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Daily news and analysis about the food tech revolution

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Q&A: How BentoBox Helps Restaurants Take Back Their Customer Relationships Through Tech

Before the off-premises boom, there was no question of restaurants owning their relationships with customers. One pandemic and a whole lot of digital tools later, and that ownership is a little less certain, and restaurants often give up valuable customer data and feedback to bigger tech companies (e.g., third-party delivery services). Now, however, a number of tech companies are promising to change this by putting more digital interactions with customers back restaurants hands, so to speak.

A company called BentoBox does it by helping restaurants create and manage their own digital storefronts. The BentoBox platform facilitates a number different areas of running a restaurant in the digital age: online order management, website design, dine-in order and pay, digital gift cards, and event management, to name a few. These and other features promise to give restaurants a direct relationship to their customers, even when those interactions are entirely conducted through a website or mobile app.  

Ahead of The Spoon’s upcoming Restaurant Tech Summit on August 17, we caught up with Krystle Mobayeni, CEO and Founder of BentoBox, who will also be speaking at the event. Read our full Q&A with her below, and if you haven’t already, grab a ticket to the virtual show here.

This Q&A has been lightly edited for clarity.

1. What problem does BentoBox solve for restaurants/the restaurant industry?

BentoBox helps translate restaurants’ on-premise experience to their digital storefront in a way that matches their standards of hospitality. We do this through a full-service website, commerce, and marketing platform that helps operators cultivate stronger guest relationships — and drive high-margin revenue through their websites.

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

Before the pandemic, restaurants and technology co-existed. Restaurants focused on their dining rooms and adopted piecemeal technology tools along the way. Restaurants also viewed the guest experience in the brick and mortar as separate from the guest experience online. The pandemic has shown that restaurants need to think about these as one holistic experience and embrace the right technology to connect the on-premise and off-premise experiences. 

With that, the pandemic has rapidly accelerated the shift to a single, modern restaurant experience where restaurants can connect with their guests across all channels. With the support of the right technology, restaurants can build direct relationships and more personal ones to stay resilient and thrive going forward. 

3. What are the most important first steps a restaurant should take when going online?

The most important first step is aligning with the right technology partner. Restaurant operators didn’t get into this industry to be marketers or technologists; they sought to create meaningful experiences with food.

Understanding restaurant operators don’t have the time or expertise to be restaurant website designers, my best advice is to seek out a technology partner who understands what the restaurant needs. While local designers or design agencies can be an effective means to get online, these solutions are often expensive and time-consuming. It is important for restaurants to find a partner that makes their website a reflection of their brand with elevated design, built-in marketing tools and the opportunity to drive revenue the same way they do in their brick and mortar. 

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

As the world has evolved over the last year and a half, restaurants’ core purpose of providing a hospitable and memorable experience has remained constant. However, the technology that has been introduced to help them enter the digital world and make things easier, has in many cases proved far more complex and fragmented than it should be. 

Not surprisingly, this fragmentation and complexity has led to frustration and takes away from the restaurants ability to provide a seamless experience for their diners. It’s crucial for technology providers to be aware of this and work to provide end to end solutions to eliminate these breakage points. 

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

Restaurant technology has the power to help restaurant owners with their business and give diners an enhanced dining experience. When restaurants have the right technology partner, it changes the way diners interact with restaurants. They have more ways to experience a restaurant outside of the brick and mortar location. For restaurant owners, they have the opportunity to focus on better serving their communities and expanding their reach both locally and abroad. It also gives restaurants a more diversified stream of revenue, which helps them become stronger businesses.

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

The pandemic catapulted the digital transformation of the restaurant industry and in five years, I see restaurants having a direct-to-diner experience with their customers, much like the transformation of retail going direct-to-consumers. Through restaurant technology innovation, restaurants will have the tools and data to build strong brand affinity among diners and tailor their customers’ experiences to make every diner feel like a regular. 

Join the Spoon for a Virtual Restaurant Tech Summit This August

For many, 2020 will go down in history as the year the restaurant biz changed forever. It could also be remembered as the year restaurants absorbed about 10 years’ worth of technological evolution in the span of a few months.

