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Robotics, AI & Data

June 19, 2023

Podcast: How One Operator is Reinventing His Restaurant With Technology

When Andrew Simmons decided to buy a restaurant in January 2020, little did the long-time entrepreneur know that in just a few months, he would be forced to close his doors due to COVID. 

But instead of giving up, he knew he had to get creative to survive. Survive he did, and when he reopened his doors, he kept tinkering, trying to figure out how new technology could make his restaurant more efficient. 

Andrew’s been an open book during the process, open-sourcing his learning as he navigates his journey via posts on Linkedin and a blog. He shares what works and what doesn’t, providing a potential blueprint for other operators thinking about how technology could change their business. 

During this podcast, Andrew and Mike talk about:

  • How the installation of a pizza robot from Picnic completely changed how he does business
  • How one piece of game-changing technology, like a pizza robot, forces other changes and adoption of new technology throughout the restaurant’s workflow
  • The impact of new technology on his unit price for pizzas 
  • How analytics software helped him realize his dine-in business was not profitable and how it changed his thinking about how he ran his restaurant
  • How he was forced to rethink how he used employees through the use of technology and how the employees (and former employees) have reacted
  • His pizza subscription concept and how he believes it can help him pay for opening new restaurants
  • Andrew’s plans to launch a 100-unit restaurant chain built using off-the-shelf restaurant technology

If you are considering using technology such as robotics for your restaurant, this episode is a must-listen! You can listen to the conversation on Apple Podcasts, Spotify or click play below.

June 8, 2023

Sweetgreen: We’re Going Full Robot

Sweetgreen CEO Jonathan Neman told investors this week at William Blair’s Growth Stock conference that the company plans to have its Infinite Kitchen robotic makeline installed at all new locations within a five-year timeframe. The proclamation marks the first time the fast-casual salad chain has indicated they plan to deploy automation across all of its new locations.

According to the analyst’s note about Neman’s disclosures at the conference, the early results from the Infinite Kitchen have been extremely positive:

Sweetgreen’s first Infinite Kitchen (robotic assembly makeline) has proven that the technology works, with zero downtime so far and significant benefits related to faster throughput and improved portioning and order accuracy (order portioning and accuracy have historically been the company’s weakest links in NPS). With less labor intensity and greater job satisfaction so far, we believe the Infinite Kitchen has the potential to structurally change sweetgreen’s labor model, as roughly half of variable labor stems from assembly.

Another interesting disclosure from the conference was the success of the company’s membership program. According to William Blair, Sweetgreen’s sweetpass and sweetpass+ “are yielding incremental guest frequency, with gamified and personalized challenges yielding a 15% frequency lift while sweetpass+ ($10 monthly membership offering a $3 daily discount) is exceeding expectations with a significant lift in frequency (management indicated it would be happy with an incremental two visits per member per month) and low churn.”

These results show the company has improved food production, customer experience, and loyalty by deploying new technology. The result is a stronger bottom line, as Blair predicts the company will continue its fairly impressive 20%+ EBITDA margins in established locations and new build locations in the coming years. For a company that has long stated it’s as much a technology company as a restaurant company, it looks like its approach has continued to yield dividends and keep Sweetgreen one of the most interesting chains in the restaurant business.

June 7, 2023

Robot Restaurant Concepts Have Struggled. Will Kernel Buck The Trend?

Last month, the NY Post revealed that Chipotle founder Steve Ells is plotting a comeback with an automation-heavy restaurant concept called Kernel.

According to the Post, who viewed the startup’s pitch deck, Ells plans to build a chain of restaurants that makes the food centrally in a ghost kitchen and finishes the food in small-footprint retail storefronts. The centralized production facility and the restaurants will feature a significant amount of robotics and automation to produce the food and keep the overall employee count down. According to materials reviewed by the Post, the company states that they believe “a 3-person labor model can work.”

The company has already started building its production facility in NY and plans to launch its first restaurant in NYC in the fall of 2023. Ells is funding the company for now but is looking for investors (hence the investor deck).

As I wrote yesterday, robot-restaurant concepts have often struggled. But given Ells’ experience building a hugely successful restaurant chain, it’s worth asking: Will Kernel buck the trend?

