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Daily news and analysis about the food tech revolution

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Forum3 Announces $10M Seed Round On Heels of Launch of Starbucks’ Web3 Loyalty Beta

Today Forum3, a Seattle-based startup that helps companies build Web3-enabled loyalty programs, has announced it has raised a $10 million seed funding round. The company, co-founded by former Starbucks loyalty lead Adam Brotman and Seattle-based VC and ex-Microsoft exec Andy Sack, raised funding from Decasonic and included participation by Bloccelerate, Liberty City Ventures, and Arca, along with strategic investments from Polygon Ventures and Valor Siren Ventures.

The news comes a day after Starbucks launched the beta for Odyssey, the Web3-powered component of the Starbucks Rewards loyalty program. Odyssey allows members to gain benefits through playing games and participating in activities called Journeys. When they complete Journeys, members will earn points and get NFTs (called Journey Stamps) that give them access to exclusive benefits. In addition, members can purchase limited edition NFTs, which will provide them with additional Odyssey points and unique artwork. Some benefits that Odyssey members will have access to include exclusive events and early access to merchandise.

With the Starbucks deal, Forum3 co-CEO Brotman continues his long relationship with his former employer and fully embraces what has become his passion in Web3. Before founding Forum3, the coffee giant’s former Chief Digital Officer was hand-picked to be the CEO of Brightloom, a company that was re-spun as a digital loyalty platform company with a cash infusion from Starbucks. Over the past year plus, however, Brotman had made clear he was all-in on Web3, doing the rounds on podcasts, advising Starbucks on its entry into Web3, and forming a Web3 consultancy at Brightloom before starting his new company.

And to be honest, what Forum3 is now doing sounds a lot like what Brotman had started to build at Brightloom. Earlier this year, Brightloom had begun to put together its entry into the Web3 advisory services business but delayed the announcement until last month. According to Brightloom and Brotman’s Linkedin, he is still part-time chairman at Brightloom, or at least was until this week. My guess is Brotman saw the opportunity to leverage his relationship with Starbucks and make their interest in building a Web3 loyalty program the launch point for a new startup.

Interestingly, this news comes a week after Brightloom launched a new Web3 spinout called Thred, which calls itself a search and discovery platform for NFTs. Thred is led by Ben Straley, former president and chief product officer of Brightloom.

These moves come when NFTs and the broader Web3 space have come down to earth during a general crypto downturn. Despite all of the recent pessimism, it appears that investors still have an appetite for new loyalty and discovery platforms built on top of blockchain technology.

The Effort to Onboard Restaurants to Web3 Continues, But It’s Going to Take Some Time

Over the past year, we’ve seen a rush of enthusiastic entrepreneurs and restaurant-adjacent operators announce initiatives to help onboard the world of dining into the world of web3.

How’s it going so far? Let’s just say it may take some time.

I decided to check in on some of the early efforts and see how things are going. Here’s what I found.

FriesDAO

FriesDAO flew out of the gate, pooling $5.4 million through an NFT sale that the DAO hoped to use to buy or invest in a fast food restaurant. How are they doing?

Things look to be slow-going. Reviewing some of the announcements made via the DAO’s Discord, the group began exploring potentially working with Bored & Hungry to open a second location in June. Those talks don’t seem to have progressed very far. The group also began exploring potential deals to acquire or start a new franchise with a few franchise operators, including a Jersey Mike’s owner. In early August, the FriesDAO admin team announced that the Jersey Mike’s owner they had been in conversation with is no longer looking to sell.

Bored & Hungry

And what about Bored & Hungry, the crypto-centric restaurant that launched in April of this year after restaurant operator Andy Nguyen decided to create a Bored Apes-themed restaurant using one of his Apes (Bored Ape #6184) as the central character?

After garnering lots of early buzz, the restaurant continues to plug along even after the late spring/early summer crypto crash. While there were some reports that the restaurant had stopped accepting crypto as payments, Nguyen called the reports ‘fake news’ and the restaurant continues to do brisk business (with even the occasional Snoop Dog sighting).

BurgerDAO

Late last year, BurgerDAO launched with the hopes of starting a completely Web3-centric burger franchise from scratch. The idea was to raise funds via an NFT drop and partner with a ghost kitchen operator to launch the BurgerDAO initially as a virtual restaurant, with long-term plans to create an IRL physical BurgerDAO location.

Big plans, but according to BurgerDAO founder Al Chen, real life has gotten in the way. On April 1st, Chen sent a message on Discord letting the community know the founders have run into more roadblocks than expected and are also pretty busy with their regular lives.

“…life just got in the way. We both have full-time jobs, families, and all the same shit you all deal with on a day-to-day basis. Long story short, we haven’t had as much time as earlier in the year to devote to pushing things forward on the project.”