But while last year was all about adopting restaurant tech to survive, the next few years will be all about using tech to create a better restaurant experience. I don’t just mean faster service and the ability to pay for meals with your own phone. The most valuable restaurant tech in the future should also create safer dining and working environments, help us reduce food and packaging waste, promote healthier eating habits, and create better new and more fulfilling jobs.

The bottom line is in order to survive, restaurants need to understand how technology will change their business. To that end, The Spoon is announcing our latest event, The Restaurant Tech Summit. The Restaurant Tech Summit will bring together the most important players from across the restaurant industry, from large QSRs and independent establishments to ghost kitchen providers and companies creating the next generation tech stack for restaurants. Together, these companies and individuals will discuss not only how they survived the chaos of 2020 but also what they are doing to thrive — and help others do the same — as they move forward into a digital-first era for restaurants.

The Restaurant Tech Summit will feature founders from building new platforms, to those leading the digital innovation efforts for the largest chains in the country, to chefs and operators using these tools everyday, we’ll have leaders from every side of the restaurant business come together to discuss how technology will transform business and operational models over the next decade.

We already have some great speakers from companies like Wow Bao, Perfect Company, Slice, and we’ll be keeping you updated over the next several weeks as more speakers are added and the full agenda is released.

If you’d like to participate as a sponsor at The Spoon’s Restaurant Tech Summit, drop us a line.

If you’d like to buy a ticket to the Summit, early bird pricing is available through July 15th.

In the meantime, reserve your ticket today.

 

Report: Over Half of U.S. Consumers Are Comfortable Dining in Restaurants

More than half of U.S. consumers (60 percent), are comfortable with the idea of dining out at a restaurant, according to new data from tech intelligence firm Morning Consult. The new data is part of a Morning Consult series on when consumers “will return to normal activities” put on hold by the Covid-19 pandemic. 

Restaurants, of course, have weathered some of the biggest disruptions to “normal activities” of any business type over the last year. That includes full shutdowns of indoor dining (and outdoor dining, in some cases) and a lowered confidence from consumers that restaurants are safe places to eat. Morning Consult notes that in 2020, the number of consumers who said they felt safe dining out never rose past 42 percent.

The latest report’s finding that that number has jumped to 60 percent suggests more consumer confidence in the restaurant dining room. Meanwhile, 15 percent of those surveyed said they “think they’ll feel comfortable within two to three months” and 73 percent said they will be comfortable dining out in six months. 

For now, there is still at least some reservation. Comfort with dining outdoors (e.g., patio) is still much higher than comfort with indoor dining — 69 percent versus 57 percent, respectively. 

Eating in restaurants took the number seven spot on Morning Consult’s list of activities consumers are eager to try once the pandemic is under control and the economy reopened. Going on vacation, resuming a “normal routine,” and going to the movies were among the activities that clocked in ahead of restaurants. 

However, of these top seven activities, eating in restaurants has the largest share of people already partaking. Twenty-four percent of respondents already dine in restaurants, compared to 10 percent going on vacation or 6 percent going to the movies. Morning Consult notes that excitement around restaurants in particular spans generations. 

Worth thinking about for the future is how much tech will play a role in providing higher comfort levels at restaurants. For example, will QR code-based ordering/payment technology, which lessens the amount of server-to-customer interaction, actually make people feel safer? Or will technology’s job be more about making operations more efficient and accurate? For at least a while, it will do a little of both. As more consumers grow comfortable with eating out, it’s main role will likely be around efficiency of the business, rather than simply making people feel more at ease in the dining room.

Pizza: an Opportunity for Restaurant Tech Innovation

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Recently, a restaurant technology company called Slice announced a $40 million fundraise, suggesting there’s a huge opportunity when it comes to making software specifically geared towards the independent pizzeria. 

Slice’s platform, developed by founders with a long history in the pizza space, includes online ordering capabilities, a pizza rewards program, a POS system, the option to build a branded website, and the option to offer delivery, among other things. From the consumer-facing view, Slice is a marketplace of local pizzerias (e.g., not Papa John’s) from which to order and build up reward points that eventually result in free food. Slice is currently up and running in businesses across all 50 U.S. states and serves over 15,000 shops. The potential market it could serve — that is, independent pizzerias — numbers in the tens of thousands at this point in the U.S.

Why, you ask, would an independent pizzeria need a pizza-specific platform to do business?

