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Daily news and analysis about the food tech revolution

Restaurant Tech

Square Moves Into the Restaurant Back of House With Square KDS

With COVID-19 restrictions putting the future of the restaurant front of house in question, many restaurant tech companies are turning to the back of house as the next area for innovation. Case in point: Today, Square, a company best known for its payments system, unveiled a kitchen display system that organizes and displays the flow of tickets coming into the back of house from multiple different sales channels. The feature is available to new and existing Square for Restaurants subscribers, according to a press release sent to The Spoon.

Dubbed Square KDS, the system replaces paper tickets and can process orders coming from multiple different ordering sources — of which there are many these days. With restaurant dining rooms either closing again or operating at reduced capacity, more customers are ordering via delivery platforms (e.g., DoorDash) or restaurants’ digital storefronts, in addition to the business’ in-house POS system. The idea is to do away with humans having to manage these multiple order streams by automating the organization of each ticket and in the process speeding up the time it takes to receive, cook, and prep an order and get it out the door.

According to today’s press release the KDS system can also track how long the kitchen is taking to prepare orders at each step of the process. The feature is available to Square for Restaurants customers as of now, with the option to try the product free for 30 days. 

Square’s new system is tackling the same challenge delivery integrators like ChowNow, Chowly, and Ordermark have been doing for some time now. The big difference is that Square is also a payments processing company with an existing suite of restaurant tech including a POS system. In theory, at least, that means adding one less piece of tech to the stack for restaurants that are already using the Square for Restaurants system, of which KDS is now a part. At a time when restaurants have an overwhelming number of options to choose from when it comes to technology, a simpler setup could be enticing. 

Square’s move into the back of house is also wise considering the demand these days for ghost kitchens and the number of restaurants shifting from brick-and-mortar locations to delivery-only business models. In many cases, the days of the traditional restaurant dining room are gone as businesses evolve to stay relevant with the (highly turbulent) times. Restaurant companies must do the same, which is what Square looks to be doing with this latest product.

The Delivery Hero-Woowa Bros. Merger Faces Antitrust Hurdles

The proposed $4 billion merger between Berlin, Germany-based Delivery Hero and South Korea’s Woowa Brothers now faces regulatory hurdles around antitrust concerns, according to The Korea Herald. Some South Korean lawmakers have gone as far as to request the deal get scrapped on the grounds that it is anti-competitive.

In response, South Korea’s antitrust watchdog, the Korea Fair Trade Commission (KFTC), said it would give permission for the deal on the condition that Delivery Hero offload its Yogiyo subsidiary. Yogiyo is South Korea’s second-largest food delivery service, after Woowa’s Baedal Minjok operation. The merger would give Delivery Hero an 87 percent stake in Woowa, and the combined user bases of the two would make up 98.7 percent of the entire restaurant food delivery market in South Korea. Needless to say, concerns abound about what this marketshare would do for competition in the fast-growing South Korean food delivery space.

The situation isn’t unique to Delivery Hero. Antitrust concerns plagued Amazon’s investment in Deliveroo for well over one year. One big reason that deal finally went through was the pandemic’s impact on the restaurant biz, which had a ripple effect on Deliveroo’s business. Similarly, Takeaway.com’s merger with Just Eat faced similar regulatory concerns, though it took far less time for that deal to go through than was the case with Amazon. Regulatory issues were one reason Uber Eats likely killed its ambitions to acquire Grubhub this past summer. The newly formed Just Eat Takeaway.com eventually won the Grubhub bidding war, and there is always a chance that deal could come under regulatory scrutiny before it goes through.

Delivery Hero made clear it will fight the KFTC’s conditions, with Reuters noting the service will “challenge” the recommendation and that Delivery Hero sees it as “a starting point for negotiations.” It will, however, slow the deal down in all likelihood.

Brooklyn Dumpling Shop Adds Miso’s Flippy Robot to its Automat Concept

In addition to feeding you, the Brooklyn Dumpling Shop wants to create a “zero human interaction” experience. And as Restaurant Business reports today, the company is removing at least one human from its equation by bringing on Miso Robotics’ Flippy to work in its kitchen.

Brooklyn Dumpling Shop (BDS) co-founder Stratis Morfogen told Restaurant Business, “Miso is executing the full kitchen operation, which will be available in the third quarter 2021. Until then we will be using countertop portable versions in Q1 of 2021.”