I think they just might. Here are a few reasons Kernel might have a chance at succeeding where others have failed:

Ells is a Proven Restaurant Operator

Unlike the founders of Eatsa, Spyce and Zume, Ells is a restaurant operator with a proven track record of building a restaurant brand from the ground up. During his tenure as the company’s CEO, Chipotle pioneered the fast-casual concept and had one of the most successful IPOs ever for a restaurant chain. Clearly, he knows something about building restaurant concepts.

Ells Has An Intuitive Understanding of Food Unit Economics

During the early days of Chipotle, Ells focused heavily on the unit economics of the burrito business, calculating just how many he needed to sell daily to make a profit. It’s that kind of focus on the different cost-levers that is required when forecasting the cost of building an automation-centric restaurant business that will have higher up-front capex costs but, over time, should ultimately create more efficient restaurants with lower daily operating costs, and isn’t susceptible to the high employee turnover of employees.

The Hub & Spoke Model Can Work If Done Right

Some ghost kitchens have struggled for various reasons ranging from low-quality and high costs. However, fast casual brands have shown to be a logical pairing with centralized commissary kitchens, especially in high-rent markets like NYC (where Kernel plans to open multiple locations). Chains like Fresh&Co have grown fresh-forward concepts across metro areas like NYC through centralized batch cooking of ingredients and doing final-prep in smaller footprint storefronts. If Ells can leverage automation to take on the majority of food prep and save capital to invest in a greater number of smaller stores, he might prove this model as a recipe for the future.

Don’t Build It, Rent It

While many of the early venture-funded robotic food restaurant concepts spent most of their capital building out proprietary platforms, nowadays, a restaurant builder can leverage any of the available platforms to deploy in their food production and food service workflows. One has to look no further than a small operator like Andrew Simmons to see that restaurants can be built by piecing together systems that use robotics-as-a-service payment structures, which lower the overall capex required and allows flexibility to create a workflow over time as needs change and lessons are learned. My guess is Ells is planning on leveraging systems where others have paid all the upfront cost of development, and he can be a customer who benefits from a service and maintenance agreement.

There are still many unknowns about the Kernel concept, including what automation platforms they plan to use (or create) and just what the consumer experience will be like. But if Ells shows the brand-building prowess from his Chipotle days wasn’t a fluke and can be flexible in architecting a production workflow that carries a lower upfront capex hit than early robot restaurant efforts, he may be on his way to building one of the first true robot-powered restaurant chains.

June 6, 2023

A Food Tech Case Study: Four Lessons From the Demise of Zume

Late last week, news broke that Zume, the company famous mostly for raising a whole bunch of money for its pizza robot & cook-on-the-road food trucks concept, had shut down. The company’s demise, first reported by The Information, comes after burning through $450 million and a well-documented pivot away from its pizza robot and delivery technology products to sustainable packaging in 2020.

Here at The Spoon, we’ve followed Zume since its inception and even had its CTO speak at our event just months before the company laid off 500 employees and dropped its automation business.

When Zume inevitably shows up in business school case studies in years to come, here are a few lessons we can extract from the company’s journey:

Startups Should Pick One Thing To Be Good At

You always hear startup founders talk about how important it is to focus, partly because their first product needs to be really good, but also because distractions can keep a team from executing the way they need to execute. Zume was trying to reinvent both food making and food delivery, which meant they were basically running two highly capital-intensive startups in one. They were early enough at pizza automation to have a shot at success, but then they made their job infinitely more complicated by also trying to create an entirely new kind of delivery truck complete with built-in ovens. That’s a lot of time and capital to achieve marginally fresher pizza.

Creating Custom-Designed Delivery Fleets (with Built-in Cooking!) is an Expensive Fool’s Errand

We don’t just have Zume to prove this, but also Wonder, a company that decided they would differentiate by creating an entirely custom-built delivery fleet in which the food was cooked after it left the kitchen. Both of these companies burned through hundreds of millions of dollars and, in the end, realized that they probably should not have invested all that investor capital in something other companies are pretty good at (delivery) just to make sure the food was maybe a little fresher by the time it got to the customer’s door.

