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Daily news and analysis about the food tech revolution

back of house

ResQ Raises $7.5M for Back-of-House Restaurant Tech

ResQ, whose software platform manages restaurant repair and maintenance tasks, has raised $7.5 million in seed funding, bringing its total funding thus far to $9 million. Homebrew, Golden Ventures, and Inovia Capital led the round, which also saw participation from various angel investors, including Instacart president Nilam Ganenthiran, Gokul Rajaram (Doordash, Board of Pinterest and Coinbase), and AirBnb’s Lenny Rachitsky, among others. ResQ’s restaurant customers, including Yum Brands! franchisee Soul Foods, also participated.  

The company’s technology focuses on a very specific part of the restaurant back of house: repairs and maintenance. Through the ResQ platform, restaurants can request, manage, and pay for a service, as well as manage the documents for these things. 

ResQ also connects restaurants with a network of contractors able to perform those services. The company’s ever-growing list of available services right now includes HVAC, refrigeration, electrical, janitorial, plumbing, pest control, grease trap cleaning, preventative maintenance, and just about anything else needed to keep a restaurant kitchen up and running.

Digitizing the management of such things would, ResQ suggests, help with revenue recovery in the restaurant back of house. The company says restaurants typically spend between 3 and 5 percent of annual sales on repairs, and that the ResQ platform has saved businesses 10 to 30 percent in annual repairs and maintenance spend. 

Keeping costs in the restaurant back of house down has been a topic of growing interest for the last several months. Lockdowns and restrictions stemming from the COVID-19 pandemic decimated already-thin margins for businesses. Many have said digitizing the back of house, whether through inventory management, back office-focused platforms, or maintenance management, is an important way to keep costs down. Granted, much of that talk comes from the tech companies selling these services and the investors funneling money into them. Realistically, smaller, independent restaurants won’t necessarily have the budget to pay for more software, at least not while the industry slowly recovers.

For its part, ResQ has plenty of bigger restaurant chains that are clients in the meantime. That list currently includes Wendy’s, Burger King, Panera, KFC, and Taco Bell, to name a few. 

ResQ will use its new funding to build up its team and launch its service in new markets. Currently, ResQ is available in Los Angeles, Dallas, Phoenix, San Francisco, and Chicago. 

 

Restaurant365 Acquires Back-Office Software Company Compeat

Restaurant management platform Restaurant365 announced this week it has acquired Compeat, which makes software to help restaurants manage their workforce and the back office. Restaurant365 will continue to support Compeat products and customers after the deal goes through, according to a press release sent to The Spoon.

Restaurant365 is itself a back-of-house-focused company, with a cloud-based software platform that gives restaurants a single, digital place to manage their accounting, payroll, scheduling, inventory, and other back-office tasks. The system integrates with other tools in the restaurant, including POS, vendor, and banking systems. 

Compeat offers a similar set of cloud-based tools for restaurants. In addition to its technology, the company will bring its own rather robust list of restaurant clients as well as some hotel chains to the partnership. 

Both companies offer a similar promise to hospitality businesses: to digitize and therefore simplify back-office tasks and in doing so save businesses time and money.

Restaurant365’s announcement comes right on the heels of Toast’s acquisition of another back-office/back-of-house management platform, xtraXCHEF. Other deals, mergers, and acquisitions are bound to follow. The last year has devastated many restaurants’ businesses. For those that managed to survive, keeping a tighter grip on costs is an imperative right now. Many restaurant tech companies claim that digitization and better management of the back of house can help restaurants maintain better margins.

The combination of Restaurant365 and Compeat will serve over 28,000 restaurants. Restaurant365 CEO Tony Smith will lead the new business. 

In the meantime, expect more consolidation for restaurant tech over the next several months as the industry continues its slow recovery phase.

Square’s Back-of-House Display System Now Available for Delivery-Only Restaurants

Payments company Square recently made its restaurant software stack a little more versatile when it launched its Square KDS back-of-house display system as a standalone item available via subscription. The company says doing so will make Square KDS available to restaurant and kitchen operations that don’t necessarily have a POS system, or even a front of house.

Square’s KDS digitizes the ticket stream coming to into the back of house that chefs use to manage and fulfill orders. The system replaces paper tickets and can process orders coming from multiple different ordering sources, including the restaurant’s POS system, third-party online ordering platforms, and third-party delivery marketplaces. Kitchen staff can view all of these orders on a single screen, which provides a centralized place to see all incoming orders at the same time.

The system also includes features like ticket timers and alerts, performance reports, and customized notifications.

The product was originally released in November of 2020 as part of the Square for Restaurants POS software stack. Nowadays, though, not every business needs a POS system, since not every business has a front of house. Square says that offering KDS as a standalone product is “especially useful” for delivery-only kitchens (aka ghost kitchens) and businesses.