It’s all in that word “independent.”

As Slice’s Chief Product Officer, Preethy Vaidyanatha, explained to me recently, if you want to run a pizza business (or any restaurant, really), you basically have two options: open a Domino’s (or Pizza Hut, or Papa John’s) franchise or start your own business. The latter choice allows for more culinary creativity and freedom, but comes with the added stressors of running a type of business that’s low-margin even when there’s not a pandemic shutting down restaurants left and right. 

On top of that — and this is what Slice’s technology really aims to address — technology’s march on the restaurant business is unavoidable at this point for pretty much everyone. Digital ordering is a must for businesses large and small now. And after a year of shutdowns and ever-changing restrictions on restaurants, costs have to be reeled in, and digitizing the back of house (bookkeeping, inventory management, etc.) is one way to do that.

Add to this some elements very specific to pizzerias. The menu may be simple (pizza), but it has to accommodate requests like half-and-half toppings, extra cheese, and crust types. Some businesses sell both whole pies and individual slices. Digitally speaking, these choices need to be available with just a couple clicks on a phone or computer. Meanwhile, many pizzerias still handle their own delivery, which as to be accounted for when it comes to managing operations. 

Slice handles the technical logistics of all of those situations, and there is arguably plenty of room for other restaurant tech companies to also develop tools for these things.

If you’re Domino’s, you can just throw money at the problem and open an innovation center to tackle these issues. I can promise you that your average family-owned pizza shop does not have its own innovation center. Nonetheless, it and any other independent pizzeria needs the ability to also offer the kinds of digital conveniences consumers get from the big companies, and that’s where restaurant tech companies like Slice could prove hugely valuable. 

For its part, Slice’s tech offers independent shops the same digitization, process automation, and online ordering/payment tools you would get with Domino’s or a third-party delivery service, but at a far lower cost. The company did not divulge actual numbers, but did mention that restaurants pay a flat fee per transaction to use the platform, rather than the percentage-per-transaction model used by DoorDash et al.

Pizza has always been in its own class when it comes to delivery, from the food itself to the way it handles off-premises formats like delivery. Getting its own tech stack made for pizzerias by pizzerias seems like the natural next step in the segments evolution.

 

Starbucks has teamed up with Arizona State University to open a research and innovation facility that will test initiatives that support more sustainability in Starbucks stores. The facility is called the ASU-Starbucks Center for the Future of the People and the Planet, and will open at the end of 2021. 

Toast has made updates to its Order & Pay tool, including pre-authorization that lets customers start a tab, authorize a credit card, and enable group ordering, all from their own mobile device.

Atlanta-based pay-at-the-table startup sunday recently launched its QR code solution, following a $24 million fundraise. The Atlanta, Georgia-based company wants, like many others, to make it easier for guests to get and pay their bill in the restaurant.

Slice Raises $40M to Digitize the Independent Pizzeria

Slice, a restaurant-tech platform for independent pizzerias, announced today it has raised $40 million in Series D funding. The round was led by Cross Creek with participation from existing investors including 01 Advisors, GGV Capital, KKR, and Primary Ventures. It brings Slice’s total funding to date to $165 million.

The Slice platform is a suite of tools, including online ordering, a rewards program, delivery facilitation, and a POS system, made specifically with independent pizzerias in mind. The company’s Chief Product Officer, Preethy Vaidyanathan, explained during an interview with The Spoon last week that the idea is to provide small and/or independent pizza shops and chains with the same digital advantages of a major chain like Domino’s.

Whereas most online ordering software is built to serve any type of restaurant business, Slice’s is, according to Vaidyanathan, geared towards the “specialized needs that a pizzeria has.” Menus are one simple example, since pizza shops have to accommodate for things like different crust styles, and half-and-half toppings. Via a Domino’s or Pizza Hut app, making these choices is a straightforward process that takes just a couple clicks. Slice is trying to provide the same ease of ordering for independent pizzerias.

Restaurants pay a fixed cost per order to use the Slice technology, as opposed to the percentage-per-transaction model used by most third-party delivery services.

On the consumer-facing side, Slice functions as an online marketplace for pizzerias and is available for both iOS and Android. Vaidyanathan said the marketplace is available across all 50 U.S. states and that there are “well over 15,0000 shops” in the Slice network currently.