Pivots Should be Somewhat Adjacent to Core IP

After spending years and hundreds of millions of dollars to build a food automation and delivery tech business, the company pivoted to a completely different business in sustainable packaging. The company, which had developed a fairly interesting realtime delivery intelligence platform in addition to a food automation platform, likely could have pivoted to a less-capital intensive business in either of these areas and continued to maintain momentum. Instead, they started over in a fairly crowded vertical and never got enough traction to make a go of it.

Tech Companies Rarely Succeed in Creating Customer-Facing Restaurant Businesses

Time and time again, we’ve watched as startups try to build the “restaurant of the future” and fail because building a consumer brand requires focus and capital, capital they don’t have because they’ve spent it all developing technology. Zume, Eatsa, Wonder, and others have shown it’s probably best to choose between being a technology company or a restaurant business, but probably not both. Some may point to Sweetgreen as something of an exception, but even they had to acquire a company in Spyce which had tried and failed to build a consumer-facing brand for their own restaurant robot technology.

May 30, 2023

Serve Robotics Strikes Deal With Uber to Scale Up to Two Thousand Sidewalk Delivery Robots

Uber Technologies Inc. is gearing up for a robotic future, bolstering its partnership with Serve Robotics Inc., a maker of sidewalk delivery robots. Following a successful trial in Los Angeles, the companies announced they would deploy up to 2,000 of Serve’s delivery robots in multiple markets across the United States. The deal marks one of the largest robotic delivery fleet deployments ever announced.

According to Serve, the expansion follows a year of strong growth, which saw the startup’s robotic deliveries grow 30% month over month since their introduction in 2022. Serve says that they currently serve over 200 Los Angeles restaurants.

“We are thrilled to be growing our partnership with Uber,” said Dr. Ali Kashani, co-founder and CEO of Serve Robotics. “This partnership is a major step towards mass commercialization of robotics for autonomous delivery, and it is a testament to the success of our partnership. We are excited to continue our work with Uber to bring this innovative technology to more cities across the country.”

For Serve, fleet expansion is made easier by the higher utilization of their robots in the field resulting from their fleets serving more than one customer in a given market. In the Los Angeles market, for example, the company’s fleet of about 100 robots delivers for both UberEats and 7-Eleven.

According to the company, they are eyeing San Jose, Dallas and Vancouver for possible expansion and have also started working with Pizza Hut in Vancouver and Walmart in Arkansas.

Long term, it will be interesting to see how cities begin to accommodate growing sidewalk robot traffic. Some cities have banned them, while others have begun to classify them as pedestrians.

May 22, 2023

Forget Getting Carded. Amazon Wants to Scan Your Palm To Make Sure You’re Of Age

Attention all baby-faced twenty-somethings who regularly get carded buying drinks: You may soon face a new high-tech twist on the age-old right of passage in the form of palm-scanning.

At least, that’s if Amazon has its way. According to the company, they’ve just added age verification to their Amazon One palm bio-authentication platform. According to a blog post about the new capability, customers enrolled in Amazon One can use age verification by uploading a photo of the front and back of their government-issued ID, such as their driver’s license, and a selfie. Once signed up, customers will no longer have to show ID when buying drinks at participating outlets.

When in a store or drinking establishment, customers can show they are of age by hovering their palm over an Amazon One device. A “21+” message and the customer-uploaded selfie will appear on the screen. From there, the bartender confirms the photo on their screen is the same as the customer’s and proceeds with the sale.

Bars and their customers might see the benefit of using Amazon’s tech-forward solution, especially if it can mean shorter lines. Bars might also save employee resources otherwise dedicated to carding customers. That said, I’m not sure your local watering hole is ready to install a palm scanner just yet.

While some may also be leery of putting too much of their personal data into the hands of big corporate tech, my guess is digital natives who are ok with sharing info online might prefer the convenience of using bio-authentication methods like palm print authentication. Amazon is also quick to point out that they don’t store users’ driver’s licenses in their system, and the IDs are verified by an ISO 27001–certified identity verification provider (ISO 27001 is an international standard for information security). However, they do store a copy of your palm information, which may still be too much for privacy-concerned customers freaked out about bio-authentication.

For those who are interested in getting palmed, you can check it out next time you catch a Rockies game, as Amazon has installed the age verification-enabled Amazon One In Coors Field at the SandLot Brewery and the Silver Bullet Bar.

