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Restaurant Tech

February 16, 2021

Report: Consumers Spent $486B on Takeout in 2020

Consumers spent $769 billion ordering food from restaurants last year, according to a new report from Paytronix and PYMTS. Takeout orders accounted for $486 billion, or 63 percent. of those sales. 

The report, based on a survey of U.S. consumers, is the latest in Paytronix’ ongoing “Delivering on Restaurant Rewards” series. Paytronix, of course, has skin in the game, it being a restaurant-tech company that specializes in digital ordering and payments solutions. That said, the report’s findings that underscore the popularity of takeout and digital ordering line up with other statistics we have seen over the last few months around the future of these ordering and eating formats.

Online ordering drove the majority of takeout orders in 2020, according to the Paytronix report. A total of 89 percent of consumers said they had placed their takeout order via a digital channel, such as an app, a website, or a third-party aggregator (e.g., DoorDash). The majority of those meals ordered digitally were from restaurants that, prior to the pandemic, had only ever offered dine-in service. “Our research shows that $264 billion, or 61 percent, of the $435 billion consumers spent on online food orders in 2020 was spent at restaurants that had only offered sit-down dining services prior to the outbreak,” notes the report. 

Consumers also spent “50 percent more on average” when they placed takeout orders through digital channels.

Putting a takeout strategy in place was one of the first pieces of advice for restaurants to be widely circulated at the start of lockdowns last year. Takeout offered a way for restaurants to reach customers without serving them in the dining room, and could be done without coughing up the hefty commission fees third-party delivery services charge restaurants on delivery orders. For customers, too, takeout provided an often cheaper option, since they didn’t have to pay the service fees associated with delivery orders. 

None of those factors are any less important now that we’re a year into this pandemic and restaurants have resumed (some) dine-in service. In fact, the future of the dining room is kind of a giant question mark right now, and restaurants are encouraged to continue building out a robust to-go business. Takeout is still arguably the most important part of those strategies. 

February 14, 2021

Hey, Restaurants. (Geo)Fence Me In

A few weeks ago, I looked at some of the top elements QSRs will need in order to stay ahead in the current craze for off-premises meal formats. “More curbside pickup spots” was top of the list, but of late I’m starting to think restaurants will need more than just a parking spot to make their curbside business competitive in 2021. They’ll need to fully automate those last few minutes of the process.

That thought was prompted by new survey data I got this week from restaurant tech company Bluedot. Among other things, the survey found that customers expect to be automatically checked in after placing a curbside order via a mobile app and arriving at the restaurant in the aforementioned parking spot.

Few restaurants, including most major chains, actually do this right now. Most require some form of manual(ish) check in, usually via opening the app and hitting a button, scanning a QR code at the parking spot, or, in some cases, sending a text message.

At the moment, the only major restaurant chains to fully automate the curbside process are Panera, which integrated a geofencing feature into its app last year, and El Pollo Loco. In these cases, geofencing technology can identify a user upon their arrival (the user will have agreed to give identifiers like their vehicle make and model or license plate number) and automatically alert the restaurant. The customer does nothing, save roll down the window and take the bag of food.

Geofencing is typically harder to implement and costlier than using, say, a QR code-based checkin process. Plus, most of the big changes have been busy of late building out sophisticated reward programs or four-lane drive-thrus. Fully automated curbside pickup is something of an afterthought at the moment.

But speed of service is currently a major problem and a major opportunity for restaurants. Case in point: Bluedot’s survey found that across order channels, including curbside, drive-thru, and regular ol’ pickup, that 77 percent of respondents said they would leave if the wait time was too long. The amount of time a customer is willing to wait has dropped to just six minutes, down from 10 minutes in August. 

Given that, it’s only a matter of time before more restaurants start to automate that last step of the curbside pickup process. It may only shave seconds off the process, but in today’s restaurant biz, those seconds add up quickly. 