Tech that specifically caters to back-of-house-only operations is becoming more commonplace as more delivery-only restaurant concepts surface. While some of the bigger names in the business, like Kitchen United or iKcon, have developed their own in-house tech stacks, plenty of smaller delivery-only operations may find it easier to license software from third-party companies like Square.

Square KDS is now available as a standalone product in the U.S., the U.K., Canada, Australia, and Ireland. In the U.S., businesses can take advantage of a special price of $10/month per device through the remainder of 2021. Square for Restaurants Plus subscribers can access unlimited Square KDS devices at no additional cost.  

Survey: 91% of US Restaurants Will Invest in Kitchen Automation in 2021

The majority of U.S. restaurants have made or plan to make investments in kitchen automation technology in the future, according to new survey data from payments company Square. 

The company just released its “Future of Retail” and “Future of Restaurants” reports to offer an overview of what businesses are investing in from a technology standpoint and how processes and operations are changing.

Notable among the many pieces of data: Ninety-one percent of restaurants surveyed will implement some kind of automation technology into their kitchens if they haven’t done so already. 

It should be noted that Square has some skin in this game, since the company has some technology in the restaurant back of house. Therefore, automation in this context is more about software that runs in restaurants than it is about articulating robot arms making food.

Why the rush to digitize the back of house? “In order to take advantage of opportunities like multiple revenue streams and creative dining experiences, the back of house needs to be buttoned up,” notes the report. Restaurants certainly grappled with things like multiple order streams (e.g., delivery, takeout, etc.) prior to COVID-19. But few would deny the pandemic accelerated the widespread adoption of these off-premises formats, and up to now restaurant tech has only had time to react to the changes, not get ahead of them.

Hence more investment in back-of-house tech. Bruce Bell, Head of Square for Restaurants, said in the report he sees more of a “hub-and-spoke” model these days, where the kitchen sits at the center of a growing number of sales channels. “One channel might be the dining room, one channel might be first-party delivery, one channel might be meal kits, and so on,” adds Bell. “Having the kitchen run as efficiently as possible extends that efficiency into all of those channels,” he said. 

The hub-and-spoke model is already popular with some ghost kitchen setups. For larger restaurant chains, many of which are decreasing the sizes of their dining rooms or eliminating them altogether, this model could become the norm, too.

As far as those formats go, Square’s report found that restaurants plan to offer the following in 2021: curbside pickup (66 percent); drive-thru service (52 percent); drive-in service (48 percent); and drive-through dining (46 percent).

Loyalty programs, digital menus, in-house delivery, and digital ordering and payments are all technologies we can expect to drive these formats as well as the dining room experience in the future.

If you are interested in kitchen automation and robotics, make sure to attend the second food robotics summit on May 18th!

In 2021, Restaurant Tech Investment Will Be All About the Back of House

Restaurant tech investment reached new heights (and dollar amounts) in 2020, but the bulk of that went to software, devices, and other tools meant to power the restaurant front of house. By contrast, in 2021 we will see that balance shift. This time next year, I expect to be writing about the vast amount of investment funneled into making the back of house safer, more efficient, and more automated in many cases.

Investments in 2020 were, understandably, geared towards reopening the dining room in ways that were seemingly safer and less dependent on human-to-human interactions. However, as restaurants closed and reopened, then closed again, interest shifted to ghost kitchens and restaurant formats with little to no front of house in their design. As we’ve said many times over the last couple months, the restaurant industry is not retreating from this focus on to-go orders. Even when dining rooms are once again safe to eat in, ghost kitchens will remain and QSRs will have fewer seats indoors.

That makes now, heading into 2021, the time for optimizing kitchen operations. 

Anyone who’s spent time in the restaurant back of house knows it’s in a league of its own when it comes to orchestrated chaos. Un-orchestrated, too, since dozens of variables can change at any moment and affect the speed and quality at which food leaves the kitchen and gets to customers. Missing ingredients. Workers calling in sick last minute. Eggs cooked too early and drying out under the heat lamp. All of these things the food, the customer experience, and a restaurant’s margins, the majority of which are made and lost in the kitchen. 

There’s already a handful of restaurant tech solutions available right now that hint at how digitizing and automating the kitchen might help the above scenarios. 

San Diego-based Galley Solutions offers an intelligence platform that digitizes processes in the kitchen (inventory and recipe management, purchasing) and uses that data to create a more efficient framework by which kitchens can operate. This centralized data source could bring the many disparate pieces of back-of-house technology together for smoother processes when it comes to meal prep and kitchen management. For example, a centralized data source could populate the digital order forms sent to vendors and at the same time tell the chef how long to leave the burger on the grill.