May 19, 2023

Is Jeff Bezos Eyeing The Buildout of an Underground Delivery Network?

Today, Wendy’s announced they will trial an underground delivery system later this year in partnership with Pipedream Labs. According to the announcement, the system will deliver orders to customers via a carside pick-up portal using “autonomous robots” that traverse an underground pipe system.

Spoon readers might remember Pipedream Labs as the company with big plans to build an underground delivery network of pipes around cities to shuttle food or other items all the way to the home. The company is working with Wendy’s and other restaurants in the near term – you gotta pay the bills after all – but still has hopes to build the bigger vision of a citywide underground delivery network.

In fact, in a recent Twitter thread, Pipedream CTO Canon Reeves said the company is now courting master-planned community builders with a system that would deliver into the home.

According to Reeves, the Home Portal system would look something like this:

Pipedream Labs Home Portal. Photo: Canon Reeves

And the delivery robots look like this:

Pipedream Delivery Robot. Image Credit: Canon Reeves

Building these systems into new master-planned communities makes lots of sense for a couple of reasons, the first of which is retrofitting existing homes for underground to in-home delivery would be extremely hard and very expensive. Master-planned communities present greenfield build opportunities for concepts like this, where customers can be presented with the option as a feature in a new home, and the cost of the home system can be rolled into a mortgage. Home builders can also build out the delivery infrastructure as they lay down other infrastructure, either going underground or along the community right-of-way areas (as they did in Atlanta in a public right-of-way).

But even if the company just focuses on new build opportunities, the idea is still a little far-fetched, the kind of far-fetched where you almost need a utopia-curious billionaire who invests in crazy ideas to get behind something like this.

Someone like, I don’t know, Jeff Bezos:

Jeff Bezos watching a demo of Pipedream Labs Home Portal. Image Credit: Canon Reeves

According to Reeves, Bezos stopped by last month to check out the home delivery prototype. And while Reeves didn’t say anything beyond that – like Bezos is interested in investing in the system – one could speculate that the guy who founded the biggest online ordering marketplace in the US might just be curious about what a future with an underground delivery network might look like.

Could he be there on behalf of Amazon? Maybe. It’s not like Amazon doesn’t invest in delivery infrastructure, and, in fact, the company invested around $40 billion from 2014-2020 and continues to do so. And, let’s not forget, Amazon itself has explored the idea of underground delivery before and was granted a patent for the idea in 2017.

And even if this isn’t an Amazon thing, but a billionaire-investor-Jeff-Bezos-thing, Bezos has shown a penchant for investing in big ideas like space flight, and if Elon can build underground tunnels for shuttling people around in Teslas, Bezos would be entirely in his right to think sending items around underground in pipes might have a future.

May 15, 2023

Two Years After Buying Spyce, Sweetgreen Launches Infinite Kitchen Robotic Restaurant

Last week, Sweetgreen opened the company’s first robotic restaurant in Naperville, Ill, a suburb of Chicago.

The new automated restaurant, which the company calls Infinite Kitchen, comes almost two years after the company acquired Spyce Kitchen, a startup building automated robotic makelines.

The Infinite Kitchen name is not new; Spyce first used the name when it launched its second-generation robotic kitchen platform in November 2020 and, like the new Sweetgreen Infinite Kitchen, the system was visually reminiscent of the Creator burger makeline. The system’s conveyor belt runs under ingredient dispensers that drop customized mixes of fresh ingredients into bowls. You can see the Sweetgreen version of the Infinite Kitchen in action below.

In the video and the press release, Sweetgreen takes pains to make clear that while it sees automation as a way to add efficiency to operations and enhance the customer experience, they are not doing away with humans as part of the Sweetgreen experience.

“Every meal begins with human hands,” says the video’s narrator, “from our local farmers to our team members, all there to guide you through the process.”

With the Infinite Kitchen, Sweetgreen has also rethought the customer process flow, integrating digital touchpoints (including self-service kiosks similar to those from Spyce).

From the release:

When visiting the Naperville Sweetgreen restaurant, customers are greeted by the new “host” position which provides a more personalized connection between team members and guests. To order, customers can utilize self-service kiosks, place an order through the mobile app, or order directly from the restaurant’s host. The new restaurant format also brings in a new Tasting Counter, brand-storytelling digital screens and a revamped merchandising strategy for an authentic Sweetgreen experience at every touchpoint. Customers visiting the store will be able to shop exclusive merch with designs inspired by the new store joining the Naperville community.

