. 

So whether it’s high-ranking spot in the food delivery world remains, the company is clearly expanding aggressively at the moment, and Japan won’t likely be the last country it lays claim to in the near future.

Singapore’s Float Foods Unveils a Plant-Based Food Incubator for Indonesia

Plant-based food startup Float Foods said this week it has launched a new incubator for plant-based food innovators in Indonesia (h/t Green Queen). Dubbed NEWFOOD Startup 2020, the program is a joint effort between Float Foods and food incubator Ultra Indonesia.

According to the NEWFOOD 2020 website, the program will invest in “up to 10 of the strongest performing Indonesian companies” creating plant-based alternatives to animal products. Meat and dairy alternatives are the obvious products here. Companies working with tech solutions geared towards plant-based foods and novel packaging products are also welcome to apply. All companies should have a minimum viable product at the time of their application.

The program comes at time when the alternative protein sector is seeing a huge amount of demand and investment dollars. At last check, over $1 billion has been invested, with the bulk of that money going towards plant-based products. While the U.S. is still the largest market for alt-protein, the Asia-Pacific region is also seeing significant growth, too. Float Foods says that the market for plant-based proteins in Indonesia has witnessed “tremendous growth” in demand over the last few years and will grow at a CAGR of 6 percent in the Asia-Pacific region by 2025.

Part of the demand for plant-based proteins comes from new intel around safety and ethical standards in traditional meat-packing plants, not to mention outbreaks of COVID-19 at facilities.

The NEWFOOD 2020 program is looking for companies that can answer this demand. The program will be completely virtual, with 40 days of online mentorship sessions for pre-selected companies on a range of topics, including business development, distribution, financial projections, and company valuations. Following that, 10 companies will be selected via an online demo day and will receive up to $25,000 each.

The program is currently accepting applications. Registration closes September 25.

 

Odeko AI-Driven Platform Aims to Boost the Supply, Demand, and Lifespan of the Indie Coffeeshop

A lot of us dread the idea of a world where speciality coffeeshops are gone “going for coffee” means getting a Starbucks latte delivered via DoorDash. 

Dane Atkinson, CEO of tech startup Odeko, clearly doesn’t want that day to happen either, which is why his company has developed a mobile ordering and supply chain management system that is, for now, specifically geared towards keeping specialty coffeeshops in business. 

Speaking on the phone this week about his company’s overall mission, he said “the really important message [is that] if we don’t sustain this industry, it really will become Starbucks and Dunkin’ Donuts. They will consolidate in smaller locations and the community and neighborhoods will suffer.”

NYC-based Odeko, which closed a $12 million Series A round in August, recently merged with fellow coffee tech company Cloosiv, has since the start of the pandemic looked for ways to help businesses make both the front and back ends of the coffee shop more efficient, less wasteful, and more financially sustainable over the long haul.

The consumer-facing side of Odeko’s business functions similar to those of mainstream coffee retailers. Customers order and pay for pickup through the company’s mobile app or website. At the moment, Odeko has about 10,000 coffeeshops on the platform across multiple U.S. states. Atkinson says the benefit for customers is its current focus on speciality coffeeshops, which simply means less sifting through irrelevant options to find a high-quality espresso. (Odeko vets its potential merchant partners in order to ensure they actually are specialty coffeeshops.)

The coffeeshops themselves get perhaps the most benefit from the platform. Listing a business on the platform means the coffeeshop itself doesn’t have to come up with the resources to create a mobile order app from the ground up. Odeko charges a 5 percent commission fee per order, which small compared to others, including third-party aggregators a la Grubhub.

Sales data is then used, via AI, to predict volume so that coffeeshops know how much to order in terms of paper supplies, baking ingredients, beverages, and other items needed to run a coffeeshop. Businesses can browse the company’s Cafe Supply Catalog to find all of these items, which Odeko then delivers as a single shipment. 

