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Daily news and analysis about the food tech revolution

Crave Collective

Voice bots and Back Office Tasks: A Mid-year Look at Restaurant Tech

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As we’re fond of saying lately, last year’s pandemic-induced chaos accelerated the restaurant industry’s adoption of technology so much that about a decade’s worth of changes happened in the span of a couple months. Investor, restaurant tech guru, and friend of The Spoon Brita Rosenheim highlighted that point recently when she released her 2021 Restaurant Tech Ecosystem Map. 

The map, while not exhaustive, includes a staggering number of companies across many areas of the restaurant business, from ordering and delivery tech to back-office tools, business intelligence, corporate catering and ghost kitchens. Even a casual glance shows just how enormous (or bloated, depending on your point of view) the restaurant tech sector has gotten over the last 18 months. 

Brita has her own takeaways and predictions bundled with her map, and you should definitely read through them if you are interested in learning more about restaurant tech’s near-term trajectory. Here, I’ll add a few of my own thoughts to the mix, including:

Rise of the voice bot. This is one category that’s slowly but steadily grown a presence in the restaurant industry over the last few years. But excepting maybe Domino’s chatbot, widespread voice-tech implementations at restaurants are still rare, though that will likely change in the next couple of years. McDonald’s threw heat on this topic last month by announcing it is currently testing automated ordering via voice tech at 10 locations, and that it expects this technology to be in all of its locations within the next five years. Meanwhile, the current labor shortage has left restaurants scrambling to make their operations more efficient. If correctly executed, going fully autonomous with the order process could shave seconds off every individual customers’ order. And those seconds (and costs) add up fast. 

The analytics opportunity. Marketing analytics for restaurants are another “it” category at the moment, if its slice of the restaurant tech pie above is any indication. In the words of Adam Brotman, CEO of Brightloom, online ordering tech has become “a commodity,” and that the next big frontier for restaurant tech is around analytics. When Brotman and I spoke a few months back, he explained that data — about customer preferences, transactions, order histories, etc. — is a huge opportunity for restaurants if they can figure out how to harness it. Seeing as that’s no small feat technically, a huge number of analytics and CRM companies have cropped up offering solutions to smaller businesses that can’t build these programs in-house. Expect more companies and much consolidation in this category.

Back-office bonanza. The sizable slice back-office tech gets in Brita’s market map reflects a trend we’ve written about before: that investment and interest in back-office tasks will continue to attract attention in the coming months. The back office was probably once the most “un-sexy” area of restaurant tech, since most of it has to do with digitizing invoices and schedules and helping businesses run payroll. One pandemic later, restaurants are trying to save on costs in as many areas as possible, and a surprisingly effective way to do that is through digitizing, centralizing, and streamlining some of these previously boring tasks. Like analytics, this category will see a wave of consolidation in the future, and in fact that is already happening.

As always, I welcome your thoughts on my thoughts, now and in the coming months as restaurant tech continues to evolve.

More Headlines

Local Kitchens Raises $25M for Its Virtual Food Hall Network – The ghost kitchen/virtual food hall, started by three ex-Doordash employees, has raised Series A funding roughly one year after launching.

Mobility Service Helbiz Opens Its First Ghost Kitchen – Italian-American mobility company Helbiz announced today it is launching its own ghost kitchen/food delivery/virtual restaurant business called Helbiz Kitchens.

Miso and Lancer Worldwide Aim to Automate Beverage Dispensing for QSRs – Miso announced a partnership with Lancer Worldwide, a global manufacturer of beverage dispensers, to develop an automated, intelligent system designed to speed up and organize drink orders.

Local Kitchens Raises $25M for Its Virtual Food Hall Network

Virtual food hall Local Kitchens has raised $25 million in Series A funding roughly one year after launching. The round was led by General Catalyst with participation from existing investors Human Capital and Pear VC. New investors Fifth Wall and Penny Jar Capital also participated. Local Kitchens says this round brings its total funding to $28 million. 

The San Francisco Bay Area-based company was founded by three ex-DoorDash employees in the summer of 2020. There are currently four Local Kitchens locations, all of which are in California: Cupertino, Menlo Park, San Jose, and Lafayette. 

These facilities function as combination ghost kitchen/virtual food halls. Orders from all participating restaurant concepts are cooked under one roof, while customers can order via the Local Kitchens website or onsite at a self-service kiosk. 

One notable feature of Local Kitchens is its ability to offer customers mix-and-match functionality when ordering digitally. In other words, customers can order from multiple different restaurant concepts and bundle them into a single transaction, rather than having to create a separate transaction for each restaurant. Kitchen United uses a similar approach for its ghost kitchens, as does Crave Collective, C3, and the newly opened Helbiz Kitchens.

“Bundling” virtual restaurant concepts together is one of those technological functions that looks simple on the surface but is rather a complicated execution on the back end. Speaking recently with The Spoon, Kitchen United’s Atul Sood explained that this idea is time consuming and expensive from a development perspective, and suggested that we may see more third-party restaurant tech in the future that helps ghost kitchen facilities integrate this feature. 