According to the company, Sweetgreen will open its second Infinite Kitchen location later this year at an existing restaurant, where the company hopes to learn how to integrate and retrofit the new technology into an existing kitchen.

Long term, expect the company to expand the use of automation to most of its locations. Company CEO Jonathan Neman has said that about half of Sweetgreen’s labor is food assembly. “And this Infinite Kitchen takes the majority of that,” Neman said in November.

May 11, 2023

Recipe for Disaster? ChatGPT is Tasked to Create Unique, Tasty Dishes and Fails Miserably

So you think your newfound ability to prompt ChatGPT for AI-generated recipes could result in a culinary masterpiece?

Hold that thought, advises the World of Vegan, a popular wellness website focused on vegan living. The site recently undertook an intriguing experiment powered by generative AI, where they prompted ChatGPT to conjure over a hundred diverse recipes. The group prompted the AI bot to whip up new and innovative recipes for a variety of occasions ranging from date night dishes to brunch and dessert ideas. From there, the site’s chef team tested each recipe to see how they tasted.

The result? Not good.

All this prompting led to what the group described as “hilariously pitiful results.” With many of the recipes, the chef team at World of Vegan spotted ingredient formulations that “would clash right away and where the mishaps would occur.” The team also felt the recipes were largely “deceptive,” seeming ordinary at first glance but often described as “rich” and “decadent” when they were quite the contrary.

“I had a feeling ChatGPT would struggle with recipe development, since developing recipes is such a delicate mixture of fine art and science,” World of Vegan founder and chef Michelle Cehn told The Spoon. “But I was shocked by just how difficult it was to find a single spring recipe written by ChatGPT that worked with a passing grade. This is a crucial warning for both food bloggers seeking shortcuts and home cooks looking for quick recipes. You’ll save yourself a lot of trouble (and wasted time, energy, and money) by bypassing ChatGPT and opting for a trusted blogger’s highly-rated recipe instead.”

Image credit: Erin Wysocarski

One of the biggest fails cooked up by the World of Vegan team was a vegan scalloped potato dish (pictured above), which the recipe’s chef said had an ingredient list and cooking instructions that were out of order. The resulting dish had an off-putting color, a pungent sauce, and tasted bad.

According to World of Vegan, out of the 100 or so recipes the team cooked up, only one – a cauliflower taco dish – resulted in an appetizing result.

Cehn believes the resulting 1% success rate might be due to ChatGPT’s reliance on what is essentially flawed data, namely millions of subpar recipes drawn from the Internet. With this as its foundation, things are destined to go poorly once the bot is tasked to create a unique recipe.

“A human brain can’t access all that information, so people are likely independently (and unintentionally) creating duplicate recipes online. Since ChatGPT must create a truly unique recipe, it has to get a little weird to create one that’s not plagiarized.”

While one might expect a site focused on creating recipes to be skeptical about AI filling its shoes, I don’t doubt the poor results are that far off from what others may find if they conducted a similar experiment. Good recipes often result from lots of experimentation and applied knowledge, something that you don’t get when a bot freewheels up a new dish idea out of thin air.

And while a more specialized AI trained on the compatibility of various culinary ingredients – something akin to a chatbot based on Chef Watson – might yield better results, we don’t have that, at least not yet.

Bottom line: human-powered recipe creators are still necessary…for the time being.

May 9, 2023

Wendy’s Announces FreshAI, a Generative AI for Drive-Thrus Powered by Google Cloud

Today Wendy’s announced it is working with Google Cloud to develop a generative AI solution for drive-thrus called Wendy’s Fresh AI.

The new solution, which is powered by Google Cloud’s generative AI and large language model technology, will go into a pilot test next month at a Wendy’s company-operated store in Columbus, Ohio. According to the announcement, the new tool will be able to have conversations with customers, the ability to understand made-to-order requests, and generate responses to frequently asked questions. 