Atkinson said this supply side of the business is “exploding” now that restaurant industry margins are so tight that any amount of money lost through inventory waste or inefficient supply chain processes can spell the end for a business. “Previously, as a shop, you could get away with some waste in your inventory,” he noted. Now, throwing out unused inventory is akin to “your own salary you’re throwing out.” He says the system is “90 percent accurate” in terms of predicting inventory needs for a week.

The need to digitize the back of house and make it more efficient is a theme that comes up a lot nowadays, with companies like Galley and Souszen applying software, automation, and IoT to change how the back of house is run. Odeko stands somewhat apart from these companies because of its accompanying consumer-facing tech, and also its focus on independent and specialty retailers. It’s main competitor in the coffee-specific mobile order space is Ritual, though Ritual does not have a supply chain side of its business.

Odeko doesn’t necessarily want to solely commit itself to coffee for the long haul. Atkinson says the system could actually work for other types of food businesses, including juice bars or full-service restaurants, and that at some point down the line the company will expand in terms of the types of food businesses on its platform. For now, keeping the independent coffeeshop, the connective tissue of many neighborhoods, alive is its main mission. 

InFarm Raises $170M to Expand Its Vertical Farming Network

Berlin, Germany-based vertical farming company InFarm announced today it has raised $170 million in the first close of its Series C round, bringing its total funding so far to $304.5 million.

The investment round, a mix of equity and debt financing, was led by LGT Lightstone with participation from Hanaco, Bonnier, Haniel, and Latitude, as well as existing investors Atomico, TriplePoint Capital, Mons Capital and Astanor Ventures. InFarm said in today’s press release that it expects the Series C round to eventually reach $200 million.

InFarm has built its reputation, not to mention its coffers, on the idea of getting fresh, local greens to more cities around the world via its network of high-tech vertical farms. The farms are smallish, pod-like devices that can live in grocery stores, restaurants, and food distribution centers. The farms use hydroponics and cloud-based software to grow leafy greens in completely controlled environments. A big benefit with InFarms’ approach is that, since farms are placed inside grocery stores, greens can be harvested onsite and sold without having to travel. 

Sourcing greens close to the store is becoming more commonplace as companies develop smaller vertical farms. While InFarm might be the most high-profile player in this area of vertical farming, it isn’t the only company bringing greens literally to market. Farm.One just installed its own mini-vertical farm at a Whole Foods in Manhattan and has plans to expand to other stores soon. Vertical Field launched a geoponic vertical farm at New York’s famed Evergreen market in August. Brooklyn-based Square Roots puts a slightly different twist on the concept by placing its shipping container farms next to food distribution centers. The company currently has a partnership with North American distributor Gordon Food Service.

All of which is to say, InFarm may be leading the farm-in-a-grocery-store movement, but it won’t be the only company grabbing major investment dollars for long.

InFarm raised $100 million in June of 2019. Since then, it has struck deals with major grocery retailers around the world, including  Aldi Süd in Germany, Kroger in the U.S., Empire in Canada, and Kinokuniya in Japan, among other places. The company said today it expects its farming network to total more than 5 million square feet by 2025, making it the largest distributed farming network in the world. 

To do that, the company will expand to new cities in future. The new investment capital will go towards that goal. InFarm will also use some of it to complete development on a next-gen version of its farm. 

New Report Calls Fermentation The Next Pillar of Alternative Proteins

A new report released today by the Good Food Institute adds a third pillar to the alternative protein sector alongside cultured meat and plant-based proteins: fermentation. 

In the last five years there’s been a “Cambrian explosion” of companies in this segment, Nate Crosser, start-up growth specialist at GFI and author of the report, told me in an interview this week. By mid-2020 there were 44 fermentation companies globally working on alternative proteins, up from 23 companies in 2018. 

“I was surprised to see how much traction was behind this segment, in terms of investment in particular,” Crosser said. Cultured meat gets all the press, but in 2019 fermentation-based protein companies raised 3.5 times more capital than cultivated meat companies, and in 2020 they’ve already raised $435 million of the total $1.5 billion invested in alternative proteins. 