What Morfogen seems to be referring to there is that eventually his company will install Flippy ROARs, which run on rails above the fry station. For now, his store will use the ground-based versions.

The Brooklyn Dumpling Shop, which is slated to open its first location in December (and, confusingly, in Manhattan), is bringing back the old Automat concept. Customers will order their meals via a kiosk or mobile app. Once ready, BDS stores each order in its own a temperature-controlled locker until the customer arrives to retrieve it.

The timing is certainly right when it come to having fewer humans involved in the preparation of your restaurant food. The COVID-19 pandemic is more widespread than ever and causing another round of restaurant dining room closures. Creating a restaurant where you don’t have to interact with another person helps reduce the vectors of human-to-human transmission of the virus.

Robots like Flippy are also finding accelerated interest from restaurants because they can work around the clock, don’t get sick and can create more social distance for employees inside a kitchen. White Castle recently announced it was adding ten more Flippys to its roster after an initial pilot earlier this year.

For BDS, the addition of Flippy plays into a bigger expansion plans for the company. As Restaurant Business wrote in today’s post, Brooklyn Dumpling Shop also signed a deal with Fransmart to franchise the brand with the possibility of adding 1,000 locations across North America.

New Restaurant Restrictions Put the Value of Restaurant Tech to the Test

States and cities across the U.S. have imposed new restrictions and in some cases lockdowns that will once again shutter indoor dining. As they’ve done in the past, these restrictions once again call into question how restaurant tech can help restaurants pandemic-proof themselves and stay in business.

A stay-at-home order for Chicago residents goes into effect today. Restaurants must close by 11 p.m. each night and may only offer delivery, takeout, and outdoor seating. The city didn’t completely shutter indoor dining; it’s allowed so long as tables are within eight feet of an open window. But given Chicago’s typical wintertime temperatures, neither that nor patio seating will likely be popular options for diners right now.

New Mexico, and Oregon have imposed far tighter restrictions. Effective last week, Oregon restaurants and bars must return to takeout- and delivery-only service. New Mexico has similar restrictions as residents shelter under a two-week-long stay-at-home order.

Likewise, restaurants in Washington State and Michigan must halt indoor dining and stick to takeout and delivery models. Other states, including Minnesota and New York, have imposed curfews on restaurants, and for everyone, the threat of another lockdown looms large.

One difference this time around is that unlike in March, restaurants have more tools at their disposal when it comes to fulfilling off-premises orders. Since the early days of the pandemic, most restaurant tech companies have offered so-called “contactless” solutions that minimize human-to-human contact. Some parts of those packages, like QR-code-based ordering for the dining room, will be of little help right now, since there is no dining room in many places. But other features, such as software to power online order processing, could help restaurants fulfill takeout tickets faster and in a more organized fashion. Elsewhere, delivery integrators a la Chowly and ChowNow are now more widely used than in March and help restaurants manage delivery orders coming through multiple sales channels (DoorDash vs. Uber Eats vs. Caviar, for example). 

The option to go virtual is also more widely available. That point was underscored recently in the massive $120 million sum Ordermark raised for its NextBite platform, which pairs restaurants with kitchen space to help them develop and operate virtual restaurant brands. Along those lines, countless options for ghost kitchens have sprung up from the likes of Zuul, Virtual Kitchen, ShiftPixy, and many others. Still others, like restaurant chain Wow Bao, offer creative takes on the ghost kitchen/virtual restaurant concept that could benefit not only themselves but other local restaurants.

These and other tech solutions will undoubtedly help restaurants as they navigate new lockdowns and restrictions. The unknown factor is whether they will be enough. Big-name QSR brands have the deep pockets to turn their drive-thrus into digital innovation centers and reinvent their physical footprints, and restaurants with a certain level of demand will find ghost kitchens useful for pandemic-proofing operations. 

The indie restaurants will, however, struggle more than any other restaurant type. These are businesses that have neither the money to invest in sophisticated tech solutions nor the demand to justify a big ghost kitchen operation. Fee caps may help as far as delivery orders go: cities across the country have implemented mandatory caps on the commission fess third-party delivery services can charge these businesses, and if stricter lockdowns ensue, other municipalities may do the same. 

