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The Spoon

Daily news and analysis about the food tech revolution

Burger King

The Culinary NFT Trend Is Just Beginning

If you thought the romance between the culinary world and NFTs was a quick spring fling, I have some news for you: This relationship looks set for the long haul.

The latest evidence of an embrace of non-fungible tokens by restaurants comes in the form of new promotion launches over the past few weeks by both Burger King and Dave & Buster’s.

The Burger King NFT promotion is part of an effort to raise awareness around the company’s Keep It Real campaign, a marketing initiative in which it is eliminating 120 artificial ingredients from its menu. Here’s how the program, which is powered by the Sweet NFT platform, is described in Restaurant Dive:

“Guests can scan a QR code on each Keep It Real Meal box to receive one of three collective NFT game pieces, according to details shared with Marketing Dive. When the full set is collected, guests are programmatically provided a fourth NFT, a reward that could be a 3D digital collectible, free Whopper sandwiches for a year, autographed merchandise or a call with one of the campaign’s celebrity ambassadors.

In short, the burger chain is creating a loyalty program that entices consumers with real-world rewards like burgers. In other words, a modern equivalent of the old McDonald’s Monopoly game, only built on the blockchain.

Much like Burger King’s effort, Dave & Buster’s is an NFT powered loyalty program that promises prizes, even if the odds are longer and prizes are essentially just more game tokens. The program, which also uses Sweet’s NFT platform, offers digital cards and tokens in exchange for tickets won by customers playing games in the restaurant. According to the announcement, each location will offer a unique game card and coin, and the first customer to collect all the locations will win a “1 of 1 Super Master NFT and a $10,000 Dave & Buster’s Power Card.”

Beyond these efforts by the big chains, NFTs are also making their way into higher-end cuisine. In July, chef Marcus Samuelsson turned his chicken recipe into an NFT and threw in the opportunity to eat at the chef’s restaurant. In August, food critic Agnes Chee Yan-Wei announced she’s collaborating with NOIZchain.com to create an NFT marketplace for chefs. And then there’s Gary Vaynerchuk’s NFT restaurant, where he plans to offer exclusive membership dining privileges for owners of one of the restaurant’s NFTs.

While much of the early forays into the NFT trend seemed a bit forced, the latest efforts are encouraging for a few reasons:

These NFTs offer real-world rewards, not just digital art. Digital art isn’t a bad thing, but the reality is if NFTs are ever to become mainstream, they need to translate to tangible rewards. Burger King is offering free food, while Buster & Dave’s offers the promise of free gameplay.

The rewards are available to everyone. Sweet, whose NFT platform underlies both Burger King and Dave & Buster’s offerings, call their approach “broad-scale”. What this means is there’s more than just one single copy of a digital asset everyone bids up to the stratosphere, and instead the programs offer rewards that are seemingly within reach and have similar odds to other more traditional game contests.

For those that want it: exclusive real-world experiences. For those who want to pay the price for membership, NFTs can also be a blockchain-powered ticket to exclusive real-world experiences. Vaynerchuk’s NFT restaurant and Chef Samuelsson’s NFT offer tangible but exclusive things high-end foodies would be excited about, like actual food.

So while early efforts to capitalize on NFTs may have been slightly cringe-inducing, the world of food is beginning to fine-tune their crypto offerings into something that real-world consumers might actually want.

Burger King Launches a Ghost Kitchen Initiative in the UK

Burger King said over the weekend it is trialing its first-ever delivery-only restaurant, a location in London, UK that opened on Sunday. The burger chain said this new venture has the potential to reach over 400,000 customers in the North London area.

For its first delivery-only initiative, Burger King has partnered with FoodStars, the commissary kitchen company bought by Travis Kalnick’s CloudKitchens back in 2019. Customers will be able to order meals for delivery via third-party service Deliveroo. Service from Just Eat and Uber Eats will be available soon, too. 

The expansion to delivery-only service comes just as the UK is in the process of opening back up. From today (May 17), restaurants, cafes, pubs, and bars in England, Scotland, and Wales are finally allowed to serve customers inside, with certain restrictions around social distancing and the size of groups. But while consumers will no doubt flock back to restaurant dining rooms, food delivery is expected to remain a popular option for many. This is less about a fear of the dining room and more about new habits getting established during COVID-19-related lockdowns. Many consumers who had never before ordered delivery got comfortable with the concept during the last year or so, and will continue that behavior for the long term.