Fermentation uses microbes to produce proteins and functional ingredients used in animal-free meat, egg and dairy products. Part of the allure to investors is that the technology is “commercializable today,” Mark Warner, a consultant on alternative proteins who specializes in scaling up fermentation commercialization told me in an interview on Tuesday. There are already companies and facilities using similar methods to mass produce enzymes. “The tech is generally proven. It’s the organisms that are being newly introduced.”

Because there are a myriad of organisms and approaches that can be used in fermentation, GFI breaks down fermentation companies into 3 categories in their report: traditional, biomass, and precision fermentation.

Traditional, as its name would suggest, refers to a long-established use of microbes to alter flavor, nutrition or texture—like the lactic acid bacteria used to make cheese or MycoTechnology’s plant protein with improved taste and functionality.

Biomass fermentation is all about mass producing protein. It relies on fast-growing, protein-dense microorganisms like algae and fungi. Meati uses this approach to make its mycelium-based steak. And last but not least, there’s precision fermentation, the process used to make Impossible Foods’ heme protein or Perfect Day’s whey protein. This approach, which can often rely on genetic modification, is used to produce highly functional proteins or ingredients that must be very precise but are needed in lower quantities.

The report is intended to give potential or existing investors an idea of the different approaches and state of the industry, Crosser said. Several major tech and agriculture players are already backing fermentation companies, including ADM Capital, Louis Dreyfus Co., Kellogg, Danone and Bill Gates-backed Breakthrough Energy Venture. Meanwhile major food and lifestyle companies like DSM, JBS, Novozymes and DuPont are working on in-house fermentation-derived alternative protein products.

But it may eventually take more than private funding if alternative proteins are really going to disrupt the meat and dairy industries, Warner said. Like with biofuels, alternative proteins may eventually require government funding to really take off.  “From my perspective, [this report] is going to be vital in framing the need for fermentation for investors,” Warren said, “but also public policy and any discussion around government funding.” 

While the entirety of alternative proteins industry is in a race to market, fermentation companies are expected to do more than join the contest. A high percentage of the fermentation segment is B2B, according to Crosser. They’ll be developing the components needed for cell culture and the ingredients needed for plant-based products.  “Their success is going to fuel the rest of the industry,” he said. “Fermentation serves as a force multiplier for the entire alternative protein sector.”

Delivery Hero Acquires Glovo’s Latin America Operations

Berlin, Germany-based Delivery Hero announced today it has acquired fellow third-party delivery service Glovo’s Latin American operations for €230 million (~$272M USD). The transaction is expected to close in the next few weeks, according to a press release from Delivery Hero.

The deal covers all Latin American countries in which Glovo operates: There is some overlap here, as Delivery Hero already has operations in Argentina, Panama, and the Dominican Republic. Acquiring Glovo obviously means Delivery Hero will widen its reach in Latin America considerably. 

Any delivery service aiming to enter or expand in the Latin America market will need to ensure they offer affordable options for restaurants. By some accounts, roughly 96 percent of independent restaurants in Latin America are not even online right now, and restaurant tech is far less developed than in, say, the U.S. and Europe. Even so, the Latin American market is the fastest-growing one outside the Asia-Pacific region.

Delivery Hero CEO Niklas Östberg said in today’s press release that Latin America “is a region with exceptional growth potential for online delivery.” 

The acquisition also means more consolidation for the Latin America food delivery sector. Glovo actually exited two Latin American markets earlier this year. Meanwhile, iFood and Domicillios.com merged in April and together compete with the other major player, Softbank-backed Rappi.

Delivery Hero’s last big acquisition was at the end of 2019 when the company bought its South Korean food delivery rival, Woowa Bros.’ Baedal Minjok service, for $4 billion. Prior to that, it had acquired InstaShop, an online grocery marketplace with operations in the Middle East and North Africa. Delivery Hero now operates in 44 countries worldwide.

Glovo will continue to operate its Latin America markets until March 2021, at which point, pending regulatory approval, they will become a part of Delivery Hero’s network.