None of this guarantees a future for independent restaurants. One thing that hasn’t changed, not yet anyway, between previous spikes in the pandemic and this one is that off-premises remains a lifeline for restaurants, not the lifeline. Many restaurants still grapple with the fact that they were built — from the food they serve to the atmosphere they provide — for an on-premises experience. Developments to turn on-premises experiences into those suited for takeout and delivery are moving fast. Unfortunately, the pandemic is moving faster. Seen in that light, restaurant tech’s big priority right now should be helping smaller restaurants complete the transition from the dining room to the living room.

Lyft vs. DoorDash

We knew a DoorDash IPO was on the way, and it arrived this past week packaged with news that the company turned a profit in Q2 and has enough cash stockpiled to float along for quite some time. Throw on top of that DoorDash’s recent win on Prop 22 and its popularity among U.S. consumers, and it seems as if the company and its controversial business model for restaurant delivery are are unstoppable.

Or are they? The other big news this week came from rideshare service Lyft. Cofounder and president John Zimmer said on the company’s earnings call this week that Lyft had spoken with restaurants about many issues plaguing third-party delivery, including the sky-high commission fees companies like DoorDash charge per transaction. 

“These businesses want to partner, someone to help them move their goods from point A to point B, but one that does not step in between them and their customers,” he said. In other words, restaurants need someone to deliver the actual food but not necessarily own the order and payment process or the customer relationships (and data). Lyft more or less said it’s aiming to create that delivery model.

Even just one year ago, making this model a successful play for restaurants on a widespread basis would have been a long shot. The technical logistics of delivery are complex. A sophisticated mobile order app a la Starbucks would cost a restaurant tens if not hundreds of thousands of dollars to make. Apps have to allow users to browse a menu and order meals, and they have to be secure around processing payments and storing customer data. With a few exceptions, using a third-party delivery platform for this piece of the delivery stack has historically been the easiest and most cost-effective path for restaurants.

In the early days of the pandemic, restaurants had to either accept this situation and use a third-party delivery platform’s entire stack or risk going under. (A lot of them went under anyway.) But over the last few months, a number of different options have surfaced that allow restaurants to power their own digital storefronts and only rely on delivery services for the last mile. ChowNow, Toast, Lunchbox, . . . the list gets longer each month. Each of these services offers the ability to power a branded storefront through which the restaurant maintains the direct relationship with the customer but doesn’t have to go out and build a mobile order app from the ground up. Most of these services also partner with the major delivery platforms, who still handle the last mile. Restaurants would still have to pay a small commission fee for the actual delivery, but it’s drastically lower than the 30 percent it can reach to when using the full stack.

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Lyft’s comments at its earnings call this week suggest the company is ready to capitalize on this trend. Imagine a restaurant using a system like ChowNow’s to power its mobile ordering and payments. The restaurant controls the branding, menus, prices, and customer relationship. Integration with Lyft’s software would mean once an order is placed, a Lyft driver would retrieve the food and drop it with the customer. Lyft is also well-established across the U.S. and claims to have more than 1 million available drivers, so its existing user base could make it additionally attractive to restaurants and their customers.

The question is whether this approach could differentiate Lyft enough to make much of a difference. After all, restaurants nowadays can approach a similar delivery model by processing orders through a company like ChowNow then letting an established delivery player like DoorDash handle the last mile. Lyft would have to offer ultra-competitive rates on commission fees and an extremely wide delivery radius to make itself stand out.

Zimmer said on this week’s call that it was still “early days” for this concept, though Lyft already has a partnership with Grubhub for a separate initiative. But between the pandemic, Prop 22, DoorDash’s insane growth numbers, and all sorts of other controversies, the need for a new delivery system gets more urgent for restaurants each week. This one might be a viable option. 

Driving Towards a New Kind of QSR

Meanwhile, over in QSR realm, big-name brands appear to be ditching the dining room en masse for the long term. If you had any lingering doubts about that, look to the last few month’s developments in the space:

  • Wendy’s struck a deal with Reef to kickstart its ghost kitchen strategy. The brand is also considering drive-thru-only store formats
  • Chipotle announced plans for a new store format that is essentially a ghost kitchen with a pickup area. This follows the brand’s efforts to double-down on its drive-thru strategy.
  • McDonald’s unveiled a new store design that consists of a kitchen facility surrounded by drive-thru lanes and a few parking spaces for curbside pickup.
  • Restaurant Brands International, which owns Burger King, Popeye’s, and Tim Horton’s, will modernize its drive-thrus to encourage more digital orders and off-premises meals.
  • Burger King also has a new store design that features a kitchen hanging over drive-thru lanes and a conveyor belt that delivers the food to customers.