Chen made it clear that they haven’t given up on the idea and are optimistic about BurgerDAO, but at this point, hasn’t made any additional announcements.

Devour

Devour isn’t a restaurant concept itself but instead a collection of different platforms that aim to help bring the world of restaurants into Web3. The group is creating its own blockchain token called DevourPAY, which it hopes will become the preferred token of the restaurant industry, and has launched a series of membership NFTs called the Industry Collection. They’ve launched their initial token offering through an ILO (initial liquidity offering) this week and are planning to launch a web3 food marketplace called DevourGO in September.

At this point, it’s too soon to tell how things are going with Devour, but they certainly look busy as they ramp up a bunch of different interlocking components of what they call an ecosystem. The group has something like 5 or 6 different websites, and for a restaurant operator not really accustomed to the world of web3, I have to wonder if the sheer amount of various offerings Devour is throwing out there is a bit overwhelming and confusing.

Brightloom’s Web3 Services

Adam Brotman, CEO of Brightloom, brings some digital payment street cred to the table as the guy who’s credited as the driving force behind Starbucks’ digital ordering initiative. So it wasn’t all that surprising when the company announced they were creating a web3 consulting business to help restaurant operators ease into the world of web3, especially after Brotman started making the rounds early this year talking about the potential of web3 for restaurants.

The announcement came after The Spoon had uncovered that Starbucks had brought Brotman in to advise on their move into NFTs (Brightloom has been careful not to make any announcements about being involved with Starbucks’ effort). At this point, it isn’t clear how much of the web3 push from Brightloom is simply Brotman pushing his own consulting services (he has a separate consulting group called Forum3 on his Linkedin) vs Brightloom trying to become a key player for restaurant web3.

So what do I think after checking in on some web3 restaurant initiatives? Mainly that things are going kinda slow. The crypto crash no doubt took some steam out of web3’s food service sails, but I also think that the world of dining just isn’t quite ready for this transition.

Everyday diners just want to eat and probably are confused by any mention of NFTs or a DAO. The same can probably be said for the vast majority of restaurant operators. And while platform-builders like Devour and Brightloom (and others who have made noise like Lunchbox and Nextbite) are building tools to make things easier for everyone, the reality is infrastructure building is arduous and time-consuming.

Bottom line: The world of web3 may eventually merge with restaurant dining, but don’t expect it to happen quickly.

Yep, It Looks Like Brightloom is Powering Starbucks’ NFT Initiative

Back when we first heard that Starbucks was heading into the NFT business, I suspected a company helping them get there was a startup called Brightloom.

The reasons were pretty straightforward: Not only is Brightloom effectively a carveout of Starbucks former digital business AND Brightloom’s CEO Adam Brotman is the former of head Starbucks digital, but there’s also the fact that Howard Schultz namechecked Brotman at the employee town hall where the subject first came up.

But if there’s any remaining doubt, I think it was put to rest this week when Starbucks published a memo co-authored by Starbucks Chief Marketing Officer Brady Brewer and Adam Brotman (who, on the piece, is titled a “consultant”) about NFTs last week in which the company detailed its plans. Titled We’re creating the digital Third Place, the memo describes how Starbucks sees NFTs as ushering in a “shared ownership model” for loyalty and sees them as digital “access passes” for experiences and rewards.

In some ways, Brotman and Weber’s memo echoes many of the same ideas we’ve heard Brotman speak about when asked about his thoughts on Web3. When I interviewed him in March, Brotman talked about how NFTs can be tickets to unique experiences for a restaurant’s most loyal customers.

Restaurants “know who their best customers are, either by name or some loyalty program,’” Brotman said. “And they give them an NFT. Say, ‘here’s a code to claim your free NFT. And by the way, we’re only giving there’s only ever going to be 300 customers that can own the NFT.”

And at last week’s SimulATE Food Web3 summit, Brotman talked about why he became fascinated with Web3. “Why I’m so turned on by the Web3 space is the idea that there’s this concept of owning a digital collectible that also doubles as an access pass.”

Brotman also discussed how the Web3-powered ownership could be a gamechanger for loyalty programs. “If you don’t understand NFTs or you don’t understand crypto, you don’t need to,” Brotman said. “If any of you ever either invested in a company, or had your own company, or had a stamp collection or a card collection, what they all have in common is that you have some skin in the game and you feel like you’re a co-owner.”

All of this may seem a bit inside baseball. Still, I think it’s newsworthy since there is a small but growing cohort of digital restaurant platformers like Brightloom, NextBite, and Lunchbox jockeying to position themselves as the restaurant onramp to Web3. And so, if Brightloom has indeed locked up the bluest of blue-chip customers (and it looks like they have), they will have established themselves as the early leader in Web3 platform horserace.