But to clarify: “restaurants” in this context unfortunately means the big chains, those with the money and resources to spend on incremental tech developments. That leaves out a huge number of businesses just trying to survive the remainder of the pandemic.

That gives restaurant tech companies a major opportunity to help. With the future of the dining room still in question, many tech companies have turned to building out back-of-house and/or off-premises-focused tools and features. Those that cater to smaller chains and independent restaurants should consider the automation of curbside pickup as part of their future plans.

Restaurant Tech ‘Round the Web

Restaurant tech writer and friend of The Spoon Kristen Hawley’s latest newsletter addresses one of the biggest questions in the restaurant biz right now: do third-party delivery services really help local restaurants? The answer, as it turns out, is not so black and white.

Elsewhere, the folks at Restaurant Dive break down the types of assistance these third-party delivery services are providing restaurants. The piece provides a clear, well-organized picture of who’s doing what and how much it is actually helping small businesses.

Finally, there really is a Taco Bell with four drive-thru lanes. Or there will be soon, according to plans from Minnesota-based Taco Bell franchisee Border Foods. Plans surfaced this week for a new store prototype that would feature one traditional drive-thru lane, three for pickup orders, and no dining room. 

February 11, 2021

Uber Q4: Delivery Up 150% Year-Over-Year as It Expands Beyond Restaurants

Uber unveiled its earnings this week for the fourth quarter of 2020. Its food delivery business remains the strongest part of the business, a point hardly surprising since we’re still in the midst of a pandemic and restaurant dining rooms remain closed in many places.

A few of the latest stats, according to the company earnings call yesterday, include:

  • Uber reported $3.17 billion in total revenue from October through December, 2020.
  • Q4 gross bookings for delivery grew 128 percent and reached a $44 billion run rate in December.
  • Revenue “more than tripled” from last year and grew 19 percent compared to the third quarter of 2020.

On this week’s call, Uber CEO Dara Khosrowshahi also called out Uber’s plans to expand delivery into areas beyond traditional restaurants. “It’s become clear that the pandemic has increased consumers’ appetite for on-demand delivery of not just food, but all goods, and we take a major step to address this enormous opportunity,” he said.

Recent(ish) acquisitions by Uber support that statement. At the end of 2019, the company acquired majority ownership of online grocery Cornershop and in 2020 expanded its grocery delivery services. Uber’s more recent $2.65 billion acquisition of rival service Postmates gives it access to the latter’s delivery-as-a-service business that connects customers with Walmart, 7-Eleven, Apple, and other stores. Just last week, Uber also nabbed alcohol-delivery service Drizly.  

“These new initiatives will remain an investment priority going forward,” Khosrowshahi said on the call.

Overall, Uber’s losses are narrowing. For all of 2020, net losses totaled $6.77 billion, which is a roughly 20 percent improvement from the $8.51 billion in 2019.

February 11, 2021

Flipdish Raises €40M to Help Restaurants Process Digital Orders In House

Flipdish announced that it has raised €40 million (~$48.5 million USD) from Tiger Global Management to expand its software platform that lets restaurants create their own branded digital properties instead of having to rely on third-party platforms for online orders.

The company said today in a blog post that it will use the new funds to build out its team, expand operationally, and improve services to its existing customers. Currently, the service operates in the UK, Germany, France, Ireland, Spain, and the U.S. 

Flipdish’s promise to restaurants is that its software will help them easily set up and manage digital properties in order to bring digital ordering in-house, rather than leaving it to third-party marketplaces like Deliveroo and Uber Eats. Restaurants using software can build a website and mobile app that features their own branding but is powered by Flipdish’s technology on the back end. The system also includes built-in marketing and analytics tools. 

It does not, however, appear to completely eliminate reliance on third-party delivery providers. Instead, restaurants can process orders through their own (Flipdish-powered) apps and website, and Flipdish then partners with “a number of food delivery service providers” to power the last mile. Many of those are smaller, regional on-demand delivery services, though DoorDash’s Drive service makes an appearance. 