The credo behind all of these developments is the same: make it faster, more efficient, and as free of human-to-human contact among strangers as possible. As companies look to speed up wait times and pandemic-proof themselves, we can expect the modernization of the drive-thru — and the death of the QSR dining room — to continue.

The Leading Food Tech Expo is Back on January 11th!

Food Tech Live is back for its third year! This year we’re going virtual and will have a full day of product showcases and programming. Get your free ticket here and, if you want to grab a virtual booth to show off what you’re building for 2021, let us know!

Restaurant Tech ‘Round the Web

NY Gov. Andrew Cuomo announced new restrictions for bars and restaurants that went into effect on Friday. All establishments licensed by the State Liquor Authority must close dining areas at 10 p.m. Only curbside pickup will be allowed after 10 p.m. Cuomo also said that if these measures don’t slow the spread of COVID-19, NY will consider reducing indoor dining capacity.

Third-party delivery service Caviar announced this week it has expanded to three new markets. The Grubhub-owned service is now available in Austin, Texas; San Diego, California; and Miami, Florida, according to a press release sent to The Spoon. 

Dunkin’s line of holiday swag is back. This time it includes bedding, which may or may not be a sign that the world really is going to hell.

 

DoorDash Files for IPO, Could Start Trading in December

DoorDash unveiled its public S-1 filing this morning after confidentially filing to go public earlier this year. The San Francisco-based third-party delivery service is expected to begin trading on the NYSE in mid-December.

Reports of the service going public as soon as 2020 first surfaced in August, along with hints that the company was trekking towards actual profitability, which is still something of an elusive concept in the world of third-party delivery. Today’s unveil of DoorDash’s S-1 filing shows that the company reported a profit for the first time in its history during the second quarter of 2020. The company garnered $675 million in revenue and a profit of $23 million for Q2 2020. The company posted a net loss of $43 million for Q3, but still reported revenue growth of $879 million and has ample cash to fund itself — $1.6 billion, to be exact, though DoorDash has said COVID-related lockdowns played a significant role in its growth and that growth rates in revenue could decline in future.

DoorDash’s forthcoming IPO arrives at a time when demand for food delivery apps is thriving. Data from September shows that sales for these services grew 125 percent year-over-year during that month. DoorDash earned almost half, or 49 percent, of those sales — a significantly higher number than the 22 percent of Uber Eats or the 20 percent of Grubhub.

Restaurant delivery remains the biggest slice of DoorDash’s business, but it’s no longer the only one. Perhaps because of the uncertainty of the current restaurant industry, the company branched out into grocery and convenience store delivery this year, too. It even went as far as opening its own “ghost convenience store” facility in August.

Though all this cash and profitability comes at a cost of its own, a human cost in this case. DoorDash helped bankroll Prop 22, which California voters just passed and which allows third-party delivery services to continue classifying their workers as independent contractors. In other words, they’re saving a lot of money by not shelling out for benefits like workers comp, health care, and paid sick leave. The company also remains steeped in controversy around the high commission fees it extracts from restaurants at a time when businesses are shuttering in record numbers because of the pandemic. 

Unfortunately, money usually talks louder than any other issue on the table. DoorDash’s filing today shows that despite these controversies, the company’s growth is unlikely to slow any time soon. 

R-Zero Raises $15M to Make UV-C Tech More Accessible to Restaurants

R-Zero, a biosafety company that makes an IoT-connected UV-C system, announced this week it had raised $15 million in fresh funding. The round was led by DBL Partners with participation from Bedrock Capital and HAX/SOSV. R-Zero says the new funds will allow the company to ramp up production and deployment of its germicidal UV device, called Arc, and get it into a wider variety of locations including restaurants.

UV-C technology has been in use for over 100 years as a way to disinfect air, water, and surfaces. Historically, the tech been the territory of hospitals, but thanks to the COVID-19 pandemic, it is now making its way outside of clinical settings and into public spaces that at some point in the future could include everything from schools to restaurants to subway cars.

R-Zero, a company actually founded in the midst of the pandemic, is contributing to this development with its hospital-grade Arc device it says can destroy “over 99.99% of pathogens,” including human coronavirus, in a 1,000-square-foot space in under seven minutes.