Burger King is one of many major QSR chains responding to this change. Chipotle announced its own ghost kitchen initiative in 2020, for example. And many chains are redesigning overall store designs to accommodate more off-premises formats. On its recent earnings call, Wendy’s said 30 percent of a planned 1,200 new locations will be “nontraditional units,” a label that includes delivery-only locations and ghost kitchens. Like Taco Bell and Burger King, the chain has introduced new store designs that feature little or no dining room space.

Burger King has not yet said if its ghost kitchen initiative will expand to other UK locations and eventually to other countries. Presumably, the chain will first test the success of this endeavor before announcing any new delivery-only locations.

The Case for More Conveyor Belts in Restaurants

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Spoon Editor in Chief Chris Albrecht posed an interesting question this week for restaurants to consider: Will we see more conveyor belt-style food delivery systems as consumers head back to dining rooms?

The short answer is yes. For now, the concept is most associated with sushi. But new developments in restaurant tech and operations over the last year suggest the conveyor belt will have many uses for many different food types moving forward — sushi or otherwise.

Conveyor belt sushi, better known as kaiten sushi, emerged in the 1950s when an Osaka, Japan restauranteur named Yoshiaki Shiraishi developed the concept to keep labor costs down at his restaurant and ensure quick service for customers.

Labor costs and shortages as well as improving speed of service are two major priorities in the restaurant industry right now, especially as restaurants continue to struggle financially from the pandemic and at the same time have to juggle multiple meal formats, from in-dining room to curbside pickup to drive-thru. And seeing as we’re still in a pandemic, many see limiting the human-to-human contact as another necessary priority. 

Managed properly, conveyor belt systems could easily address all three of the above elements: labor, speed, and safety. In a growing number of cases, they already do.

UK-based chain YO! (née Yo! Sushi) helped to popularize the conveyor belt concept in Britain long before the pandemic. And it seems the chain has made some some pandemic-related changes to its system over the last few months, including integrating it with QR code-based digital ordering. Rather than customers choosing what they want from a rotating display, they scan a QR code at the restaurant and choose and pay for items digitally. The conveyor belt then brings chosen items to customers. Speaking to BBC in 2020, Yo Sushi CEO Richard Hodgson said the belt system takes the place of a waiter, and “rather than using it to showcase the food, we’re using it to deliver the food straight to you.” 

Kaiten sushi never really went out of vogue, so it’s unsurprising we’re seeing more of these systems pop up in the age of social distancing. But the concept is rapidly spreading outside of sushi restaurants, too. As Chris noted a few in his post:

At the Country Garden robot restaurant complex in China, food is carried from the kitchen to the table via an overhead rail system and then dropped down by tether to the customer. At Alibaba’s Robot.he restaurant, also in China, automated robots on tracks deliver food directly to a table. The Robo Cafe in Dubai has a similar system of Roomba-like robot waiters for customers sitting at the counter.

Down the street from me, in Nashville, Tennessee, a mother-daughter duo opened a cheese-and-charcuterie conveyor belt restaurant called Culture + Co.

And with more restaurant orders going off-premises, the conveyor belt is becoming a back-of-house staple, too. Crave Collective, a combination ghost kitchen/virtual restaurant, runs a conveyor belt system through the middle of its facility that shuttles delivery orders to drivers waiting to deliver the food. Both Burger King and McDonald’s have introduced the conveyor belt as a delivery mechanism for getting food from the kitchen to drive-thru and/or pickup customers, though both examples are still just design concepts right now.

It goes hand-in-hand with the move towards less interaction between staff and customers, or at least less handing back and forth of physical things. As some of the above examples show, the format seems especially well suited to getting off-premises meals to drive-thru and curbside customers. I’m not the only one to think so, either. A growing number of restaurants, ghost kitchen operators, and other individuals in restaurant tech have all suggested we’ll see the conveyor belt in more of these scenarios in the future in addition to having them in the dining room.

If you’re interested in the future of restaurant automation, you should attend our upcoming ArticulATE food robotics virtual conference on May 18! Get your ticket today!