In contrast to general-purpose consumer interfaces for LLMs such as ChatGPT and Google Bard, Wendy’s Fresh AI will be walled off and tailored around interacting with customers ordering food at a Wendy’s drive-thru. According to the company, Wendy’s Fresh AI will have access to data from Wendy’s menu and will be programmed with rules and logic conversation guardrails, ensuring that the conversation bot doesn’t spout off about politics or culture when prompted, but focuses solely on helping customers get their burger order right.

The deal is a nice pick-up for Google, which has been on its heels to a degree since last fall when the OpenAI released ChatGPT. Google’s strength in enterprise platforms through its Google Cloud infrastructure services could possibly give it a leg up on other generative AI platforms, even though OpenAI beat the company to the fast food drive-thru lane through its partnership with Presto.

Wendy’s says that it will use the learnings from the pilot to inform future expansion of the platform to other Wendy’s drive-thrus.

Where Is This All Going?

The restaurant quick-service industry has been embracing digital transformation in a big way over the past few years as a way to remedy the industry’s continued struggle with finding qualified workers, and the fast food drive-thru is probably one of the roles could be largely automated with a well-tuned generative AI model. I can envision a hybrid model that utilizes a gen-AI as the first point-of-contact customer interaction layer, but has it backstopped by a remote carbon-based life form (i.e. human) that can step in when there is the first hint of something out of the ordinary. Think of it as a Gen-AI/Bite Ninja hybrid model (while Bite Ninja hasn’t announced any AI solution partnerships for its cloud labor platform, I would be surprised if those conversations aren’t already underway).

May 1, 2023

Four Years After CES, Breadbot’s Robotic Breadmaker is Dishing Out Loaves at Grocery Stores

For robot startups seeking to make a splash at CES, there are a few options: holding a large press conference, making it weird and creepy, or serving cocktails. However, one method stands out above the rest for drawing in crowds: wafting the aroma of freshly baked bread (aka ‘the Subway method‘).

That’s what the folks behind the Wilkinson Baking Company did back in 2019, and the end result was their robot, the Breadbot, became a sensation that year at the world’s largest tech event. The smell of fresh bread pulled in journalists, tech nerds, and passersby like a tractor beam, garnering the type of press that big budget brands like Samsung would envy.

The small Eastern Washington-based company, co-founded by brothers Randall and Ron Wilkinson, has been working diligently to bring their product to market since then. Their goal was to transition from a working prototype to a production-ready machine suitable for grocery stores.

As part of the transition, the company also looked to find a new CEO. The Wilkinson brothers, both in their late sixties, wanted a CEO that could take the early-stage startup from a small LLC with a big idea to one that was mature enough to raise funding and bring the first product to market. Paul Rhynard, a former strategy consultant for McKinsey who also had experience raising capital as Chief Strategy Officer for Russell Investments, stepped in for Randall in April of last year and has since helped raise a seed round of $3 million last summer to fund the build-out of the company’s first production run of robots.

According to Rhynard, the new robot was built after testing the early prototype in a small grocery store in Eastern Washington.

“The machine that was at CES has been dramatically updated,” Rhynard told The Spoon. “One of the key differences is we rebuilt the brain of it. We have fully custom chipboards and a custom tech stack that run the machine. It was a huge update from a control and software standpoint of actually operating the machine.”

The company also made significant upgrades to the mechanical system, including adding four hoppers instead of one, which allows the Breadbot to make four varieties of bread throughout the day. The new Breadbot has significant updates to how it bakes and measures bread quality which, according to Rhynard, allows the machine to achieve more consistent results.

“So now we have a machine that we can scale up and start to place in grocers around the country,” said Rhynard.

And that’s what they’re starting to do. The company built 20 robots and so far has placed seven of them in different grocery chains which include Super One Foods, which is operating a Breadbot in a store in Northern Idaho and two more in Montana, and last month the company installed a Breadbot at Akins Fresh Market in eastern Washington. Three more Breadbots are set to be installed in a high-end Milwaukee, Wisconsin grocery retailer this month.

Rhynard says the company’s business model is a lease-plus-fee model, where grocers pay a monthly fee and a small amount per loaf baked. In return, Breadbot provides a turnkey solution, which includes providing bread mix, yeast, bread bags, and ongoing maintenance.