Yelp: Permanent and Temporary Restaurant Closures Are Increasing

Roughly 61 percent of businesses listed as “closed” on Yelp have shuttered permanently, according to the platform’s latest Local Economic Impact report.

A total of 32,109 restaurants that were marked as open on the Yelp platform on March 1 are now closed, the new report details. Those numbers make the restaurant industry the most impacted by the pandemic of any business type on Yelp.

Those numbers, of course, only account for the restaurants listed on Yelp’s platform. The National Restaurant Association, which represents the entire restaurant industry, released its own findings this week that said 100,000 restaurants, or nearly one in six, are closed either permanently or for the long term. But whether you go by Yelp’s numbers or the Association’s more widespread findings, the conclusion is the same: the uptick in restaurant closures continues to rise.

As far as Yelp’s new data is concerned, restaurant closure rates vary across the country. As today’s report notes, “Bigger states and metros with higher rents and more stringent local operations for small businesses throughout the last six months have felt a greater toll.” Geographically speaking, California, Texas, Florida, and New York had the highest number of closures of states, while Los Angeles, NYC, San Francisco, Chicago, and Dallas topped the list for cities.

Types of restaurants with the most closures include breakfast/brunch spots, burger joints, sandwich shops, dessert places and Mexican restaurants.

Yelp’s report wasn’t all gloomy news, though. It also noted that some restaurants have been able to maintain low closure rates. Not surprisingly, those are the restaurants focusing on delivery and takeout, offering food that travels well. While a small silver lining, that point suggests the work restaurants have been doing for the last six months to shift their strategies towards more to-go-friendly formats is not in vain.

Yelp’s new report, along with the Association’s figures, both come just days after the the CDC released findings that suggest those who eat in restaurant dining rooms are twice as likely to be at risk for COVID-19.

Kbox Global Raises £12M to Expand Its Virtual Restaurant Network

Virtual restaurant platform Kbox Global announced this week it has raised £12 million (~$15.5 million USD) to expand its food delivery concept. The round was led by London-based venture firm Balderton Capital, according to a press release sent to The Spoon.

Founded in 2019 in London, Kbox operates more than 30 delivery-only restaurant brands. It licenses these brands, along with a technology stack, to restaurants and other foodservice operations looking for incremental revenue to add to their businesses.  

To do this, Kbox assesses each restaurant, including its location and main demographic, then uses those factors to choose the most relevant virtual restaurant brands for the business to offer. Restaurants cook and fulfill the orders themselves, with their existing staff, while Kbox’s tech stack integrates with third-party delivery services that handle the last mile of the delivery.

The company says there are no upfront fees for restaurants looking to utilize this concept, which is a way for restaurants to diversify their food offerings without investing in a full brick-and-mortar operation. In essence, restaurants are turning themselves into ghost kitchens for Kbox brands by partnering with the company.

The idea of one restaurant licensing and running a completely different brand from a third-party is a more recent development in the world of ghost kitchens, though Kbox isn’t alone in expanding the concept. Chicago-based Wow Bao said in April it was licensing its own menu to other restaurant brands in much the same manner as Kbox. Some Fatburger locations double as ghost kitchens for the chain’s sister brand Hurricane Grill & Wings. And let’s not forget about the celebrities launching their own virtual restaurant brands that existing businesses cook and fulfill. 

Needless to say, restaurants need any extra revenue they can get right now, thanks to the pandemic shuttering dining rooms left and right and all but forcing many brands to go the ghost kitchen route. However, we’ve yet to see many numbers about how financially fruitful it is to run a third-party brand out of one’s own restaurant kitchen.

For its part, Kbox says it is on track to have 2,000 of these kitchens in the UK before the end of 2021, and is also in the midst of an international expansion. The company has franchise agreements in Australia and India and says operations will launch in another eight countries at some point next year. The new capital from Balderton will support this expansion, as well as help Kbox establish a presence in the U.S. in earl 2021.