Restaurant Tech ‘Round the Web

Drive-in burger icon Sonic is currently testing in-app tipping features through which customers can tip the folks that bring out their food. The company said being able to tip Sonic’s so-called “bellhops” via the chain’s app has been one of the top two requests from customers.

P.F. Chang’s announced this week a partnership with guest engagement and CRM platform Wisely. The latter provides marketing automation tools as well as table and waitlist management features to restaurants, with the underlying goal of creating “more personalized” restaurant experiences for guests.  

Major U.S. restaurant chains reported sales declines in February according to the latest update from NPD’s CREST Performance Alerts. The decline was in no small part due to snowstorms, rainfall, and ice in many parts of the country during the month of February. 

The Restaurant Trash Problem Is Actually a Major Opportunity

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

Here’s a small silver lining alert. The restaurant industry’s urgent shift to off-premises meal formats has created an urgent need to combat packaging waste. And people are finally starting to do something about it.

Let’s not sugar-coat the issue too much. Packaging waste is a major problem, one to which restaurants contribute greatly. Prior to the pandemic, some cities were taking steps to reduce or ban single-use plastics, and materials like polystyrene (aka Styrofoam) were out of vogue. All that changed when the pandemic forced the entire restaurant industry to rely on to-go orders for sales and regulations and company policies began banning the use of reusable containers for health and safety reasons.

In fairness to many restaurants, alternative forms of packaging (compostable, reusable, etc.) are expensive, and can even require operational changes for the staff. It should not be expected that these businesses suddenly come up with strategies for more eco-friendly packaging, particularly not at a time when many still struggle to keep the lights on and many more have shut down forever.

But those that can explore alternative packing options should, and of late we have seen some encouraging developments in this direction:

  • Last week, Just Salad announced its famed reusable bowl program would be available for digital orders. The company also highlighted, in its latest sustainability report, its Zero Waste delivery program, which integrates reusable packaging into the delivery order process.
  • Sweetgreen last week announced its plans to go carbon neutral by 2027. Details were pretty high-level, but the company already uses compostable packaging for its to-go orders, so it would not be surprising to see some additional developments in this area in the future. 
  • Just Salad was also in the news last month for the launch of its new meal kit service that’s free of both extraneous portion sizes and plastic packaging.
  • At the end of 2020, Burger King announced a partnership with circular packaging service Loop to pilot reusable food and beverage containers this year.
  • Ditto for McDonald’s, which struck a similar deal with Loop in the second half of 2020. The mega-chain has other circular solutions in place, too, like its Recup system in Germany.
  • There are plenty of other notable efforts being made here, from individual restaurants, like Zuni in California, to companies like NYC-based DeliverZero, which partners with restaurants to fulfill delivery meals with reusable containers. Additionally, Dishcraft Robotics lends some automation to the process of collecting and cleaning reusables at restaurants.

The bigger point here is that while we have a massive packaging problem on our hands right now, we also have a massive opportunity to change that and introduce new innovations in the process. Those innovations could simultaneously curb our single-use plastics problem while also addressing things like food quality, tamper-resistant packaging, and other elements that have surfaced over the last year. The public’s appetite for to-go orders is not going away. That means the opportunity to change our relationship to packaging is around for the long-haul, too.

Innovation won’t come as a one-takeout-box-to-rule-them-all format. Instead, what we’re more likely to see is collaboration among restaurants, material scientists, package designers, and many others. Nor will the issue be solved next week. Weaning an entire industry off single-use plastics will be a complex, costly undertaking that will probably meet a lot of resistance and a lot of failures.

None of that is a reason to ignore the packaging problem and opportunity. Based on developments from the above companies, many are already willing to start changing the system for everyone.

Restaurant Tech ‘Round the Web

White Castle’s recent ghost kitchen effort in Orlando generated so much demand the location had to close will not reopen until spring, when the chain finds a location better suited to meet that demand.

Food delivery search engine MealMe has closed a $900,000 pre-seed round led by Palm Drive Capital. Slow Ventures and CP Ventures also participated in the round.

For the second year in a row, the National Restaurant Association’s annual conference is cancelled due to COVID-19. Instead, the Association will host a series of virtual events throughout the rest of 2021.