This hybrid approach isn’t unusual in the restaurant tech space. Few companies actually provide their own driver fleet along with their software stack to restaurants, ShiftPixy being the notable exception. Others, including Lunchbox, Orderslip, and Toast, integrate with some of the major third-party platforms in order to fulfill that last mile. That particular setup is unlikely to change soon, since few have the money to actually maintain a national (or international) driver fleet.

Flipdish, at least from its messaging, seems to understand that. The company noted in today’s blog post that its system isn’t just about addressing “the huge commissions taken by those marketplaces – although that is certainly part of it. It’s also about enabling those businesses to build a closer relationship with their customers.”

To date, the company has raised a total of €47.5 million, or roughly $58 million USD.

February 10, 2021

Survey: Curbside, Drive-Thru Usage High But Long Wait Times Are a ‘Dealbreaker’

Restaurant-goers continue to head to the drive-thru in droves, according to new survey data from mobile location tech company Bluedot. In the last month, 91 percent of respondents said they visited the drive-thru. An additional 67 percent are getting curbside pickup “as often or more frequently” now compared to 45 percent from last April.

The data is from the third installment of Bluedot’s four-part “State of What Feeds Us” report examining consumer preferences around the restaurant experience, both during the COVID-19 pandemic and beyond. As Bluedot is a restaurant-industry-focused tech company (KFC, McDonald’s, and Dunkin’ are among its clients), a lot of the information in these reports is around mobile app usage. However, the data also examines some broader trends that have been happening in the restaurant biz over the last several months, including those around drive-thru and curbside pickup.

Though drive-thru usage dipped slightly in January 2021, the number of visits “remain strikingly high,” according to the report: “Consumer drive-thru visits dipped slightly from the last report with a decrease to 68% of those visiting as often or more frequently in January from 74% in August.” That 68 percent, however, is still a 26 percent increase from April 2020 in terms of customers regularly going to the drive-thru.

Those numbers are reflected in recent strategies from restaurants — especially QSRs — to focus more on providing solid drive-thru experiences for customers. Chains like McDonald’s and Burger King, which have always relied on drive-thru for a percentage of sales, are redesigning their entire store formats to accommodate more drive-thru orders. Other chains, notably Chipotle and Shake Shack, are adding the format as an important element to their digital strategies for the first time.

Curbside pickup is a newer entrant to the restaurant industry, but from Bluedot’s numbers a no less important one when it comes to customer expectations. A total of 67 percent of consumers are now picking up via curbside compared to just 45 percent in April 2020. 

Consumers expect to the restaurant’s app to check them in automatically upon arrival at the restaurant and for the staff to bring out their food. Few chains with curbside pickup actually do this right now. Panera is the one major exception, as the company integrated geofencing technology into its curbside process last year that automatically notifies staff when a customer has arrived.

Automatic checkins enabled by tech would also speed up the entire curbside pickup experience, something consumers feel needs to happen in order to improve the experience. Ditto for drive thru. Bluedot’s survey found that “long wait times and lines are a deal breaker,” with 77 percent of respondents saying they would leave or consider leaving if they see a long line. Additionally, consumers expect to wait no more than six minutes, down from 10 minutes in August.

Providing faster service is an element restaurants of all shapes and sizes will have to continue to prioritize for the foreseeable future. As Bluedot and countless others point out, consumer preference for off-premises formats isn’t going away once the pandemic does. The sheer number of QSRs redesigning their physical spaces to be more to-go-friendly is testament to that. Whether those moves as well as more tech can actually cut wait times down remains to be seen.

February 7, 2021

Rise of the Plant-Based QSR

This is the web version of our restaurant tech newsletter. Sign up today to get updates on the rapidly changing nature of the food tech industry.

Those of us of a certain age will remember a time when eating “vegan” at a QSR meant the Wendy’s salad bar. 