Surplus Food Startup Hungry Harvest Closes Series A Round at $13.7M

Food rescue startup Hungry Harvest has closed its Series A round at $13.7 million, according to a company press release. The round was led by Creadev with participation from Danone Manifesto Ventures, Quadia, and Maywic Select Investments.

Hungry Harvest is one of several companies out there rescuing “ugly” produce and other staples from groceries in an effort to curb food waste and redistribute food to those in need. The company collects fruits, vegetables, and other items deemed cosmetically unfit for mainstream retailers and packs them into variety boxes customers can order and have delivered to their doorsteps. Users can customize their boxes based on how often they cook, how many people they are feeding, and whether they prefer organic produce or will eat anything. Boxes range in price from $15 for a “Mini Harvest” all the way up to $42 for a “Super Organic Harvest.”

The company also donates to local organizations fighting food insecurity in the U.S. Hungry Harvest says it plans to use the new funds to improve the customer experience for its products and scale its social mission of getting affordable food to those in need. 

The concept of rescuing ugly produce from landfills has steadily grown in popularity over the last couple years as the world’s multibillion-dollar food waste problem becomes more top of mind for more consumers. Those consumers now have ample options when it comes to purchasing cheaper produce that would get tossed at a grocery store, including Karma, Imperfect Produce, and Misfits Market. Some of these companies are actually partnering with grocery stores, as Flashfood is doing with Meijer stores in Detroit. 

For it’s part, Hungry Harvest currently delivers to Baltimore, D.C., Philadelphia, Charlotte, Raleigh, Miami and Detroit.

Fighting Consumer Food Waste at Home Means Rethinking the Refrigerator

What’s the most effective way to fight food waste in the home? Take a look at your fridge.

Most consumers at this point are aware of the world’s multibillion food waste problem. A great many more now understand that, at least in North America and Europe, the bulk of that waste happens at consumer-facing stages of the food journey, including our own homes. What we’re less certain of is how to curb that excess.

Researching solutions for “The Consumer Food Waste Innovation Report,” which you can read on Spoon Plus, I came across a number of different methods for reducing food waste in the home. But after sifting through the many storage and preservation options out there, the meal-planning and meal-sharing apps, I’m left wondering if the trick to reducing at-home food waste isn’t just re-envisioning the refrigerator itself.

The appliance hasn’t changed much over the last several decades. But in 2020, the pandemic is keeping more folks at home, we have more information about how much food we’re actually wasting (it’s a ton), and more investment in the food tech sector in general. The convergence of those factors makes now an ideal time to change that point and introduce more innovation into the world of refrigerators. Here are a few ideas:

Smarter Features That Are Actually Affordable

By now, many consumers are at least aware of high-tech refrigerators that can track items placed in the fridge, alert owners when those items are running low, and scan and identify foods to help consumers plan meals and find recipes. LG’s ThinQ and the Samsung Family Hub are two appliances that lead the smart fridge market.

They also cost thousands of dollars, making them out of reach for most consumers. True, having cameras and image-recognition technology inside the fridge is a relatively new concept, so a higher price point is to be expected. But in order for the new applications of those technologies to be most effective, they’ll need to get cheaper. By that I mean, we’ll need to see options for them build into most fridges.

Another option is add-on tech for the fridge. As we note in the report, Smarter makes a device can be retrofitted for any fridge and recognize the items inside. Fridge Eye has a similar device.

Smaller Fridge, Bigger Freezer

“Everyone loses something in the back of the fridge,” food waste expert Dana Gunders told us when interviewed for the report. Her point is that the sheer size of most modern refrigerators means older items will get pushed out of view and forgotten as newer ones are placed in the fridge.

High-tech fixes like the ones mentioned above can help, but the fridge design itself seems ripe for an upgrade. Or downgrade, as it were, since a smaller fridge compartment with a bigger freezer might be a surefire way to reduce food waste. Much of our food, even items like milk and bread, can be frozen until we need to use them. And research shows that things like frozen fruits and vegetables maintain more or less the same nutrients as their fresh counterparts. 