Chipotle Finally Launches Its Own Take on the Ghost Kitchen Concept

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Burger King, Popeye’s to Modernize Their Drive-Thrus With More Tech

Restaurant Brands International (RBI) announced today its plans to “modernize” the drive-thru at more than 10,000 Burger King and Tim Horton’s locations in North America by 2022. Additionally, a drive-thru modernization for Popeye’s, also owned by RBI, will kick off later this year. 

RBI first hinted at this development back in February. Most of the updates and changes are around the digital menu boards on display in drive-thru lanes. These menu boards will be equipped in the future with “predictive selling technology” built in-house that can learn consumer purchasing habits and make recommendations based on those as well as factors like current weather and traffic.

These new menu boards will also incorporate loyalty programs and contactless order/payment features, with the latter being developed in partnership with Verifone. The first prototype of this order/payment integration is currently testing at a Tim Horton’s location in Canada. An additional 15 locations are set to test it by January 2021. 

RBI notes that it already has a number of these newly revamped menu boards installed at its restaurant brand locations: 800 at Tim Horton’s locations in the U.S. in Canada and more than 1,500 at Burger King in the U.S. As noted above, Popeye’s will start to incorporate them into its drive-thru layout later this year.

Making menu boards more dynamic is just one way QSRs are modernizing their drive-thrus to make them faster, more efficient, and more contactless. That modernization, while broad in terms of real-world application, is necessary now that the pandemic has forced the restaurant biz to go off-premises. Drive-thru times are about 30 seconds slower right now than they were in 2019, a lag QSR Magazine says equates to lost revenue, typically around $64,182,668 annually per 2,000 stores. That’s a lag restaurant chains will have to fix in order to remain competitive, since the future of the dining room still hangs in the balance (because pandemic) and drive-thru sales can account for up to 70 percent of a chain’s overall sales.

Efforts from other restaurant companies of late include full-on pivots to drive-thru format from the likes of Shake Shack and Chipotle as the companies add more lanes and increase mobile order-ahead functionality for this format. KFC is exploring license plate-recognition technology, and of course there is McDonald’s Dynamic Yield technology that’s currently installed at thousands of the chain’s locations.

RBI actually has much more than menu boards up its sleeve when it comes to modernizing the drive-thru. The company recently showed off a Burger King prototype that features a conveyor belt system for delivering food to cars and a kitchen built over the drive-thru lanes. Undoubtedly, some of the ideas embedded in that prototype will make their way to other RBI brands and locations in the future.

Burger King Partners with Loop to Pilot Reusable Packaging

Burger King announced today that it has partnered with TerraCyle’s circular packaging service, Loop, to test out the use of resuable food and beverage containers.

Starting next year, select BKs in New York City, Portland (the announcement didn’t specify Maine or Oregon) and Tokyo, will give consumers the option of getting their sandwiches, sodas and coffee in the reusable containers and cups. Customers opting for the reusable packaging are charged an undisclosed deposit upon purchase that is refunded when the containers are returned to a collection system at the restaurant. From there the containers will be picked up by Loop, cleaned and sanitized and reused by Burger King.

If this sounds fast food news sounds familiar, that’s because McDonald’s announced a similar partnership with Loop last month to trial reusable cups in the U.K. next year.

Both of these trials are good news as fast food giants like Mickey D’s and the BK Lounge are both sources of a lot of single-use packaging waste. Their involvement in the battle against waste will be important, as my colleague, Jenn Martson recently wrote:

Whether you love big restaurant chains or fear they’ll be the only ones left after the dust from the restaurant industry upheaval settles, it’s worth acknowledging that they’re typically the ones with the deep enough pockets to invest in new forms of to-go containers.

For people who care about waste and recycling, it should be noted that Loop continues to expand its services. In addition to Burger King and McDonald’s, Loop is broadening its CPG shopping service across the U.S. and its parent company, TerraCycle, is working with Hive’s just-launched online market.

This reusable container partnership with Loop also reinforces Burger King’s sustainability commitments, which include having 100 percent of its customer packaging be sourced from renewable, recycled or certified sources by 2025, and recycling of customer packaging in 100 percent of restaurants in Canada and the U.S. by 2025.