The portable device is about 6.5 feet high and equipped with BLE, LTE, and GPS connectivity, allowing users to track  and monitor the device remotely via a smartphone — an important point, since UV-C is known to cause skin and eye damage and staff should ideally be out of the room before Arc kicks into its disinfecting cycle. Users can monitor the cycle via their phone and know when it is safe to re-enter the room. The company says in its FAQs that Arc should only be used in unoccupied rooms.

R-Zero’s fundraise comes at the right time. As one panelist noted during this year’s Smart Kitchen Summit, cleanliness and sanitization in restaurants is now “table stakes” for businesses, not to mention a major priority for customers. And while many restaurants remain closed or operating at reduced capacity, this emphasis on sanitization isn’t likely to dwindle, even after the pandemic subsides.

Bringing hospital-grade UV-C tech to local businesses is a relatively new concept, but R-Zero isn’t completely alone in the space. Veteran LED makes germicidal UV-C devices that are in some restaurants currently. Clean Air Systems is another such company. The latter says its technology can “kill 99.99% of Sars-COV2” and other airborne pathogens. 

R-Zero is currently in a number of U.S. restaurants, including Michelin-starred Atelier Crenn in San Francisco and restaurants under the Acme Hospitality group.

Chipotle Finally Launches Its Own Take on the Ghost Kitchen Concept

QSR brand Chipotle is a known leader in the restaurant industry’s current transition from dining room to off-premises formats, but the company has for the most part been quiet in the conversation around ghost kitchens. Up to now, that is. The company today revealed its Chipotle Digital Kitchen a pickup- and delivery-only restaurant that is essentially its own homegrown take on the ghost kitchen concept.

The new restaurant, located in Highland Falls, New York, will open this coming Saturday (Nov. 14). Chipotle said in today’s press release that the Digital Kitchen is meant to drive business in “non-traditional locations” such as dense urban centers that can’t hold a full-service restaurant.

While the restaurant does feature a small lobby with a few seats, there is no assembly line from which to order food and no cashier to ring orders up. Instead, customers must place orders digitally via the Chipotle app or website, or through a third-party delivery platform. Guests retrieve their orders from the aforementioned lobby that is “designed to include all of the sounds, smells and kitchen views of a traditional Chipotle restaurant.” The location can also fulfill larger catering orders.  

Chipotle’s news comes the same week McDonald’s unveiled plans for its own to-go-centric store format that will consist of a kitchen surrounded by drive-thru lanes and parking spaces for curbside pickup. Since Chipotle’s Digital Kitchen is, initially, at least, focused on urban settings with space limitations, it does not accommodate a drive-thru lane. That said, the company has been very public about its intentions to incorporate that format into its stores, and today’s release notes that the new store format “allows for flexibility with future locations.” Drive-thru may not be part of this first location, but it’s undoubtedly on the way as the company opens more of these new store concepts.

With the future of the dining room still very much unknown, there’s something of a mass exodus from that format happening among well-known quick-service brands. Burger King, Wendy’s, Dunkin’, Popeye’s, and Tim Horton’s are just a few names on the growing list of restaurants changing up their store formats.

Chipotle has been trekking towards this shift for some time. In December of 2019, the company announced a few different store format designs for to-go, drive-thru, and delivery orders. 

Make sure to join The Spoon’s Ghost Kitchen Deep Dive event on December 9th. Register here!

Highpper Aims to Make Standalone Robot-Powered Restaurants-in-a-Box

When we write about food robots, typically those robots are like (very advanced) appliances that fit into an existing kitchen. Miso’s Flippy works the fryers, Picnic’s robot assembles pizza, and Spyce’s Infinite Kitchen sits at the center of that particular restaurant, making meals.

So one of the things that makes Tel Aviv, Israel-based Highpper interesting is that its robot is the restaurant. Everything from storage to production to packaging is 100 percent automated and done within a standalone 40-foot-long container that can be set up in parking lots or pretty much wherever you can get power and water. Highpper can run all day without needing human assistance.