If you’d like to watch Adam Brotman talk Web3 (along with Chef Spike Mendelsohn and LA Eats’ Perrin Davidson), you can watch their session on Web3 and restaurants below.

SimulATE Spring: Web3 and Restaurants

Here Are Four Ways Starbucks Could Get Into The NFT Business

Starbucks is getting into the NFT business.

That’s according to company CEO Howard Schultz, who recently held a company town hall to discuss what the company’s plans are for the coming year. Schultz, who retook the reigns of the coffee giant this week, said the company would be in the NFT business before the end of the calendar year.

“If you look at the companies, the brands, the celebrities, the influencers that are trying to create a digital NFT platform and business, I can’t find one of them that has the treasure trove of assets that Starbucks has, from collectibles to the entire heritage of the company,” Schultz said.

While it can often be cringe-inducing when CEOs talk about new digital formats – something Schultz acknowledged by admitting he’s not a digital native – he’s right that the company has many assets that could be tokenized and create new ways to engage with its customers.

So what exactly could Starbucks’ entry into the NFT business look like? Here are a four ideas about how Starbucks could leverage NFTs:

Create a Loyalty Program That Gives Special Rewards for Starbucks’ Most High-Value Customers

Back when Adam Brotman, who used to run Starbucks digital and now is CEO of Starbucks-invested Brightloom came on The Spoon podcast, he suggested that restaurants could reward their most loyal customers by issuing them an NFT.

They could say “here’s a code to claim your free NFT,” Brotman said. “And by the way, we’re only giving there’s only ever going to be 300 customers that can own the Portofino’s NFT.”

Brotman – who Schultz called out in the video above as a ‘digital native’ – highlighted different benefits restaurants could give such as special events, exclusive offers and more. In Starbucks’ case, I can imagine benefits like first access to special drinks or coffee roasts, a monthly free menu item, or digital assets like special coffee recipes.

A Membership Coffee Club

Another potential avenue for a Starbucks NFT could be a subscription coffee club. A club could be something like the Bored Breakfast Club, an NFT-powered subscription service that sends NFT holders special coffee roasts by mail. It could also include some Flyfish-club like benefits like special access to Starbucks’ unique venues like their roasteries.

Access to Unique Digital Experiences

A Starbucks NFT could also be a ticket to unique online experiences such as a tour of coffee locations or virtual online event with coffee experts. When asked about where he sees the metaverse going, Adam Brotman even suggested this as an idea.

“If I’m a Starbucks in the metaverse, I’m not just serving coffee. I’m growing coffee. I’m giving people tours of my farm in Costa Rica. What are the things that I wish I could transport people to experiences that I can’t scale in real life because of distance or cost or physics?”

NFTs Could Be Deep Insights Into Starbucks’ Coffee

One thing that makes NFTs and the blockchain interesting is their ability to provide proof of provenance for food and beverage products. Starbucks has long made noise about its use of fairtrade coffee, so it’s easy to envision how NFTs could be proof of where the coffee was sourced and provide deep insights to the coffee purchaser about the coffee chain of custody and provenance.

While all of this is speculation, I wouldn’t be surprised if one or two of my guesses is close to the direction Starbucks heads with their NFT effort. The company is a leader in digitization of the customer experience and is recognized for having one of the industry’s best loyalty programs.

Finally, given Adam Brotman’s presence at the Starbucks town hall and that the company he now leads, Brightloom, was essentially the result of Starbucks’ attempt to spin out its digital program assets into a standalone company, I wouldn’t be surprised if Brightloom plays a part in whatever NFT efforts emerge out of Starbucks this fall.

Food Tech Patent Watch: Patent Reveals Eatsa’s Robotic Meal-Assembly Machine

Remember Eatsa?

You know, the automat-like bowl food restaurant that was re-spun as a fast-growing (but more boring) restaurant marketing tech company called Brightloom?

I do, mainly because I loved the place. After I visited one in New York City, I wrote that the restaurant could be the future of fast-casual dining.

As it turns out, some – including maybe Eatsa’s investors – didn’t agree with me. I say that because starting in 2019, they phased out the cubbies, changed their name, took money from Starbucks, and, from the looks of it, dropped big plans for automating the back of house with meal assembly robots.

I say that because Eatsa (now Brightloom) holding company Keenwawa, Inc. was issued a patent last month for a meal-making robot. The patent, a continuation patent for one first issued to the company in 2019, shows a system that assembles meals by dispensing different ingredients stored in canisters into bowls and then shuttles the assembled meals off to the cubbies in the front of house.

Drawing of The Eatsa Meal Assembly Machine From Patent Filing

From the patent:

The automatic food preparation and serving apparatus may also comprise the food dispensing mechanism configured to dispense the ingredient from the plurality of food canisters into the bowl or food receptacle, under program control of the one or more processors.