Better Storage to Accompany the Fridge

Back in the 1930s, when the electric refrigerator was just starting to get popular, General Electric sold fridges by promoting the then-newish concept of leftovers to consumers. Along with tips and cookbooks, the appliance-maker sold food storage containers designed to stack up in the fridge and hold leftovers. 

Maybe to curb food waste, we need a kind of rebirth of that concept, this time geared towards curbing food waste and with a high-tech twist. Major appliance manufacturers could team up with startups like Mimica, BlakBear, or Silo to sell smarter storage options — think smart labels and temperature sensors — alongside their appliances. They could also find ways to integrate some of those new technologies into fridge doors, drawers, and other compartments.

For more thoughts on the reinvention of the refrigerator as well as how else we can fight food waste at home, check out the full “Consumer Food Waste Innovation” report at Spoon Plus.

The CDC’s New Findings Put Restaurant Tech In the Hot Seat Once Again

The big restaurant news over the weekend was a new set of findings from the CDC that suggest a higher risk for COVID-19 among those who eat in restaurant dining rooms.

The inescapably obvious point is that the findings are worrying for restaurants planning to reopen or increase the capacity of their dining rooms. That in turn brings up a less-obvious point, that the so-called contactless technologies out there that say they’ll make restaurants safer have yet to prove their value.

As has been extensively covered, the CDC’s report found that adults who test positive for COVID-19 were “approximately twice as likely to have reported dining at a restaurant” than those who tested negative.

These are exactly the types of findings the restaurant industry has tried to avoid, and it has used a lot of tech to do that. When dining rooms first started to reopen, restaurant tech companies rushed to bring contactless “kits” — software that enables digital menus, ordering, and payments — to market. There are now so many of these offerings it’s often hard to distinguish one from the next.

To be super-duper clear, no company is claiming they’ll fend off COVID-19 with a QR-code enabled menu feature. It’s also worth noting that we don’t have extensive data yet on how many restaurants (including those in the CDC study) have actually implemented contactless software, which is expensive and a time-consuming process.

While we don’t know how vast contactless implementations are, we know restaurant tech companies use phrases like “safe,” “contact-free,” and “end-to-end contactless experience” all over their marketing copy and product-speak nowadays. 

But giving a piece of software the “contactless” label and actually eliminating (as opposed to minimizing) human-to-human contact in the dining room are two different things. Customers might be able to browse a menu, order a meal, and pay for it from their own device, but someone still has to run the food to the table, refill drinks, and step in if there is a problem with the order. Humans still cook and plate the food, and even spreading tables further apart won’t necessarily stop the spread of coronavirus. (One study found that infectious droplets can spread up to 16 feet away from the infected person.)

In their current form, contactless restaurant tech solutions can’t totally eradicate human intervention in the restaurant experience. Even if it could, there are still the other diners to contend with (see above), which means contactless tech can’t completely wipe out the risk that someone will get COVID-19 from going out to eat. Hence the CDC’s latest findings.

What contactless tech can do is speed up the order and pay process, help restaurants keep labor costs lower (fewer staff to pay), and even drive more people to restaurants’ native mobile apps instead of third-party delivery platforms. It can also speed up formats like curbside pickup and drive-thru, areas where restaurant operators should perhaps spend the bulk of their energy implementing contactless tech.

For now, at least, all signs point to off-premises formats like drive-thru and takeout as the areas where restaurants should be spending the bulk of their energy, period. The National Restaurant Association just released new figures that note one in six restaurants have closed either permanently or for the long term. I doubt the CDCs findings will make that number any less bleak anytime soon. For the present, restaurants should continue to focus on developing their off-premises formats, whether that’s faster curbside service via contactless tech, a ghost kitchen, or even a makeshift drive-thru lane.

As far as the dining room is concerned, it may be time for bolder moves than a QR code. By that I mean more robots to do things like run food and wash dishes, and more creative ways of arranging the dining room layout. In other words, it’s probably going to take more than iterative tech to get the restaurant biz back on its feet.