That’s the plan, anyway. The company is still in the very early prototype phase, but there are reasons to believe it could come through on its ambitious plans. One such reason is that its founder and CEO, Udi Shamai, is also the president of Pizza Hut Israel, a master franchisee that oversees 90 Pizza Huts across his country. Shamai is also the non-executive chairman of Dragontail Systems, which uses computer vision and AI to automate food quality assessment for clients such as Domino’s Australia. (Dragontail was also named one of our Food Tech 25 in 2020)

Because of Shamai’s background, it’s no wonder that Highpper is starting with pizza. As we’ve said before, if you want to see the future of food tech, look to pizza, and Highpper is no exception. Though, when I spoke with Shamai by phone this week, he insisted that Highpper’s unique value proposition was less about futuristic technology and more about scale.

“I can ship 200 stores,” Shamai told me. “It’s scaled.”

Obviously, the proof will be the pudding to see if that’s the case, but Shamai said that Highpper will open its first third-party branded (Shamai declined to say which brand) standalone pizza operation in June of next year in Israel. Before that, the company will install components of its robots in an existing restaurant, to show off the machine’s capabilities.

One of the obvious uses for Highpper’s technology is automated ghost kitchens. If Highpper’s containers work (and that’s a big if right now), it’s not hard to imagine a parking lot filled with various robo-restaurants, churning out food for delivery, twenty-four hours a day. Speaking of ghost kitchen automation, there is actually another Tel Aviv-based company called Kitchen Robotics, which unveiled its Beastro robotic ghost kitchen earlier this year. Bistro, however, only does cooking and not everything Highpper says its machine does.

Right now, Highpper’s system only makes pizza, with burgers to follow and then the vaguely worded “Asian” food option. Highpper is in the business of selling its containers, not owning and operating its own machines or leasing the robots out as a service. An automated container will cost roughly $350,000 per unit (though Shamai indicated that price might vary a little bit).

Highpper is certainly entering the market at the right time. Euromonitor predicts that the ghost kitchen market will hit $1 trillion by 2030. More immediately, the global pandemic has accelerated interest in food robotics. Highpper’s ability to automate the entire workflow of creating fast food, could make potential restaurant customers pretty high on the company.

Spyce Kitchen Relaunches with All New Robot Kitchen, Dynamic Menu and Delivery

Spyce, the Boston-based robot-centric restaurant, officially announced its revamped concept today. The new Spyce features an all new automated cooking system, a dynamic, customizable menu, and in-house delivery.

The first Spyce Kitchen restaurant burst on to the scene back in the Spring of 2018. The robot used in that incarnation featured a row of bowls that spun to mix and heat ingredients that were dropped into them. This new version, dubbed the “Infinite Kitchen” aesthetically seems more akin to Creator’s burger creating robot.

Spyce’s new food robot makes both salads and warm bowl food, and holds 49 separate recipes. Serving dishes are placed on a conveyor belt that runs underneath the dispensers, which automatically portion out the proper ingredients for each dish. There is also a plancha searing station to cook and dispense proteins and vegetables as well as a superheated steamer to cook pastas. The Infinite Kitchen can make up to 350 bowls in an hour, with the average bowl costing $11.

Food is ordered either through the Spyce mobile app or via in-store kiosk. The new menus feature real-time customization to meet dietary preferences such as keto or vegan, as well as eight different allergen requirements like gluten-free. The menu also lets you adjust to taste preferences like levels of sauce and spiciness. The new Spyce menu does not, however, offer red meat, which has been left off for environmental impact purposes.

Like just about every other restaurant looking to survive this pandemic, Spyce is also placing an emphasis on delivery. There is no dining room to eat in, though people can walk in to order and take out food. The robot and new ordering system work in conjunction with each other to ensure that food is prepared and ready just in time for delivery.

Spyce is extending its precise operational control to delivery as well. The company is using its own in-house delivery fleet, which will help Spyce retain more of the customer experience (and data) and help ensure a good delivery experience. Drivers are W2 employees and will use electric scooters outfitted with special hot side/cold side insulated containers to carry the food.

The new Spyce is located at 241 Washington St. and is open for lunch and dinner every day between 11 a.m. and 9 p.m.. Delivery is currently to the Back Bay, Battery Wharf, Financial District, North End and West End neighborhoods, with the delivery radius increasing to more neighborhoods in the coming weeks. Spyce also plans to open up a second location in Cambridge’s Harvard Square neighborhood later this fall.

Grubhub Launches a New Grant to Get Restaurants Ready for Winter

Grubhub today announced the Restaurant Winterization Grant, a new program that will provide financial support to restaurants as we move into winter and outdoor dining becomes a challenge in many areas of the country.