The funding news comes on the heels of Slice’s new Rewards program, which is kind of like a Starbucks app for pizzerias. Users get points for every $15 spent at a participating shop. Once they have enough points, they receive a free pie. Meanwhile, the rewards program incentivizes consumers to support local businesses, many of which are still struggling from the last year’s shutdowns and restrictions.

Along those lines, Slice said in today’s press release that it will use the new funds to expand its product line as well as invest more in its Slice Accelerate program, which invests $15,000 into select pizzerias to help them digitize their businesses.

PAR Acquires Guest Loyalty Platform Punchh for $500M

Restaurant tech provider PAR Technology Corporation announced today it has acquired guest engagement platform Punchh for $500 million in cash and shares. The deal adds loyalty and guest engagement software to PAR’s existing arsenal of restaurant tech tools, which currently includes a wide range of hardware and software products for restaurants.

Punchh has for a long time promised to “take the guesswork out of marketing” for restaurants by helping them align their sales channels and marketing campaigns with what their customers actually want. It does this by collecting data on customers and using it to dictate the types of campaigns and promotions sent out. A high-level example of this would be sending deals on plant-based meals to vegans and never sending that group offers for burgers. Punchh, however, can get considerably more granular than this. 

To date, the company has raised $68.1 million. Its platform serves over 200 brands, including Pizza Hut, Denny’s, and El Pollo Loco.

PAR’s CEO and President Savneet Singh noted in today’s press release that integrating the Punchh platform into PAR’s existing offerings will allow restaurants to access more technology via a single system, rather than “juggling disjointed vendors,” as is fairly common nowadays. 

However, this idea of gluing together siloed technologies to run a restaurant will get increasingly harder as digital orders increase and customers demand more personalization. It follows, then, that we’ll see more deals like the PAR-Punchh one in the future as companies attempt to turn themselves into “one-stop-shop” systems for the restaurant industry. Other companies, including Square and Toast, are also building out unified restaurant management systems that are made up of hardware and software controlled from one centralized point. 

The Next Big Tech for the Virtual Food Hall

Here’s a concept that seems stupidly simple but is actually a technologically complex feat: letting customers order from multiple virtual restaurants with a single digital transaction.

As ghost kitchens multiply, the idea of housing multiple restaurant concepts under one roof grows ever-more commonplace, be it Kitchen United’s Mix platform, Crave Collective’s virtual food hall or individual restaurants cooking up more than one menu in their kitchens.

Until recently, customers wanting to order from such facilities had to do so through third-party delivery services like Uber Eats and DoorDash, making a separate transaction for each brand they ordered from, despite those brands being physically housed under the same roof. While that’s not the biggest problem the world has ever faced, it does add the so-called friction to the customer ordering experience. And these days, the restaurant biz is all about getting rid of friction.

It follows, then, that some are working to change this siloed ordering process for customers. In the first place, more ghost kitchen/virtual food hall organizations have their own digital ordering properties. Kitchen United has its Mix platform where customers can order from several different brands via the KU website. Crave Collective has 16 different brands available via single app. Restaurant tech company Lunchbox is powering C3’s virtual food halls, making all choices accessible from a single interface.

In addition to letting customers ditch the third-party delivery services and order directly from the ghost kitchen or virtual food hall, these digital properties (and others) also let customers mix and match meals from multiple different restaurant brands.

Speaking to me for a Spoon Plus report recently, Kitchen United’s Chief Business Office Atul Sood called this idea “multi-concept ordering,” and suggested many more virtual operations will soon offer it.

The idea is simple: Take a bunch of different virtual restaurants housed in a single ghost kitchen and make them all available via a single interface (e.g., an app or website). Consumers can mix and match orders from different businesses, pay for them with a single transaction, and get all the food delivered at once.

The execution of this idea is less simple. As Sool explained, “bundling” different concepts is a technologically complex feat and therefore an expensive and time-consuming endeavor for businesses to attempt.

Imagine a family where one person wants a burger, another wants Chinese food, and another prefers pizza. They want to order all their items at once and have them arrive via the same delivery driver at the same time.   