Floating Kitchens of Burger King

Now that its apparent even contactless tech won’t bring back the glory days of the dining room, restaurant chains are on a tear to refit their existing stores to better serve to-go formats. Efforts run the gamut, from dumping the front of house altogether to geofencing the premises for faster pickup orders to building more drive-thru lanes.

Burger King just one-upped all those efforts. The decades-old burger chain has has compiled all of the above and then some into a whopper of a design prototype for future restaurants. Per a BK press release from this week, the new design — which hasn’t actually been implemented yet — is meant to serve multiple order and delivery formats and will be 60 percent smaller than a traditional BK location.

BK plans to accomplish that with the following:

  • A drive-in area where customers scan a QR code then order and pay through the app. Food is delivered to the car. 
  • Curbside delivery and pickup lockers for customers who order ahead via the BK mobile app. The only element missing from this is geofencing tech for the curbside service, which other QSRs are now using to speed up operations.
  • On-premises service. No surprise that this will be a much smaller part of the overall plan moving forward. In one design, BK swapped out the traditional dining room for a covered patio. See below for the other option.
  • Double- and triple-lane drive-thrus. There will also be a walkup window and a view of the kitchen inside.
  • Suspended kitchens and dining rooms are by far the most intriguing addition, and one we haven’t yet see from another QSR. The kitchen and dining room will hang above the drive-thru lane, cutting down on the restaurant’s overall physical footprint. For drive-thru guests, at least, orders are delivered via a conveyor belt system. This particular design also includes a dedicated drive-thru lane for delivery drivers and is, according to the press release, “a 100% touchless experience.”

The first real-life buildout of these designs will be in Miami and the Caribbean in 2021. 

And while we wouldn’t expect other QSRs to produce a carbon copy of the design, it does feel that BK has raised the bar in terms of both standards and innovation when it comes to reformatting the restaurant experience. Some of the elements, like curbside pickup, are already fully established formats across most QSRs. Others, like triple drive-thru lanes, are more an anomaly. The hanging kitchen is, to the best of my knowledge, unheard of at any other QSR. 

The design does raise some questions around what the company will expect of its franchisees. As we saw last year with McDonald’s, retrofitting stores is an expensive, sometimes frustrating endeavor for franchisees. If Burger King wants this wonder of the QSR world to set the new standard for restaurant chains, it will need to ensure new build outs and existing store updates are as pleasant an experience for franchisees as they seem poised to be for customers. 

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NPD: Drive-Thru Visits Increased 26%

If there’s one true off-premises lifeline for QSRs during the pandemic, it’s the drive-thru. (Sorry not sorry, delivery.) The NPD Group underscored that point this week when it announced that drive-thru visits increased 26 percent in April, May, and June, and that this format “will be key to the industry’s future.”

It’s common knowledge at this point that those restaurants equipped with drive-thrus are faring much better than those that have traditionally focused on dine-in service. And some QSRs and fast casuals that historically never really offered drive-thru service are now doubling down on that format, including Chipotle and Shake Shack. 

Even in July, when more restaurant dining rooms were opened, the number of drive-thru visits increased by 13 percent, according to NPD. That number represents the highest increase among all service modes in the restaurant (e.g., dine-in, takeout, delivery).

David Portalatin, a food industry advisor to NPD, said we should expect to see more chains switching to drive-thru in the future. Whether all of them come with a hanging kitchen and conveyor belt setup remains to be seen. 

Fee Caps ‘Round the Web

This week, Santa Clara, CA moved to finally cap the commission fees third-party delivery services charge restaurants at 15 percent. The ordinance is effective immediately and will last “until the end of the pandemic.”

NYC extended its own emergency fee cap of 20 percent to be in effect 90 days after restaurants are allowed to operate dining rooms at full capacity. Your guess is as good as mine when it comes to that distant day.

Back on the Left Coast, Los Angeles also extended its fee cap with the same criteria as NYC. Fees must remain at 15 percent or lower until LA restaurants can operate dining rooms at 100 percent capacity.

Burger King Doubles Down on Tech, Delivery to Lure Finland Away From McDonald’s

Burger King Finland is at it again. The same QSR chain that brought us the “silent drive-thru” last year is now offering free delivery to Helsinki residents who are physically close to a McDonald’s but instead choose to order Burger King.