Fast forward to 2021, and advances in both food technology and the restaurant biz have made the concept of eating vegan (which we now call “plant based”) much more palatable to the mainstream. The names “Beyond” and “Impossible” are on most major QSR’s menus today. Eat Just’s plant-based egg products are in a growing number of fast-food breakfast items. And recently, two more announcements from major QSRs dropped that indicate we’re at fast approaching a major turning point for menus in the QSR realm.

On its most recent earnings call, Starbucks said it had turned one of its Seattle, Washington locations into a test area for a “100% plant-based food menu.” Starbucks CEO Kevin Johnson suggested that this test site is in response to what he sees as “the most dominant shift in consumer behavior,” which is the move to plant-based foods. The shift, said Johnson, is evident in both food and beverages. 

The move to offer plant-based meals to customers isn’t entirely new for Starbucks. The chain debuted Beyond Meat products in China last year and carries Impossible sausage sandwiches at its stores in the U.S. It also offers a number of plant-based milk alternatives. 

But this new test store in Seattle is the first time the chain has gone full-tilt on a plant-based menus. All food items on the Starbucks menu will be vegan, with animal-based proteins being replaced by plant-based counterparts. 

Also recently, McDonald’s announced it’s finally testing its McPlant burger, a vegan offering the mega-QSR developed with Beyond Meat. While this is less of a monumental change than overhauling an entire menu, McDonald’s has up to now has made few moves when it comes to introducing plant-based foods to its menus. (A brief trial in Canada is the exception.) Though this McPlant pilot is pretty limited right now — Denmark and two cities in Sweden — it is also likely also in response to a growing consumer demand for plant-based proteins.

All that said, demand shows up differently in different parts of the world. Sweden and Seattle are obvious choices to test plant-based wares, given the demographics that reside in those areas. In the U.S., at least, seven in 10 people classify themselves as “meat eaters,” according to recent data, and there are undoubtedly parts of the country where a plant-based Starbucks would fail harder than the Wendy’s salad bar expansion did in the ‘90s. 

For now, that is. As more tests like that of Starbucks are conducted, and major chains like McDonald’s introduce more plant-based items, the concept of a full-vegan fast-food meal will grow less foreign to more customers. I doubt it’s long before we see plant-based QSR locations popping up in certain markets like, NYC, San Francisco, and even newly popular cities like Austin and Denver. How the plant-based QSR fares in these markets will tell us a lot about when it will head to other parts of the country.

The Restaurant Robots Are Coming

Of course we’ll know we’ve really hit a turning point when vegan Starbucks locations start delivering our plant-based breakfast sandwiches via robot.

I just made that up, but as The Spoon’s Editor in Chief Chris Albrecht points out in his new Spoon Plus report, we will soon see these delivery bots rolling about our sidewalks, college campuses, and city streets.

Chris’ report breaks down the different companies currently leading the space, including Starship, Kiwi, Nuro, and Refraction, and where these players’ opportunities lie in making robot delivery more common for the average consumer.

In the restaurant realm, there are a few advantages to robot delivery. It’s first and foremost a more contactless delivery method, which is an obvious plus at a time when COVID-19 vaccines aren’t widespread. Robots can also work continuously without the need for a break and could potentially be cheaper for restaurants. The flip, of course, is that widespread robot deployments would take jobs away, a point that cannot be ignored in any discussion about restaurant robots.

Chris delves into all of this and much more in his report, which you can access by becoming a Spoon Plus member. Spoon Plus members get access to all of our market reports, maps and deep dives that give you an advanced understanding of where the food tech industry is headed. Get the goods right here.

Restaurant Tech From Around The Web

Luckin Coffee, one of China’s largest coffee chains and Starbucks’ main competitor in that market, is filing for bankruptcy. The company is still dealing with the fallout from a fraud scandal from 2020. Luckin said that stores would remain open for business.