To do that, there are a few different considerations. First of all, the concepts have to be under one roof — hence the rise of ghost kitchens and virtual food halls a la Kitchen United Mix. Additionally, the fire times need to be coordinated across those different concepts. A poke bowl and a rack of ribs don’t take the same amount of time to prepare, and coordinating those pieces is “a technological challenge,” according to Sood. 

KU Mix has solved for these and other challenges by building out its own in-house technology system. The company has even launched a version of it outside the walls of its own facilities. At Westfield Malls, it is installed to enable a more digital and off-premises-friendly food court experience, for example. “It doesn’t make sense for a restaurant to develop this type of technology [themselves],” said Sood. “It just makes sense for for them to license it from from somebody else.”

Kitchen United Mix is one example of this technology at work. It also seems to be an obvious opportunity for restaurant tech companies in general, since there aren’t many platforms yet specializing in this type of functionality. I doubt the playing field stays empty for long, though. Demand for digital ordering is only going to increase, and even outside of the virtual food hall, there are plenty of relevant contexts for this multi-concept ordering: sport venues. airport food courts, the aforementioned mall. Those areas of life may not be back in full swing quite yet, but when they return, they’ll include many more digital processes, including how we get our food items. 

The Brooklyn Dumpling Shop, a kind of automat for the 21st Century, has inked a franchise deal to bring eight new units of its concept to the state of New Jersey. The first location will open this summer in Hoboken.

Pizza Hut has added drive-thru lanes to more than 1,500 of its U.S. restaurants. Dubbed “The Hut Lane” option, it’s available for orders placed through the chain’s website and mobile app, and over the phone in select locations.

Speaking of pizza, restaurant tech company Slice recently launched a POS system exclusively for pizzerias. According to a company press release, this “will put the same tech tools and data insights that Domino’s franchisees receive directly into the hands of independent pizzeria owners.”

Ghost Kitchens! Fee Caps! Igloos! Tracking the Restaurant Biz’s Changes Over the Last 12 Months

For the majority of restaurants around the U.S., last week marked the one-year anniversary since stay-at-home mandates initially forced dining rooms to close down. What’s followed has been 12 months of great uncertainty, loss, and struggle. But it’s also been a time of astounding resilience and creativity, with restaurants and restaurant tech companies alike have pivoted and shape-shifted to survive the times. 

We’ve been checking in with individuals from both spheres to see where these businesses are now and what’s most useful in terms of tools and tactics as dining rooms slowly reopen and the world goes back to some version of “normal.” 

But to better appreciate how far we’ve come and how much work has gone into this industry’s survival over the last year, I’d like to pause and take a brief look back in time at some of the major stories from these last 12 months.  

March 2020

  • States across the U.S. mandate dining room shutdowns. Restaurants large and small scramble to make the overnight shift to delivery and takeout formats.
  • Restaurant tech companies start offering software and services free of charge to restaurants. Third-party delivery services like Uber Eats and Postmates waive some fees — though not without some controversies.
  • Restaurants like Canter’s Deli, Wahoo’s Fish Tacos, and Torchy’s Tacos discuss strategies for going off-premises. Some include paring down menus, prioritizing takeout meals, and going DIY when it comes to the drive-thru.

April 2020

May 2020

June 2020

  • Some restaurant chains, including Panda Express, start to launch their own in-house delivery services.
  • Restaurants get really creative with their ideas on how to safely reopen dining rooms.
  • This Latin American startup teaches us how to run a restaurant from a mobile phone. (Hint: everyone will do this in the future.)

July

August

September

October

  • The in-house delivery versus third-party delivery debate further heats up, with many encouraging restaurants to take back control of their digital orders.
  • Crave Collective and others put a fine-dining spin on the ghost kitchen and virtual restaurant concepts.

November

  • California passes Proposition 22, which lets third-party delivery services classify their couriers and drivers as independent contractors and keeps these companies from having to pay workers comp, health insurance, and other benefits.
  • Investment in back-of-house technology grows as both restaurants and restaurant tech investors realize the foreseeable future of the industry is in the kitchen, not the dining room.

January 2021

Feburary

March

Obviously this brief timeline isn’t comprehensive, since there’s no way to really capture the true scope of the last 12 months in a single newsletter. It is meant to be a snapshot only of the change and turns the industry took over the last year.