The patent goes into excruciating detail about the system, complete with dozens of images outlining the canisters, the dispensing system, the conveyor belt, the bowls, and even the touchscreen user interface (which looks a lot like those deployed in the actual Eatsa restaurants for consumers to choose their bowls).

The list of inventors on the 60-page plus patent includes the former automation and engineering team for Eatsa, as well as Dave Friedberg, the one-time Climate Corp founder who incubated the company as part of what would eventually become The Production Board holding company.

I have to wonder if Eatsa-now-Brightloom’s owners are looking to license or sell the technology or even revive their ‘eatsa-inside’ strategy. After all, the recent news that Sweetgreen had acquired Spyce to help do exactly what Eatsa did – make food bowls – shows that some restaurants see a future in automated meal assembly.

Time will tell. For now, however, you can take a look back at the Eatsa ordering and cubby system below.

Food Tech Patent News Roundup

The First Patent Awarded to an AI System is in Food

While I thought that artificial intelligence systems will do most everything at some point, I assumed an AI being awarded a patent was one we could sleep on for a few years more.

I was wrong. In the July edition of the Patent Journal, an AI system named DABUS was awarded a patent for an innovation called “food container based on fractal geometry” for a system with interlocking food containers.

This Quartz Africa article describes DABUS’s creator:

DABUS (which stands for “device for the autonomous bootstrapping of unified sentience”) is an AI system created by Stephen Thaler, a pioneer in the field of AI and programming. The system simulates human brainstorming and creates new inventions. DABUS is a particular type of AI, often referred to as “creativity machines” because they are capable of independent and complex functioning. This differs from everyday AI like Siri, the “voice” of Apple’s iPhones.

DABUS’s inventor Thaler submitted the patent application listing DABUS as the inventor since the AI conceived and created the food storage system entirely. He submitted it to patent offices worldwide, including the US, which rejected him because, among other reasons, the US patent office only awards patents (for the time being) to human inventors. However, the South Africa patent office apparently had no such restrictions when it surprised many with an award of a patent.

In retrospect, it shouldn’t be that surprising AI are creating patentable ideas. AIs already write novels and movie scripts, so why not invent novel things like food containers and get them patented?

I’m looking forward to when we see AI start innovating on novel food. We’ve seen what an impact AI had in vaccine development, so it’s not too much of a stretch to see how it could start making a difference on the bioengineering front for foods.

A Patent Awarded for Many Container Within Container Scenarios For Food Storage, Cooking, and More

A fairly wide-ranging patent titled “Multi-function compact appliance and methods for a food or item in a container with a container storage technology” (US011104502) has been awarded to an Edward Espinosa from Spain for a system that enables a variety of container within container use-cases.

One example is a food container within a larger food storage appliance (i.e., a fridge) sending information on status such as freshness, etc. Another is the refrigerator with a microwave oven in one of the compartments.

The patent describes various technologies such as NFC, Bluetooth, voice control, machine vision via an internal camera, and more to enable the container systems to communicate with the appliance. In addition, the system describes the use of smart tags that communicate freshness data from within storage drawers.

I’ve long called for innovations in the core design of the fridge since they’ve largely been the same for the past 100 years, and it looks like Espinosa has definitely given the refrigerator a rethink.

Whirlpool’s Solid State Cooking Patent

Schematic for Cooking System With Directed RF Energy

It’s been a loosely held secret in the appliance industry that Whirlpool has been tinkering around in the solid-state cooking area for a while. This patent describing a system with multi-regional cooking via RF signals shows they are also trying to accumulate IP in the market. At this time, only Miele has commercialized a consumer solid-state cooking appliance, but hopefully, soon, we’ll see a next-generation microwave from a mass-market brand like Whirlpool.

Brightloom’s Adam Brotman Wants to Better Educate Restaurants on How to Use Their Data

One thing the restaurant industry has in abundance right now is data, and as more of the front and back of house get digitized, the amount of data will only grow. But unless you happen to be Starbucks, with deep pockets and lots of resources, making sense of all that data is, in Brightloom CEO Adam Brotman’s words, “a herculean feat” that most restaurants simply can’t afford right now.

Brightloom’s data-science-as-a-service platform aims to help restaurants including small- to medium-sized ones, make more sense of their data and get better insights from it via the company’s customer growth platform. With it, restaurants can organize their data to answer questions about who their customers are, how many customers they even have, what they’re buying, and how frequently they’re doing it, among others.

Brotman will be talking more about the importance of restaurant data at The Spoon’s upcoming Restaurant Tech Summit on August 17. As a teaser, we recently got some high-level thoughts from him around why data is important to the future of the restaurant and how businesses can better leverage it. Full Q&A is below. And if you haven’t already, grab a ticket to the virtual show here.