The California Supreme Court has declined to hear a lawsuit filed this week seeking to overturn Proposition 22, the controversial ballot measure that passed in November and exempts companies like DoorDash and Uber from classifying workers as employees. the Court suggested plaintiffs refile the case in a lower court. 

If it feels a little off to you that third-party delivery services like DoorDash and Uber Eats are spending millions on themed Super Bowl ads (Cookie Monster and Wayne’s World, respectively) while restaurants and restaurant workers continue to struggle, check this quick read from the folks at Eater Chicago. In the words of Eater writer Ashok Selvam, “can you imagine Wayne and Garth using a third-party service to order from Stan Mikita’s Donuts? Game off.”

February 5, 2021

Ordrslip Announces Integration With DoorDash for Restaurant Delivery

Restaurant tech company Ordrslip this week announced a partnership with DoorDash’s white label fulfillment platform, DoorDash Drive. Through the partnership, restaurants with mobile-order platforms powered by Ordrslip’s technology can use the DoorDash network to fulfill delivery orders.

Ordrslip’s pitch to restaurants is that the company’s technology allows businesses to create their own branded mobile apps without having to invest the millions of dollars and countless hours typically required to create sophisticated order-and-pay apps from scratch.

From the restaurant customer’s perspective, the app looks and functions as if it were completely owned and powered by the restaurant. On the back end, the Ordrslip SaaS system powers each transaction, and provides features such as order-ahead and payment capabilities, POS integration (with Clover or Square), order tracking, and, of course, delivery integration.

Ordrslip announced a similar partnership with Postmates (now a part of Uber) in 2020.

Giving restaurants the ability to process transactions in-house has become an increasingly important topic since the start of the industry-wide shift to digital. Doing so lets businesses pay less in commission fees to third-party delivery services. It should be noted, however, that some commission fee is still required on orders that utilize DoorDash or Postmates for the last mile of delivery. Other systems, such as those of Toast and Ritual, offer similar packages. For a restaurant to entirely bypass a commission fee on delivery orders, they would have to conduct delivery via a service like ShiftPixy, which provides drivers in addition to powering restaurants’ digital properties.

Restaurants that do large volumes of takeout orders would benefit from a technology like Ordrslip’s, since a third-party service like DoorDash is not involved in the process. However, said third-party services appear to be getting hip to this idea: just this week, Uber Eats announced it is waiving the commission fee for pickup orders through June 30, 2021. Doubtless the battle over who owns the takeout/pickup order process is just heating up.

Ordrslip licenses its tech to restaurants for a flat $100/month fee and is available to restaurants across the entire U.S. 

February 4, 2021

Uber Eats Launches Campaign to Support Independent Restaurants

Uber today announced Eat Local, a campaign the company says will support independent restaurants financially impacted by the COVID-19 pandemic. 

As part of the Eat Local package, Uber will donate $4.5 million to the Local Initiatives Support Corporation (LISC), which will in turn distribute financial assistance to U.S. restaurants facing COVID-19-related challenges. Restaurants must be on the Uber Eats and/or Postmates platforms to be eligible. 

According to the LISC website, the applications process for grants opens on Feb. 16. The grant program will offer to help restaurants meet certain expenses, such as payroll, rent, utilities, outstanding debts to vendors, and upgrading technology systems. 

Restaurants must have been active on Uber Eats or Postmates since Jan. 1, 2021 in order to be eligible for the grant. Businesses must also have less than five locations and not be affiliated with a national brand. (The full list of eligibility requirements is on LISC’s site.)

In keeping with earlier relief efforts from 2020, Uber’s Eat Local package also includes waived and reduced fees for restaurants around restaurant pickup orders and for orders placed via a restaurant’s own website but delivered by Uber Eats. Restaurants can get daily payouts instead of the standard weekly ones, and Uber will also continue matching donations made by customers via the Eats app’s Restaurant Contribution feature.