For Local Kitchens right now, customers can only order meals for pickup, though the company says delivery is “coming soon.” It is yet unclear who will delivery the food: a third-party service like DoorDash or an in-house operation. Up to now, the default delivery method has been third-party services. Lately, though, more ghost kitchen facilities have started using their own fleets, and Local Kitchens currently has an open position for Delivery Driver on its jobs website. 

The company says the new funding will allow it to build out more locations in California and eventually expand beyond its home state. 

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. 

3 More Restaurant Biz Predictions for 2021

Even in the best of times (not a pandemic) making industry-wide predictions is kind of a guessing game. After all, anything can happen, a point underscored by the restaurant industry’s COVID-19-induced meltdown followed by a seismic shift to off-premises formats. 

One thing we do know with certainty as we head into the new year is that those off-premises formats — delivery, takeout, drive-thru — are here to stay. So with that in mind, here are a few mini-predictions for 2021 that suggest how restaurants might further adapt to these new formats.

An overwhelming number of virtual restaurants will surface.

Some good news is that practically anyone can start a virtual restaurant brand. Some bad news is that everyone from established restaurants to celebrities to random internet stars is doing just that, quickly saturating the market in the process.

This is likely to increase, especially in the first half of 2021. However, there is a huge difference between launching a chicken wings brand and maintaining a successful, even profitable, concept for the long term. Over the next 12 months, we will learn more about what it takes to achieve the latter. In the process, many, many virtual brands will come and go.

There will be more off-premises options for high-end restaurants.

Full-service, high-end restaurants were hit hardest by the pandemic in 2020, since those experiences have historically relied on the full dining room experience to reach customers. 

But towards the end of 2020, we got a glimpse of how these restaurants might both survive and prosper in a restaurant industry that’s irrevocably shifted to meal formats like delivery and takeout. Lunchbox and C3 launched a virtual food hall for fine dining, and Crave Collective showed us what an entire ghost kitchen operation for such restaurants would look like. 

Rather than try to replicate existing fine-dining experiences in a to-go box, concepts like those of Lunchbox and Crave work with the chefs to imagine new ones that maintain a higher-end feel while being simpler and more travel friendly.

Expect more virtual food halls and ghost kitchens dedicated to higher-end dining to emerge in 2021, and more restaurants to take a chance with these formats. 

Cell-based meat will come to more restaurants. 

At the end of 2020, Singapore-based 1880 became the world’s first restaurant to sell cultured meat via a partnership with Eat Just. The combination restaurant/club/social enterprise threw a launch party for Eat Just’s GOOD Meat cultured chicken and will carry it on the menu in some capacity moving forward.

Restaurants are a logical stop for cell-based meat companies on the road from lab prototype to mainstream staple because they have historically always played a role in consumers’ eating behaviors and patterns. 

Just Eat isn’t the only cell-based meat company currently in restaurants. In Tel Aviv, Israel, Supermeat has its own test kitchen-turned restaurant called The Chicken that invites consumers to dine on cell-based meat in exchange for feedback.

More restaurants around the world will play host similar developments in 2021. 

Crave Raises $7.3M to Expand Its Virtual Restaurant/Ghost Kitchen Concept

Crave Hospitality Group, which runs the Crave Collective ghost kitchen/virtual restaurant facility in Boise, Idaho, announced today it has raised $7.3 million in seed funding. The round was led by VC firm StageDotO with participation from Capital Eleven and undisclosed individual investors.

Crave said in a press release sent to The Spoon that it plans to use the funding to “build pre-opening teams” for its next four Crave Collective locations, which will open in 2021. 

The company is a relatively new player to the ghost kitchen and virtual restaurant space, having opened its Boise, Idaho facility in November of this year. That facility houses 16 restaurant concepts, many of them focused on recreating upscale dining for the virtual restaurant era in which we now find ourselves.

Like other operations in this space, Crave and its restaurant teams process orders digitally, prepare them in designated kitchen spaces for each restaurant, and put them in the hands of delivery drivers to go out to customers. Unlike other operations, Crave employs its own W-2 staff to do the driving, calls those people “mobile servers,” and treats them more like restaurant servers than gig workers. The company also built its own proprietary tech stack to manage the orders, and as we saw when Crave gave us a virtual tour of its Boise facility last week, the location also includes a pickup area for customers that don’t want to pay the extra cost of having food delivered. 

All those factors make Crave stand out among competitors in the increasingly saturated ghost kitchen and virtual restaurant markets. Clearly investors think so too, hence this seed funding round.

Crave has an additional 10 more facilities planned for 2022. Among the cities the company will expand to are Salt Lake City and Provo, Utah, Mesa and Chandler, Arizona, the Dallas-Fort Worth area, and Denver, Colorado. Crave said in today’s press release that “nearly all” of its current restaurant partners will grow along with the company as it opens more locations.