Done in partnership with The Greg Hill Foundation’s Restaurant Strong Fund, the program will grant $10,000 to “eligible independent restaurants,” according to a press release sent to The Spoon. The funds are intended to provide restaurants with “additional infrastructure and equipment to extend outdoor dining” along with more personal protective equipment for employees.

Wintertime’s arrival coincides with record highs of coronavirus cases in the U.S. As far as restaurants are concerned, the combination of the two makes indoor dining risky in many cases, nonexistent in others. Up to now, restaurants have been able to offset some of that loss with new developments for outdoor dining plans. Now, businesses will need to innovate on those innovations in order to continue to serve customers without expecting them to eat in the midst of 30-degree temperatures or wintery mixes.

Grubhub’s new program is supported by a $2 million grant recommendation from its Grubhub Community Relief Fund, started back in March as a way to support charitable organizations helping restaurants. 

The new program joins other efforts around the country to winterize outdoor dining. Recently, the city of Chicago held a contest asking residents to redesign the outdoor dining experience for winter. Elsewhere, Washington D.C.’s Office of Nightlife and Culture announced a $4 million grant program to help restaurants cover the cost of tents, domes, heaters, furnishings and other outdoor-dining-related equipment. Grubhub is the first third-party delivery service to dedicate a fund towards outdoor dining.

Those interested in applying for funds can do so starting today through the aforementioned Restaurant Strong Fund. Restaurants located in Chicago, New York City, Boston, and Philadelphia, and which have “five or fewer” locations are eligible to apply. The application period ends Nov. 21, and Grubhub has said funds will be distributed by the end of the month. 

McDonald’s Is the Latest QSR to Embrace the Drive-Thru-Centric Restaurant Format

At its McDonald’s 2020 Virtual Investor Update today, McDonald’s unveiled a long-term growth strategy that includes a new loyalty program, more AI and machine learning in the drive-thru lane, and revamped formats for future locations. 

At the Update, which directly followed the company’s Q3 2020 earnings call, CEO Chris Chris Kempczinski and several other presenters outlined the pieces of this new strategy, dubbed “Accelerating the Arches.” 

Technology will play a huge role in future growth, particularly where the drive-thru is concerned. In 2019, the company acquired Dynamic Yield, whose tech can show menu options based on external data, such as the weather or traffic patterns in the area, and is currently installed at about 12,000 McDonald’s locations. At the time of the acquisition, McDonald’s suggested this system would eventually be able to make recommendations based on more personalized preferences and order history for each individual customer. Deploying that capability to the drive-thru lane is now part of the Accelerating the Arches plan (though there’s no definite timeframe).

Also in 2019, McDonald’s acquired voice-tech company Apprente. Some McDonald’s franchisees already have an Apprente-powered voice assistant taking orders, rather than a human being. Experts say Apprente could be ready to scale across the McDonald’s system as early as next year.

Other updates to McDonald’s drive-thrus will include express lanes for digital orders and a conveyor belt that delivers your food without the need for human-to-human interaction. 

Wait times at the drive-thru have progressively increased over the last several years, and the latest data shows that total wait time in 2020 was about 30 seconds longer than 2019 across the QSR sector. Add that to the pandemic-related need for more contactless ordering and more efficient ways of fulfilling off-premises orders (i.e., those outside of the dining room), and it’s no wonder reinventing the drive thru is at the top of the priority list for many QSRs. Burger King also envisions a conveyer belt in the drive-thru, and in terms of more AI-enabled tech and dedicated drive-thru lanes for digital orders, everyone from Dunkin’ to KFC is exploring options.

Like some of those other chains, McDonald’s is also rethinking the physical layout of future stores. Even before the pandemic started its latest streak of record-breaking case numbers, QSRs were doubling-down on off-premises formats and calling into question the future of the dining room. Many, including Burger King and Wendy’s, have announced drive-thru-only restaurants for the future. McDonald’s said at today’s investor Update that it is considering a store format that is just a kitchen serving drive-thru and pickup orders.

Finally, the company will launch a new loyalty app called MyMcDonald’s by the end of next year. McDonald’s today also announced McPlant, its own line of plant-based meats, which will be testing in markets in 2021. 

While all of these efforts are features and initiatives many brands are exploring, McDonald’s sheer size (nearly 40,000 restaurants worldwide) and inevitable influence over others could greatly accelerate the rollout of these technologies into the mainstream.