The so-called conquesting campaign uses out-of-home advertising and mobile technology to target McDonald’s users in an attempt to win them over to BK’s side of the fence. To do that, BK placed outdoor ads strategically near McDonald’s locations (see image above) and then partnered with local delivery service Wolt to turn these areas into delivery hotspots. The stunt was publicized with an influencer campaign, which ended July 1.

This isn’t the first time BK has employed tech to lure would-be McDonald’s customers away from the Golden Arches. In 2019, the chain used geolocation technology to prompt customers already inside McDonald’s to leave within a certain timeframe and get a 1-cent whopper. That promotion featured a whole tie-in with Pennywise the clown and the release of It Chapter Two, further gamifying the experience.

The Finland campaign comes at a time when  many places in the world are just now easing up on their lockdowns. Prior to this, out-of-home advertising hasn’t been all that effective since everyone’s been at home. One research firm predicted a decline in out-of-home advertising over the next few years, since this particular ad type relies on places like subway cars and bus shelters. But on that note, Adweek noted in April that brands were shifting their out-of-home advertising spend to focus on areas still getting foot traffic. Given the uncertain trajectory of the coronavirus and the threat of another lockdown ever present, it remains to be seen how effective this style of advertising will be over the long term.

One thing that could have a major effect: dining rooms shutting down again. McDonald’s has already announced it is halting its reopening plans for another three weeks in the U.S. BK’s contesting campaign is only focused in Finland right now, and wouldn’t actually rely on in-restaurant foot traffic at McDonald’s to work. Nonetheless, it’s another example of the pandemic’s far-reaching effects on the restaurant industry, right down to its advertising tactics.

In the meantime, the Finland campaign is at least an amusing tactic to lift the spirits. It’s also a way for restaurants to promote delivery at a time when many dining rooms are still shuttered and customers are still wary about actually setting foot in a restaurant. 

Impossible Sausage Sandwiches Now Available at Starbucks and Burger King

Starbucks announced today that it has added the Impossible Breakfast Sandwich to its menu. The sandwich, which Starbucks says is now available at “the majority of Starbucks locations across the US,” features Impossible’s plant-based sausage.

This is the second move into breakfast for Impossible in as many weeks. Burger King, which launched the Impossible Croissan’wich earlier this year, announced last week it was going national with the item for a limited time.

Impossible is really starting to flex it plant-based muscles and it expands its heme-pire at just the right time. The COVID-19 pandemic has caused production shortages and raised new ethical concerns about eating meat, and during this time, sales of plant-based meats have taken off.

For its part, Starbucks has more than one plant-based partner on its dance card. While the company is launching an Impossible sandwich in the U.S., it has hooked up with Beyond for a breakfast sandwich in Canada, and Starbucks in China will be using Beyond meats as well.

Getting on the menu at Starbucks will certainly give Impossible’s brand a boost. And if people like Impossible, there are more options than ever for them to eat it at home. Impossible has, err, beefed up its retail pipeline over this year, and launched its own direct to consumer sales site earlier this month. Though the sausage only just debuted at CES this year (which feels like a lifetime ago), the Starbucks and Burger King partnerships show that it has scaled up production fairly quickly.

Now we’ll see if the Impossible breakfast sandwich rises and shines.

Welcome to Burger King. Did You Have a Reservation?

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Things I never thought I’d live to see: a global pandemic shutting down the economy, the McDonald’s snuggie, and fast food restaurants requiring reservations to dine in. But with the restaurant biz on the brink of catastrophic meltdown and businesses slowly reopening under strict social distancing practices, we can expect lots of new versions of the on-premises experience over the next few months — and probably a total redefining of what it means to be a restaurant. 

News landed this week that Burger King is testing an app for dine-in reservations at three stores in Milan, Italy that are expected to fully reopen on June 1. Reuters reports that the app lets customers order food and book a table before ever setting foot in the restaurant, which will operate at less than half its pre-pandemic capacity. During peak hours — 12–2 p.m. and 7–9 p.m. — roughly one-third of those tables will be reserved for customers using the app.

The company says it expects the new booking system to keep its revenue stable in the face of reduced in-house seating. Previously, BK in Italy got about 70 percent of its revenues from dine-in customers. Social distancing won’t allow for that now, and BK said it hopes to make up some of those lost sales with drive-thru.