Which is where you, readers, come in. Whether you’re part of an eating establishment, tech company, or an avid foodie, we would love to hear your restaurant experiences over the last year. Drop us a line at tips@thespoon.tech.

Restaurant Tech ‘Round the Web

Nation’s Restaurant News has a new gallery showcasing stories “from the front lines” of the restaurant industry — that is, the restaurants themselves. NRN has compiled first-hand accounts of owners, managers, brand executives and others about their experiences from the last year.

Restaurant Dive has an ongoing analysis of the state of restaurants one year later across a number of U.S. cities. Available so far are in-depth looks at Los Angeles, New York City, and Seattle. More to come.

Grubstreet looks at lessons the New York City restaurant scene has learned over the last 12 months, and what comes next.

Video: Alex Canter on the Evolution of Restaurant Tech Before, During, and After the Pandemic

Among the things in the restaurant industry COVID-19 changed forever, businesses’ relationship to technology is a big one.

Historically, many restaurants have been slow to adopt much, if any, technology for their day-to-day operations. That worked so long as the bulk meals served were going out to dining rooms. When the pandemic shut those down, businesses were suddenly scrambling to accommodate the sudden demand for takeout and delivery formats as well as the industry-wide shift towards digital ordering. 

Of restaurant tech’s evolution over the last year, Ordermark cofounder and CEO Alex Canter says, “10 years of progress maybe happened in a couple of months, not out desire, but really out of necessity.” 

I recently got the opportunity to chat with Canter over Zoom. A longtime restaurant industry veteran (his family owns Los Angeles’ famous Canter’s Deli), he’s no stranger to the concept of either running a restaurant or improving its operations and margins through technology. Ordermark, meanwhile, was helping restaurants manage their delivery orders long before Covid-19 hit, and NextBite, the newest entrant to the family, assists businesses with launching virtual restaurant concepts.

All of which is to say, if you want a glimpse into the concepts and technologies that will matter moving forward for restaurants, Cater’s brain is a good one to pick. Below you can watch our full conversation, and also read along with the transcript.

The Spoon Interview: Alex Canter of Ordermark from The Spoon on Vimeo.

Jenn Marston
Hi, everybody, I’m Jenn Marston with The Spoon. I’m here today with Alex Cantor from Ordermark and NextBite, and we’re going to talk some restaurant tech today.

About the middle of March in 2020, restaurants had to close because of state regulations and health and safety concerns. Over the last year, we’ve seen the most incredible shift towards new technologies towards new dining formats. Alex and I are going to have a conversation about that evolution and specifically, what’s the technology driving these changes? What can we really expect to be around for the long term? So, Alex, thanks for joining me today. And before we get into all that, why don’t you give us a little bit of what happened and what it’s like now for you and your companies.

Alex Canter:
Yeah, well, first of all, thank you for having me. I’m happy to share my thoughts here. And I think everything is moving so quickly that, you know, it just feels like we’re in this the fastest changing market we’ve been in as a restaurant industry. And I want to start by just saying this has been a devastating year for restaurants. There’s no denying how challenging this has been for restaurants, from mom and pops to large chains and everything in between. We’ve already seen over 120,000 restaurants go out of business in the last 12 months, which is a crazy large number.

There are a lot of predictions around what was coming over the next 10 years in terms of technology and advancements shifted digital ordering. And COVID really accelerated a lot of that shift forward. I think, you know, 10 years of progress maybe happened in a couple of months, not out desire, but really out of necessity. And it was because restaurants had to really scramble to figure out, How am I going to keep up? How am I going to have to change my business to accommodate this new reality where dining rooms are shut down, and cities are going into lockdown. There are a lot of restaurants that were set up well for [that]. Think the Wingstop world that already had so much of their digital tech stack figured out and already had a very solid plan in motion and team members dedicated to the digital experience.

But for the majority of the industry and particularly most of the mom and pops, it feels like it was an all-out scramble to try to very quickly get creative, figure out new ways to reach customers rethink menus, rethink technology in general. And that has been a very fascinating thing to watch happen in such a short amount of time because there’s so much to learn for a lot of these restaurants that were newer to this experience.