In return, grocers get what is essentially a bakery in a box that sits in full view of the customers on the store floor. The machine, which can produce up to 200 loaves a day, can produce bread throughout the day, with each loaf taking about 96 minutes from start to finish to make a loaf. In the stores it is currently operating, the Breadbot is making three varieties of bread: Nine grain, homestyle, and honey oat.

According to Rhynard, early on stores aligned the baking of the bread with the hours of the baking staff, which meant the Breadbot baked all the bread in the morning. Now, he says, some stores are going to start experimenting with baking bread during peak shopping hours, from four to seven at night, which will allow shoppers to buy hot, freshly made bread (and take in that fresh-baked bread smell).

Rhynard says that while grocery stores are their key target customer, they are also having talks with other potential types of customers, including cafeterias and the military. The company is also talking to potential customers in places where fresh-baked bread is difficult to come by, including Hawaii, which imports the vast majority of its bread from the US west coast.

To fund further growth, Rhynard said the company is now starting to look to raise a Series A. He knows it will be challenging given the current state of the market, but he’s optimistic the company’s current traction will attract new backers.

For now, though,the company is busy finding new customers looking to pull in shoppers with the smell of freshly baked robot bread.

Meet the Breadbot 2.0

April 18, 2023

2023 Restaurant Tech EcoSystem: Nourishing the Bottom Line

In collaboration between TechTable and Vita Vera Ventures, we are pleased to share an updated 2023 Restaurant Tech Ecosystem map.

We all saw that the pandemic brought a wave of experimentation in the restaurant tech space, but we also know that tech-driven change is not always linear. 

In early 2022, we made bold predictions about the restaurant tech environment in 2023, as we anticipated numerous acquihires ahead (acquisitions primarily driven by tech talent vs strategic tech value). This was due to the tight tech labor market (at the time) and the increasingly challenging funding and interest rate conditions. 

However, with the recent wave of macro tech layoffs, the tech labor market is no longer tight, and we believe more restaurant tech companies may be forced to shut down rather than finding a soft landing through acquisition. We’ve already seen a strong reset on requirements for capital efficiency and valuations of startups in the sector. This macro shift may create potential for rollup opportunities, but many early-stage assets across the sector are overfunded single-point solutions and still subscale.

This is ironic as the need for tech-driven solutions has never been stronger, but companies without the right growth metrics will likely struggle to survive. The inflationary environment is also forcing harder decisions for operators, which may further dampen their willingness to engage with new solutions.

With that in mind, we are pleased to share our 2023 Restaurant Tech Ecosystem, which serves as a current heat map of the broader ecosystem within the US (and is clearly not exhaustive). 

Click here to enlarge/download image of map. Click here for downloadable PDF.

The Journey from Point Solutions to Comprehensive Tech Stacks

While single-point solutions for things like online ordering, loyalty programs, and delivery were popular during the pandemic, we have reached a moment now with perhaps too many point solutions in the market. 

Tech stacks that require too many logins are now in fact creating a cognitive burden for employees, rather than the intended promise of efficiency and ease of use. As a result, operators are beginning to seek integrated systems and smaller tech stacks that can do more. (See commentary in the previous section about rollup opportunities!) 

Restaurant tech advisor David Drinan succinctly identifies the near-term priority for most operators: “The restaurant industry is thirsty for technology innovation that will deliver high margin, incremental revenue.”

On the operational side, managers are still struggling with certain areas such as scheduling and inventory management. These tasks can be time-consuming, especially for independent restaurant owners who have limited resources. As a result, we have seen a growth category of solutions that can automate these functions and provide real-time data to help operators make informed decisions.

Help *Still* Wanted   

The labor shortage in the restaurant industry has been a major challenge for operators in recent years, and labor optimization is still at the top of every operator’s mind. The pandemic caused many workers to permanently leave the hospitality industry, leaving restaurants short-staffed. 

According to the National Restaurant Association, almost two-thirds of US restaurant operators say they do not have enough employees to support existing demand. Instead of replacing this lost workforce, many operators are turning to tech to automate more functions and reduce the need for human labor. 

From digital menus and ordering kiosks to automated kitchen equipment, there are many ways that technology can help restaurants operate more efficiently with fewer employees. By automating basic tasks such as taking orders and processing payments, operators can free up their staff to focus on more complex tasks that require human expertise, such as customer service and food preparation.