Uber (and newly acquired Postmates) along with Grubhub and DoorDash first began offering relief packages for restaurants back in March 2020, when shelter-in-place mandates first went into effect in the U.S. Since then, these services have launched various grant programs and assistance efforts, including Grubhub’s Winterization Grant and DoorDash’s ongoing Main Street Strong program.

All of these efforts go some ways towards helping small and independent restaurants, which have been most damaged by the pandemic. What remains unclear is how much grants and relief efforts help when stacked up against the high commission fees third-party delivery service continue to charge these smaller restaurants. That factor remains likely to be a point of heated debate long after the worst parts of the pandemic have subsided.

February 3, 2021

Landed Raises $1.4M, Launches App to Make Hiring Simpler for Restaurant Managers

San Francisco, California-based restaurant tech company Landed announced the official launch of its mobile app that connects hourly restaurant and retail workers with potential employers. The company has also raised a $1.4 million seed round led by Javelin Venture Partners, Y Combinator, Palm Drive Capital, with angel investors also participating in the round.

Landed says it uses a combination video interviews and an “intelligent matching algorithm” to match restaurant job candidates with the most relevant employers. Job seekers download the app, and fill out a profile, including a short video recording, which essentially acts as a digital resume. Candidates are evaluated by Landed’s system based on over 50 data points, among them communication skills, body language, and work longevity. Depending on what an employer wants, Landed can prioritize certain data points over others.

On the hiring side, restaurant managers download the Landed app and input their hiring goals like head count, pay rate, and location(s). Much of the hiring process is then automated: the app can automatically schedule interviews, follow up with candidates, and organize potential employees.

Founder Vivian Wang got the inspiration for Landed after years of working in the retail industry, where turnover rates are typically over 100 percent. Restaurant jobs are similar. Restaurants are also under pressure to make their operations as efficient as possible now that the COVID-19 pandemic has decimated the traditional model. Managers of multi-unit chains, in particular, could benefit from a more streamlined hiring process. The tech-driven model Landed offers restaurants is similar to that of ShiftPixy, which also works with large, multi-unit chains.

Landed’s current customer base includes franchisees of Wendy’s, Chick-fil-A, and discount supermarket Grocery Outlet. The app is currently available in seven metro areas: Atlanta, Reno, Dallas-Ft Worth, Scottsdale/Phoenix, Virginia Beach, and Northern and Southern California.

February 2, 2021

Brightloom Raises $15M, Launches a ‘Customer Growth Platform’ to Help Restaurants With Their Data

Restaurant tech company Brightloom has launched what it’s calling a “Customer Growth Platform” (CGP). The software will enable smaller restaurants to get more valuable insights out of their customer data and translate those insights into marketing campaigns more relevant to customers.

On top of that launch, Brightloom has also raised $15 million from new and existing investors including Valor Siren Ventures and Tao Capital Partners. The company will use its new funds to increase R&D and scale its new product, which Brightloom CEO Adam Brotman calls “a really easy solution for the everyday restaurant brand.”

The move towards customer engagement software is a change for Brightloom, which up to now has been better known for its high-tech cubby system and software that manages front- and back-of-house restaurant operations. Brotman confirmed over the phone last week that the new CGP product is now the company’s main focus.

He explained that this level of technical sophistication when it comes to customer engagement has historically been the territory of the billion-plus-dollar chains (think McDonald’s or Starbucks). But these systems take millions of dollars to build and sometimes up to a year to implement. It’s an understatement to say those numbers are unattainable for most restaurants, from both a cost and time perspective. 

“That’s the problem we’re attacking,” he said. “It should not take months or a year or millions of dollars.” 

Brotman knows a thing or two about these systems, having been the Chief Digital Officer at Starbucks for a number of years. (Brightloom also licensed its previous product to Starbucks last year.) While Brightloom is obviously not mimicking exactly what the coffee giant puts its data to work, he brings an insider’s perspective to the operation, and to the overall conversation around restaurant customer data.

“The biggest opportunity is customer data,” he said of the restaurant industry right now. “That opportunity was on everyone’s minds before the pandemic. Now it’s exploded because everything is so digital.”