This Q&A has been lightly edited for clarity.

The Spoon: What problem does Brightloom solve for restaurants/the restaurant industry?

Adam Brotman: Brightloom provides restaurants of all sizes with the ability to develop an effective growth marketing strategy using the customer data they already have. At its essence, it is an intelligent marketing platform built around customer transaction data and powered by measurement and predictive modeling.

The Brightloom Customer Growth Platform (CGP) makes the secret sauce previously available only to giants like Amazon and Starbucks — data science and continuous optimization — available as a simple and affordable service to the huge segment of the market for whom the “build-your-own” option just isn’t a reality, especially now. With the CGP, restaurants can deliver personalized, relevant, and rewarding experiences to their customers that drive higher customer engagement and measurable business results.

We start with a brand’s existing data, we run it through our proprietary ML models and then the CGP provides insights and analytics around the brand’s digital customer base and digital business. Next, the CGP delivers smart segmentation that allows a brand to easily run a series of personalized marketing campaigns on their own channels.

What is the biggest change in terms of the restaurant industry’s approach towards technology as a result of the pandemic?

Last year, COVID-19 forced retailers and restaurants to digitize their operations seemingly overnight, and in turn, brands digitized a majority of their customer relationships. In fact, The Boston Consulting Group found that one-third of restaurants’ digital customers ordered online for the first time during the pandemic. With vaccine distribution well underway, signs of economic relief, and regional restrictions loosening, it’s paramount for restaurants to leverage technology in order to maintain these new digital relationships and drive sustainable revenue.

In the years leading up to the pandemic, brands have competed on customer experience. Now, the battlefront is moving squarely towards digital and omnichannel experiences. Restaurants have an opportunity to convert their new digital customer relationships into a highly effective customer growth strategy. 

What will happen to restaurants that don’t use this time to learn how to better leverage their data?

In short, they are going to be left behind. Restaurants are still reeling from last year’s disruptions, and we saw the pandemic force 100,000 restaurant closures in six months. The good news is there’s tremendous upside and potential for those who are able to adapt and take advantage of newly digitized customer relationships. The QSR, fast-casual, and casual restaurant segments have seen an uptick in purchase frequency for digital customers compared to non-digital customers. Relatedly, recent research found that more than 90% of customers who are fully vaccinated plan to continue to order online at least as often as they do now. Restaurants are sitting on a gold mine of first-party, transactional customer data. The key now is for them to harness it in a way that drives customer retention and sustainable revenue. 

What is the biggest challenge for restaurants right now when it comes to digitization? 

One of the largest challenges we see restaurants struggle with is how to best collate customer data and in turn take action on it. The reason it’s so difficult is because it requires brands to perform a couple of herculean tasks in sequence.

First, they must access and organize their customer data to create customer segments. That alone isn’t difficult, but when you look at it from another dimension — e.g., what product offer should I send this customer — it becomes exponentially more complicated. Virtually no business could afford the human-hours required to do it manually. Instead, brands must use an algorithm and predictive modeling to understand product offers by customer segments instantly across multiple dimensions. Building this algorithm takes data engineers, data scientists, and digital product experts, and most brands don’t have the teams or resources to build it in-house. 

What are you most excited about when it comes to the impact of restaurant technology?

For too long digital leaders have been misled with the notion of a golden customer record. The attitude that more data is better is false. Marketers spend more time collecting and cleaning data than acting on it.

We’ve now reached a pivotal tipping point that will redefine the future of digital experiences and how brands engage with their customers. The digitization of restaurants and the explosion of data and analytics around what customers want has opened seemingly endless possible avenues for digital marketers to explore, ideate, and create. From intuitive payment to streamlined ordering to tailored loyalty programs, I’m excited to see how restaurants will continue to elevate the dining experience for their customers.

What do you think the restaurant industry will look like in five years?

I predict we’ll see a couple of notable shifts. 

First, digital is here to stay and will only increase. Customers crave frictionless experiences. The accelerated shift to digital menus and mobile ordering and payment during the pandemic illuminated a new standard of customer convenience. If I can order ahead and arrange for curbside delivery with a few clicks on my phone, why would I ever return to waiting in line to order and pick up my food?

Second, we’ll see a rebalanced focus on customer retention relative to customer acquisition. It’s commonplace that loyal customers are almost always more profitable. Instead of over indexing on customer acquisition, restaurants will recalibrate their focus on driving sustainable revenue with existing customers based on historical transaction data.

Data: Restaurant Tech’s Biggest Opportunity

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As online ordering becomes more the norm, the next step in on the path to digitization is all about data. More specifically, it is about making sense of the mountains of customer data brought about by the uptick in digital ordering. Think customer order history, dietary preferences, as well as external data like weather, nearby events, and other factors that could impact restaurant traffic.