Another trend the restaurant industry is grappling with is the changing expectations of younger workers when it comes to the employer/employee relationship. With more emphasis on work-life balance, career development, and job satisfaction, younger workers are looking for more than just a paycheck. 

To meet these expectations, operators are looking for workforce management solutions that can help to improve engagement, development, and rewards for their employees. This includes tools for tracking and managing schedules, as well as innovative solutions for tip outs and other compensation mechanisms. By investing in these solutions, operators can not only attract and retain top talent but also improve the overall efficiency and productivity of their workforce.

Finally, it is worth noting that basic scheduling and labor management tools can have a significant impact on profitability by reducing labor costs and improving operational efficiency. By automating scheduling and timekeeping, for example, restaurants can reduce the likelihood of overstaffing or understaffing, which can be costly in terms of wasted labor or lost sales opportunities. 

In the end, the ability to leverage technology to optimize labor is critical for restaurants to remain competitive in a challenging operating environment. While kiosks and text ordering have shown promise in the QSR space, there are many other opportunities for technology to make a positive impact on the industry as a whole.

Ghost Kitchens: It’s Even More Complicated

In our 2021 restaurant tech retrospective, we had a lot to say about this growing subsector, including the challenges for success (a.k.a. profitability) within the confines of a ghost kitchen business model.  

Now, as the concept of virtual and ghost kitchens continues to evolve even further, it’s important for operators to understand the complexities involved and navigate these challenges to build successful ghost kitchen operations.

One major obstacle has been the potential for tension between virtual brands and existing businesses, where adding virtual brands can lead to direct competition with their own existing businesses. Finding the right tech and operational partner to balance between these two is key.

Additionally, ensuring food safety and maintaining quality standards across multiple brands can be a challenge. Many of the generic virtual brands have lacked distinct value or clear taste standards, leading to underwhelming food quality issues and removal from the major third-party delivery platforms.

Last Mile Magic

Making the economics work for restaurant delivery is a growing priority for the industry. This includes better interoperability between POS/Kitchen systems and delivery providers, better routing and batching systems, localized kitchens, and of course even the mode of transportation for delivery.

We are tracking over 20 companies in the North American unattended last mile category, but it is still early days with most (all?) of the solutions operating in limited geographies and customer trials. So we have left this slice off the infographic for 2023, but don’t forget to keep your eyes on the sky, as we’ve seen recent growth of backyard drone delivery companies which are proving to be faster and better for the environment (if they can outweigh the noise and regulatory concerns).

GenAI on the Menu

Tech entrepreneurs have long dreamed of personalized food recommendations, but few have succeeded in creating true personalization beyond dietary concerns, allergens, or ingredient likes/dislikes. 

However, we have now reached a unique moment where new technologies like ChatGPT will be able to create meaningful and personalized interactions with guests. This has always been the premise of a variety of AI-driven restaurant tech startups, but the ability to leverage the underlying data to engage and interact with guests in a truly personal and conversational manner is game-changing. 

By using data from previous orders and interactions alone, ChatGPT can help to create a more tailored experience for guests, from recommending menu items to offering personalized promotions. ChatGPT can become a critical part of a restaurant’s marketing team by creating content, with the ability to easily translate to different languages as well. This could give operators a crucial competitive advantage as consumers demand more personalized experiences. We have only begun to see the capabilities of ChatGPT with free templates being offered to restaurant operators already.

Moreover, conversational AI like ChatGPT can also be a valuable tool for restaurant operators seeking to understand their own operating metrics. By integrating ChatGPT into their tech stack, operators can ask natural language questions and receive real-time responses, empowering them to make informed decisions about their operations.

Emerging Restaurant Tech Concepts to Watch

  • Chat/AI across marketing and operations
  • Tech-enabled employee support and training (for example, personalized perks, tip-out options, or language choices) 
  • AI for scheduling to free up managers
  • Dynamic pricing
  • Reusable containers + tech-driven circular economy for foodservice 

Looking ahead –  As always, we welcome your thoughts and reactions, and look forward to continuing to follow this sector together in the coming years. Reach out to us: Brita@vitavc.com and hello@techtablesummit.com. 

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