SousZen, meanwhile, wants a GPS for the kitchen. At Smart Kitchen Summit: Japan, Paul Levins, who helps run the company, explained how the SousZen platform uses machine learning to recognize patterns in the restaurant — how an order is put together, when the kitchen is busy — and can make real-time recommendations for the fastest, most efficient way to do something. It’s not unlike your car’s GPS, which tells you the fastest route from point A to B and can adjust that route in real time in the event of heavy traffic or an accident.

That idea of kitchen systems learning over time and using that information to improve operations is one we will see  more of in 2021 — and, likely, one that will command a lot of investment dollars. Statis.ai is another notable example here, with its “full stack AI operating system for the kitchen” that uses live camera feeds and an electric nose to leverage smell and vision in a restaurant kitchen.

Along with a whole lot of AI will come automation. In this context, though, automation doesn’t necessarily mean a robot flipping burgers or a rotating arm mixing salad ingredients (although there will be some of that). A more widespread version of automation will take the form of systems, like those of Galley or SousZen, that can collect data and use it over time to build new behaviors and processes in the kitchen, make real-time recommendations to workers, and even guide the steps when cooking and putting together a meal. 

A growing interest in back of house tech is already apparent. Besides the above players, other restaurant tech companies that have historically only catered to the front of house are now releasing tools to improve the kitchen. Among them are Square, xtraChef, and many others. Expect funding in these solutions to follow as we head into the next year.

Report: Prep, Cook, Automate – Where Tech Is Leading the Restaurant Back of House

Back-of-house processes in the restaurant tend to involve a lot more legacy hardware and closed-loop systems, which present significantly different challenges than those at the front of house. That in turn has created a slower innovation pipeline and less interest from investors. 

This report will examine current back of house processes and technologies as well as the drivers for innovation changing those things. 

 Back-of-house operations present a huge opportunity for tech companies and other startups willing to tackle the many problems that have yet to be solved in the space. Additionally, technological innovations in robotics, AI and machine learning will change the physical restaurant kitchen along with its labor needs and cooking and delivery systems.

This report is available to Spoon Plus members. To learn more about Spoon Plus, go here.

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.

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

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

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

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

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

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

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

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

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

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

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

Galley Solutions’ Founders Talk Recipes, Data, and What It Will Take to Build a Better Food System

In the food world, San Diego-based tech startup Galley Solutions is perhaps best known for its software system that uses recipe-level data to automate the restaurant back of house. But founders Benji Koltai and Ian Christopher have much bigger plans for the role they want their company to play in creating a more efficient, accurate, and safer food system overall.

I recently hopped on a Zoom chat with Koltai and Christopher — who also happen to be brothers-in-law — to talk about their vision for the future food system, how a system like Galley’s can contribute, and what foodservice businesses can do right now to make their operations more efficient.

You can watch the full video below. Some highlights include:

  • The definition of “food business” is changing as we speak, from college dining halls now offering grab ’n’ go meals to ghost kitchens operating out of grocery stores.
  • Moving forward, restaurants must learn to leverage their recipe-level data to make operations more efficient, cut overall costs, and save on labor and time to accommodate these new formats.
  • Technology is everywhere in the foodservice world, yet for all the different devices and solutions, there is no common dataset to bring those disparate pieces together.
  • A truly efficient back-of-house system will use one source for all the business’s data. For example, a centralized data source could populate the digital order forms sent to vendors and at the same time tell the kitchen robot how long to leave a burger on the grill.

Restaurant Tech Roundtable: Reinventing The Back of House With Digital Technology

In this panel session, you’ll hear insights how how everyone from small operators to the country’s biggest QSR chains are using technology to improve operations, make their kitchens safer and to help roll out new menus in real-time.

Here are Jenn Marston’s take-aways from session:

More automation. Back of house automation isn’t just about robots making burgers. It has much more to do with digitizing operational processes to make them more efficient. That could mean a robotic arm doing manual tasks. But it could also mean using tech to replace paper-and-pen accounting books or taking a better, more granular analysis of food inventory to cut down costs.

More operational efficiency. Related to automation, the back of house will become more about making operational processes faster and more efficient. One of the panelists went as far as to say efficiency is the biggest thing for restaurants to get right. That’s especially true with fewer people eating in dining rooms and instead ordering takeout or delivery meals that are constantly evaluated for convenience and speed in addition to quality.

More transparency. The pandemic has arguably brought a greater desire for transparency when it comes to our restaurant food, and tech-savvy companies will respond with a variety of solutions. That could include installing software in a restaurant that can tell a customer exactly where their order is at any given moment (e.g., “on the grill,” “out for delivery”) or a tool that better informs them of a restaurant system’s security measures.

Spoon Plus Subscribers can watch the full session below. If you’d like to subscribe to Spoon Plus, you can learn more here.