Brightloom’s CGP system integrates with a restaurant’s main data source (the point of sale, a data warehouse, etc.) Among the features on the new platform is a product recommendation and forecast tool called SmartSegments, which can predict what customers are likely to purchase next. The results of those SmartSegments can be imported into a restaurant’s existing software for managing marketing campaigns in order to offer customers more relevant offers, upsells, and deals. 

The platform also includes a dashboard with detailed results on different marketing campaigns and regular reports on how campaigns are performing and how they can be improved in the future. 

Brightloom says the CGP platform launched in 2020 as an invite-only beta and is now in use with about 25 different restaurant brands. For now, the smallest restaurant brand Brightloom works with has five units, while the largest has close to 1,000. Brotman says the product does not make sense at the moment for a single-unit restaurant, although that’s another challenge the company is working to solve.

Of course, software that helps restaurants leverage data only works if the restaurant actually owns the data. Right now, ownership of a lot of data lies in the hands of the third-party delivery platforms like DoorDash and Uber Eats. This has been an increasingly problematic issue since the pandemic started, with many across the industry referring to the pandemic as a kind of “a wake-up call” to restaurants about what they are doing (or not doing) with their data.

Right now, most restaurants that aren’t billion-dollar chains are just trying to keep the lights on. However, the industry is not going to go backwards in terms of digital ordering. To the extent that they are able to, restaurants should be thinking about how they will put their data to use once the worst of the pandemic and its accompanying shutdowns/restrictions/lockdowns has passed.

“The more [restaurants] allow that data to be in the hands of the third-party marketplaces, the more they are giving up,” Brotman said. “I do believe there’s a value and a time and a place for these marketplaces. But restaurant owners should be aware and be careful that there’s a tradeoff.”

February 1, 2021

Saudi Arabia: FOODICS Raises $20M for is Restaurant Management Platform

FOODICS, which makes restaurant management software, announced today that it has raised a $20 million Series B round of funding. The round was led by Sanabil Investments (a firm wholly owned by Saudi Arabia’s Public Investments Fund) and STV, with participation from Endeavor Catalyst and Elm & Derayah. This brings the total amount of funding raised by FOODICS to $28 million.

Based in Saudi Arabia, FOODICS offers a suite of restaurant management features that includes a cloud-based point-of-sale system, as well as iPad-compatible apps for inventory management, employee timesheets, digital menus, analytics, and a kitchen display system. According to the company’s website, FOODICS has more than 7,000 customers and has processed more than one billion orders.

The global pandemic has wreaked havoc on the restaurant industry, decimating sales, forcing the closure or reduction of dine-in eating capacity and shuttering thousands of businesses. But at the same time, it has created new opportunity for restaurant software platforms like FOODICS.

As digital ordering becomes more and more the norm and restaurants shift their focus to off-premises meal formats (e.g., takeout, delivery), software platforms can help with that transition. There is a need for coordinating orders, integrating orders with third-party delivery systems and expediting meals once they are ready. Software can also provide valuable data on customer ordering and experiences that can assist restaurants in becoming more efficient.

There are a number of players such as Toast and Olo in the restaurant software space that have been adapting their platforms to new pandemic realities over the past year. Toast, for example, saw its valuation practically double over the course of 2020, and could potentially IPO this year.

With its new funding, FOODICS says it will expand its share in existing markets, accelerate its international presence and expand its Fintech offering.

January 31, 2021

Back to School for Virtual Food Halls

This is the web version of our newsletter. Sign up today to get updates on the rapidly changing nature of the food tech industry.

We’ve said it once (actually, a lot more than once), we’ll say it again: university towns are the ideal testing ground for new meal delivery-related endeavors. Little wonder, then, that when launching its next virtual food hall, hospitality platform C3 (Creating Culinary Communities) chose Graduate Hotels, which operates more or less exclusively across America’s major college towns.