A company that wants to help restaurants make sense of all this is Brightloom. 

Until relatively recently, Brightloom went by the name Eatsa, and for a time was a restaurant itself, pushing whole hyper-digitized, automated-dining concept long before major QSRs started adopting cubbies and kiosks. The Eatsa restaurant itself didn’t last terribly long. In fact, the company started shuttering these locations in 2017 and by the end of that year was licensing its automated-restaurant technology out to others instead of trying to own the whole stack.

In 2019, rebranded as Brightloom and pivoted sharply away from automated ordering tech to what CEO Adam Brotman refers to as a “data driven personalization service.” Instead of providing cubbies and online order systems for the restaurant front of house, Eatsa now provides a “customer growth” platform through which restaurants can access and analyze their data.

Brotman told me this past spring that the reason for the shift was that digital ordering “was becoming some[thing] of a commodity.” Even before the pandemic shut dining rooms down and forced more restaurants to rely on off-premises channels like pickup and delivery, businesses were incorporating more ways for customers to order digitally. All those order channels — apps, websites, even SMS — produce data that, with the right tools, can be extremely valuable to restaurants in terms of being able to offer customers relevant experiences and upsells.

Boston Consulting Group notes that one-third of restaurants’ digital customers ordered online for the first time during the pandemic. That number is expected to go up, and restaurants will have to meet that demand. “Going digital” nowadays means being able to message and connect with restaurant customers directly, knowing what they buy from how, how often they’re buying it, and through which channels. 

“Even just having a great looking website or mobile app is not easy. Organizing your data and doing data driven, personalized marketing, on your email and push notifications, that is even harder,” Brotman said. 

Brightloom addresses those types of areas for restaurants, and the company has recently seen its popularity among restaurants grow. The company claimed in a press release this month that restaurants using the Brightloom platform “experienced lifts in revenue per guest of 5.7% or more across 23 million guests.” The company has also added larger-name chains, such as Ruby Tuesday and El Pollo Loco, to its roster of customers. Finally, Brightloom also recently launched Brightloom Pro, which includes more customization capabilities for individual restaurant brands. 

Food tech investor Brita Rosenheim recently noted that it’s “dizzying” for restaurant operators to make decisions around how to use their data. Because of that, there is a tremendous opportunity for restaurant tech companies that can partner with these restaurants  to help them “utilize customer data to better uphold their brand, funnel customers into more profitable channels, and make better decisions about merchandising, pricing, and promotions.”

If you want to learn more about this brave new data-centric restaurant world, join The Spoon and guests on August 17 for a virtual Restaurant Tech Summit. Brightloom and Adam Brotman will join the likes of Olo, Delivery Hero, Wow Bao, and many other restaurants and restaurant tech companies. Grab a ticket here, and come ready to ask some questions. 

More Headlines

Bbot Raises $15M Series A for its Restaurant Ordering and Payment Software – The company said it will create new POS and loyalty program integrations with the new funds, and will focus on features for food halls and virtual brands. 

Delivery Service Swiggy Raises $1.25B – The “heavily oversubscribed” round includes the $800 million the India-based delivery service raised earlier this year.

Zenput Raises $27M to Manage Operations for Multi-Unit Restaurants – Multi-unit restaurant operators, grocery stores, and convenience stores can release new operating procedures and health and safety protocols and enforce them across all units. 

Brightloom’s Adam Brotman on the Vital Role of Data in Today’s Restaurant Industry

“Ordering was becoming something of a commodity,” Adam Brotman, CEO of Brightloom, told me over a recent video chat. Data, he said, is “a bigger, more interesting opportunity than just ordering, so we decided to focus on just the opportunity to design an easy to use affordable data science as a service.”

But information about customers is only one type of data restaurants need to be concerned with nowadays. In this video Brotman also talks about the overall role data will play in advancing the restaurant industry and how smaller businesses can better harness it.

You watch our full conversation below and read along via the transcript. Note that the transcript has been very lightly edited for clarity. 

The following interview is available for Spoon Plus subscribers. You can learn more about Spoon Plus here. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ghost Kitchen, Meet the Automat

Inexplicably, I’ve always wished I could have experienced the Automat in its heyday. Created at the tail-end of the Nineteenth Century, Automats consisted of a wall of cubbies containing simple food and beverage items users could unlock for a nickel. It was essentially fast food before fast food existed.

Fast forward to 2020, and it looks like I may yet be able to experience the concept, albeit a higher-tech version of it.