Reservations are one way to keep crowds at bay in QSRs. Another is to build social distancing features into the actual store layout and operations, as McDonald’s has done in The Netherlands. The mega-chain is trialing a few initiatives at one store in the city of Arnhem, including table service, where burgers are delivered on trolleys, designated waiting spots for the line, and hand sanitizing stations at the store’s entrance. There may also be a host behind a plexiglass-shielded station, directing people where to stand in line.

There’s no word yet on whether this McDonald’s prototype will make its way to the U.S., though I wouldn’t be surprised if some social distancing elements wind up in the chain’s ongoing Experience of the Future store remodels. Burger King, meanwhile, has said if the trial of its app is successful in Italy, it could be used in other countries. 

And while QSRs are busy adopting features we’re most used to seeing at casual dine-in joints, the latter continues to adjust its format to be more to-go friendly. This was already happening B.P. (before pandemic). Now, sit-down restaurants are accelerating the addition of things like drive-thru lanes and self-service kiosks to keep business moving and socially distant at the same time.

All this suggests some seriously blurring lines between the normally siloed types of restaurant experiences. Going to a McDonald’s might suddenly feel like a more formal affair, while family dinner night at The Melting Pot might feel strangely casual without the usual person-to-person formalities. Tech tools that automate the order and pay process, and redistribute the tasks of servers, food runners, and cashiers, will only further change the now-fluid definition of the restaurant. 

We’re only at the start of things when it comes to these new dining out formats. Expect many more iterations of the restaurant to surface in the coming weeks. 

Grubhub Responds to Commission Fee Caps.

Meanwhile, I’d be remiss if I didn’t mention the ongoing smackdown between third-party delivery services and governments mandating caps on the commission fees these tech companies charge restaurants. That was a hot topic this week as more cities joined the list of those either considering caps or already implementing them. 

Grubhub responded this week via its Q1 2020 earnings call. CEO Matt Maloney said these fee caps force the company to increase fees for consumers, lessen marketing spend, and are ultimately resulting in fewer orders for independent restaurants. “Our preliminary data shows that on average, our independent restaurants are seeing over 10% fewer orders since the fee cap and many of these orders have shifted to a large brand or QSR restaurants that were not impacted by the emergency ordinance,” he said.

Note that he said “orders” not “revenues.” There’s no question that being on a platform like Grubhub makes a restaurant more visible to more potential customers. That in turn would hopefully fuel more orders for, say, your local pizzeria instead of Papa John’s.

But with Grubhub et al. taking an up to 30 percent commission of each restaurant transaction, more orders does not translate into significantly more revenues for restaurants. See this gem of a receipt, courtesy of one independent business, as proof of how little restaurants make on third-party platforms. 

On the call, Maloney said one-size-fits-all model “will not work.” And yet one independent restaurant owner who testified at a public hearing last week about NYC fee caps suggested there was virtually no negotiability when it comes to commission fees, suggesting Grubhub runs its own one-size-fits-all model when it comes to food delivery.

The debate around commission fees has been building momentum for some time. The pandemic has effectively stripped any remaining gloss off the facade of third-party food delivery and put its unsavory insides on full display. That the sector will need to make a pivot of its own if it wants to stay relevant seems more and more a question of “when,” not “if.” 

Amazon Returns to Restaurant Delivery. Sort of

But let’s end the week on a less-infuriating note, like Amazon running a makeshift third-party delivery service for restaurants in its corporate buildings. Drivers that used to transport the Seattle tech giant’s corporate employees are now running food from restaurant to customer, according to Eater Seattle.

Deliveries are contactless, meaning the restaurant packages up the order and sets it in the delivery driver’s trunk. Said driver then leaves the food on the customer’s doorstep. 

Once upon a time, Amazon ran a restaurant delivery service, which it shuttered in June of 2019. At the time, Amazon cited competition from the likes of Grubhub, Uber Eats, and other third-party delivery services. The new endeavor doesn’t appear to be a play by the company to get back into that space. Rather, it seems to be a temporary lifeline for local restaurants, not to mention a way to keep drivers who once ran corporate employees around working now that those employees are under stay-at-home orders.

On that note, have a good weekend, and don’t forget to tip your drivers.

Jenn