C3 specializes in delivery-only restaurant brands that cater to many different food types, from burgers to caviar. For this latest partnership, it will take over kitchen operations at Graduate Hotel properties, effectively turning those spaces into ghost kitchens for its virtual restaurant brands from which customers can order digitally.

A key piece of this news is that food will be available to the entire community, not just guests of the Graduate Hotel. For restaurant brands under the C3 umbrella, that means exposure to tens of thousands of individuals from student body populations, many of whom are already partial to digital ordering when it comes to how they get their meals. Just ask companies like Aramark, which acquired order-ahead app Good Uncle in 2019, Grubify, which was developed by Columbia students, and robot delivery company Starship’s college-centric user base. There are also, of course, the usual suspects: third-party delivery services like DoorDash and Grubhub.

Universities, and university towns with them, are an obvious testing ground for meal-related tech. Companies like C3 and those above have something of a captive audience, given that most campuses feature lots of bodies in a relatively small geographical area, people eating at all hours of the day/night, and a younger audience that has grown up using technology. Add faculty, staff, local residents, and hotel guests to that list, and that’s a massive potential customer base for C3 and its restaurant brands to reach when it launches at Graduate Hotels.

That we haven’t seen more of these virtual food halls on college campuses isn’t surprising, since students have been largely absent from their campuses — and therefore from college towns — for nearly a year because of the pandemic. However, as of last check, many colleges plan to reopen in the spring. Behaviors around how consumers get their meals has already shifted towards more digital ordering and to-go-friendly formats like delivery. By the time class is actually back in session, these behaviors will be even more firmly cemented into daily routines.

Side note: it would not be surprising to eventually see a virtual food hall like C3 team up with a robot-delivery company like Starship to further streamline operations, get deliveries out faster, and make them more socially distanced. 

Given all that, it seems C3 picked an optimal time to launch its virtual restaurants in the college town market — before everyone else rushes to do the same.

The Automat Comeback is Getting Legit

Another obvious meal-delivery concept that will in all likelihood hit college campuses one day soon is the net-gen Automat, a point underscored by the recent launch of Automat Kitchen in Jersey City, New Jersey.

These new versions of the mid-century staple are just as they sound: high-tech versions of the old cubby-style system a la Horn & Hardart. The difference nowadays is that instead of dropping a nickel into a slot to retrieve a meal, users can order ahead via an app and use a digitally delivered code to unlock the cubby door.

Towards the end of 2020, I wrote that the Automat would make a comeback thanks both to technology and to the industry-wide change towards takeout meals the restaurant biz has absorbed.

The Automat is well-suited for the pandemic era (which will probably last longer than the actual pandemic) because of it’s quick, cheap, and truly contactless nature. There is no human-to-human interaction involved with either placing a meal in a cubby or scanning a code to remove the food. And as ghost kitchens, delivery-only brands, and virtual food halls proliferate (see above), the Automat format looks increasingly attractive. 

Automat Kitchen’s version of it is a hardware/software combo that features made-to-order meals meant to be healthier takes on the comfort foods of yesteryear. It’s located in an office building connected to a shopping mall, so as the population ventures back to physical workspaces and stores, this location will see a lot of traffic.

Automat Kitchen joins the likes of the forthcoming Brooklyn Dumpling Shop as well as Minnow and Starbucks in bringing the automated cubby system to the restaurant experience. Expect plenty of other implementations to emerge this year.

Starbucks is considering more drive-thru-only stores with zero seating, the company said in its recent earnings call. Other possible future formats include significantly smaller location sizes and the ever-popular double-drive-thru lane concept.

Chipotle is testing out carside pickup at 29 of its locations in California. Customers order via the Chipotle app and, upon arriving at the restaurant, hit the “I’m here” button to get their food.

Mealco, a company that helps chefs create delivery-only brands, raised $7 million in seed funding. The round was led by Rucker Park Capital along with FJLabs and others.

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