As we chatted on this week during our Editor podcast, the Automat is making a comeback. That’s thanks to restaurant companies launching cubby systems that are equipped with temperature control functionality and that can be unlocked with a user’s own smartphone. Brooklyn Dumpling Shop is the latest to iterate on the old concept, following in the footsteps of Minnow, Brightloom (née Eatsa), and others.

The resurgence makes sense, given the restaurant industry’s sudden shift to off-premises formats and simpler foods that travel well. Which is why I can think of no better location for Automat 2.0 than outside a ghost kitchen.

One of the major selling points for ghost kitchens is that they allow restaurants to operate without incurring the costs of a front-of-house operation. The ghost kitchen as we know it is also specifically designed to serve off-premises formats. Up to now, that’s been primarily delivery, but the pandemic has generated so much interest in ghost kitchens that we’re now seeing different styles of the concept emerge, including those that offer pickup. Kitchen United lists both options on its website, as does DoorDash (for its DoorDash Kitchens facility). Having a pickup option means restaurants can still take advantage of the ghost kitchen format without necessarily coughing up the sky-high commission fees associated with delivery orders.

At the same time, the pandemic continues, and even if it were to magically disappear tomorrow, our heightened expectations around cleanliness and “contactless” restaurant experiences are here to stay. Which is to say, customers are going to want minimized human contact for restaurant transactions for a long time to come. 

It doesn’t get more minimized than the Automat. By way of a hypothetical example, imagine a virtual deli that has a kitchen space from which it fulfills online orders. It would fulfill delivery orders, but also maintain a cubby system outside to hold any pickup orders. Throw a few tables and chairs near the machine where those who want can eat onsite. Other than the smartphones and the digital ordering, the setup isn’t hugely different from the original Automat concept.

Of course, some ghost kitchen companies choose to locate their facilities in former warehouse districts that don’t get much foot traffic. But as we outlined in our recent Spoon Plus report on ghost kitchens, that’s the exception, rather than the norm right now. Most ghost kitchen operators will tell you location matters, and the closer you can locate one to customers, the better.

And actually, we’re already trekking towards this automat-in-a-ghost kitchen future. Besides the above examples, Starbucks launched its Express stores in 2019 that act as ghost kitchens for nearby locations and include a wall of pickup lockers onsite. Other fast food chains have whittled their dining room concepts down to more to-go-friendly formats, and many of these orders are now being fulfilled in ghost kitchens.  

Automats were originally a precursor to fast food. These days, it seems like fast food may yet prove to be the forerunner to Automat 2.0.

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Location-based Picnicking

You may remember a year or so ago when I wrote about Domino’s partnering with a company called what3words to delivery food to street corners, parks, and other non-traditional addresses. 

It seems what3words is at it again with food delivery, this time partnering with Honest Burgers in London to deliver to random swaths of grass in the city’s Clapham district.

What3words’ platform divides the entire world into 3m x 3m squares, which are GPS coordinates. An algorithm then converts the coordinates into three-word addresses to give each a unique (and often bizarre) name (see image above). With this technology, you could literally choose a random patch of a park sans any notable landmarks or other identifiable items and get your burger delivered to your exact location.

The program with Honest Burgers is only running for a few days and restricted to Clapham. But with more of the restaurant experience taking place outside the four walls of the business, a technology like this could become huge. That’s assuming the restaurant biz makes it through winter and and once more heads to outdoor spaces.

Cracker Barrel’s gone the ghost kitchen route. The company said at its earnings call this week that it plans to convert one of its locations in Indianapolis, Ind. to a ghost kitchen that will handle large-scale catering orders as well as some individual orders placed via third-party delivery services. The store will also be used to help fulfill delivery orders from other nearby Cracker Barrel locations during busy times, like the upcoming fall/winter holiday season.

Meanwhile, Shake Shack said this week it has expanded curbside pickup to 40 percent of its stores, and that roughly one third of all app orders are being placed for curbside. The company has plans to extend curbside to 50 of its locations by the end of September, and is also exploring the possibility of more drive-thrus and walk-up windows.

The New York City Council passed a bill that lets restaurants add a “COVID-19 surcharge” of up to 10 percent to a customer’s bill for up to 90 days after indoor dining reaches full capacity. In other words, for the foreseeable future. The bill is an attempt to help restaurants generate additional revenue as the struggle to keep the lights on continues.

Talking 23andMe For Farms, Bioreactors-as-a-Service & Other Crazy FoodTech Ideas With Dave Friedberg

But here’s the thing: most ideas about the future sound a little crazy the first time you hear them.

I had known about Friedberg for some time, in part because was the founder and CEO of agtech’s first unicorn in the Climate Corporation, a company that sold to Monsanto in 2013 for over $1 billion.

More recently I’d been tracking his progress at the Production Board, a company that is essentially an idea incubation factory for food, bio and ag tech concepts. The group is run by what Friedberg describes as “operators more than investors”.

The Production Board company portfolio is strung together by something closer to a grand unified theory about how the world should work rather than any sort of single investment theme. This theory, which Friedberg articulates in a manifesto on the Production Board website, reads as much like a science fiction short story as it does an investment guide and is centered around how the world’s existing food and agricultural production systems are antiquated relics of an inefficient industrial production processes that have taken root over the past couple centuries.

I sat down for a (virtual) meeting with Friedberg recently to talk about how the Production Board works and the progress he is making for upending some of the antiquated food and ag systems. We also talk about Friedberg thinks the future of food could look like ten years or more in the future.

You can see some excerpts from our interview below. In order to see the full interview and read a transcript of our conversation, you’ll want to subscribe to Spoon Plus.

Friedberg on how crazy it is we aren’t harnessing the full technology development to address our problems around food and agriculture:

If a Martian came down to planet Earth and they look at the way we’re doing things they would say, “that’s a little bit crazy. Not only that, but it’s crazy that you guys do things the way you do them given all the technology you have. You can do crazy shit as humans. You can like write DNA and you can like ferment things in these tanks and make whatever molecule you want. And you can pretty much print anything anywhere using different chemistry.” It’s ridiculous that the systems of production operate the way that they do.

Friedberg on the idea behind Culture Biosciences, a company he describes as an AWS for Bioreactors:

If you fast forward 50 years, Tyson Foods and these feedlots and cattle grazing, I mean, it’s so fu**ing inefficient it’s just unreal. It’s mind blowing how much energy and money and CO2 is part of the system of producing meat and animal protein. And we have the tools to make animal proteins and fermenters, so if you could have a fermenter in your home, and it just prints meat when you want it, I think that would be pretty cool. Technically the science is there, the engineering isn’t. And that’s the thing: with a lot of these things, the science is proven, but a lot engineering work still to do. But it’s, it’s feasible. All these things are feasible.

Friedberg on how the Production Board germinates ideas that ultimately become one of their portfolio businesses:

We do primary research, we spend a lot of time with scientists and researchers and identify new and emerging breakthroughs in science and technology. We also spend time in the markets we operate in: food, agriculture, human health, increasingly looking at things like energy materials. And then we try and identify what’s a better way of doing this thing in this market?

So using all these new breakthroughs using all this new science, using all this technology that might be emerging, how can we do something that can transform one of these markets and really do a 10x on it? If it’s not a 10x, if it’s just a 5% better model or a 10% better model, it’s not worth doing. If we can 10x the market – reduce cost or energy by 10 times – then it becomes kind of exciting. And so that’s how we kind of think about operating business opportunities.

The full interview and transcript are available for Spoon Plus customers. You can learn more about Spoon Plus here. 

Toast Announces $400M in Fresh Funds, Now Has a $4.9B Valuation

Restaurant-tech heavyweight Toast announced today it has closed a $400 million Series F funding round led by Bessemer Venture Partners, TPG, Greenoaks Capital, and Tiger Global Management. The round brings Toast’s total funding to $902 million. More importantly, as Toast’s press release notes, it boosts the company’s total valuation up to a whopping $4.9 billion.

Toast has long been a major player in the world of restaurant tech. It’s platform, which launched back in 2013 as a humble POS system, has expanded and evolved over the years to become an end-to-end restaurant-management stack that includes front-of-house, back-of-house, guest-facing, and back office software and hardware tools, as well as an extensive marketplace from which restaurants can choose additional features to integrate (e.g., delivery). 

That the company is now valued at nearly $5 billion also says something about restaurant tech in general. Restaurants in the last few years have added tech tools at an almost blinding pace as demand for delivery and takeout ramps up, orders arrive through multiple different sales channels, and personalizing the guest experience gets ever more important. 

Toast was wise to branch out from just being a POS maker when it did. Restaurant-tech tools may proliferate now, but some predictions suggest businesses have reached a point where they will start to add and evaluate their tech more strategically. Being an all-in-one solution that can address most needs for most types of restaurants have a bigger shot and surviving this ultra-saturated market than those that only cater to a few needs. Being valued at $4.9 billion doesn’t hurt, either.

Not that Toast is alone. Square does its own restaurant-management platform, as do Fourth and HotSchedules, who merged in 2019. Also in 2019, LimeTray brought its system to the U.S. (The company is already an established restaurant tech player in India, the UK, the UAE, and South Africa.) Let’s not forget Brightloom (née Eatsa), who struck a deal with Starbucks to integrate the latter’s mobile ordering and loyalty functions into Brightloom’s existing restaurant-management stack.

For its party, Toast has said it will use the new funds to design new products and capabilities, particularly those that can increase speed of service and restaurant revenue, decrease employee turnover, and help further help restaurants manage their financials.