We started Ordermark four years ago to help provide technology solutions to restaurants to be able to adapt to this new digital off-premise diamond world that we live in. And Ordermark has worked with thousands of restaurants to aggregate all of their incoming online orders, giving restaurants the single device in their kitchen to power orders from Doordash and Postmates and all the channels that they’re utilizing.

But since Day One, Ordermark has always been in the business of helping restaurants drive incremental orders into their underutilized kitchen. And we at the end of 2019 we started developing and bringing to market a newer product offering that we launched called NextBite, which is our portfolio of delivery-only turnkey brains, virtual restaurant brands. So we’ve basically created [the platform] from scratch based on you know data of what’s performing well in which markets and what time of day. We’ve really built these menus that are designed for an off-premise experience and we’ve been working with restaurants to to basically train them on how to become a facility partner for for additional menus and drive an extra 10, 20, 30 orders a day. [Many of] these kitchens are underutilized. They have extra capacity [and] fixed costs already running. Like, the rent is fixed, the lights are already on, the staff is already in the kitchen of these hundreds of thousands of restaurants across the U.S. Why not do more out of one kitchen by launching three to five additional virtual restaurant brands.

That was really the premise for NextBite. We built it with a with a in a pre-COVID world with full dining rooms in mind. And the operational complexity of running the restaurant is already very challenging that we knew when we were building these concepts and these menus, we didn’t want to build anything that was going to come in and disrupt the restaurants existing operation. But rather, you know, be incremental and additional in a way that that’s lighter for the restaurant to adopt.

In a post-COVID world, there’s been a massive adoption of restaurants who need these additional orders more than ever. And as a company, we’ve been able to make a very big impact for these restaurants when we come in and layer on top of their existing business a couple extra $100,000 a year in annualized gross sales. So we you know, we’ve been really focused as a company on what can we be doing right now to help make sure that our restaurant customers and partners that we’re working with can make it through and come out even stronger. And you know, we have gotten love letters, restaurants saying these orders really [make the difference of] keeping the doors open or not. And I think that’s really been motivating for our team specifically. And it’s helped bring a lot of business into our company and attract a lot of investor attention, which is why we at the end of last year, we ended up raising a Series C led by SoftBank, which was $120 million financing to do what we’re doing on a much bigger scale. I’m trying to really advance more restaurants forward into this new digital era.

So it’s been a roller coaster of a year, we’re incredibly grateful that as a business, we ended up on the right side of all of this, to be in a position to really help these restaurants. Because I know that there, there are a lot of restaurant technology companies that, you know, unfortunately ended up on the wrong side of this as well. And a lot of what was happening from you know, in-store applications like reservations and catering businesses that that just became irrelevant overnight in such a short amount of time with no notice. It’s really hard when things are moving so fast. But we did see a lot of new technologies emerge such as the QR code making a massive comeback in the restaurant industry. Just just a lot of experimentation with curbside and restaurants turning their menus into grocery shops, which are like restaurants that offer groceries and obviously the old versions of virtual restaurants. It’s been a really crazy last 12 months. So there’s so much to talk about. I have a lot of ideas for where things are headed as well. But but that’s that’s basically an overview of what what we’ve seen happen over the last 12 months.

Jenn Marston: I’ll echo that it’s been really devastating for a lot of restaurants out there. To me, one of the really attractive things about what you all are doing with NextBite is it, it seems like you’re in some way showing restaurants that there can be digital options, there can be strategies for doing delivery, and takeout and virtual restaurants without them having to go off and invest a bunch of upfront capital or sign, you know, really long leases with traditional commissary kitchens. But this seems like a, for lack of a better word, a more frictionless way for your average restaurant to be able to introduce another revenue stream without having to really overhaul what they’re already doing.

Alex Canter: I think you’re thinking about it correctly. When I think about what’s happening right now I see these vacant dining rooms that are that are way too large. You think about fine dining restaurants, full service restaurants. I felt this way even pre-COVID, but I felt like the restaurant market in general was already very oversaturated and very difficult to even be successful. First place because there are so many options. And as more and more people enjoy the convenience of delivery, the need for those large seating capacity diminishes over time. And the need for larger kitchen spaces actually is even more in demand than ever.

In order to produce food for both in-store and takeout, you need to have the means to have more kitchen space to have more staff to be able to produce work in the back of the house from the front of the house. And so I think over time, we’re going to see dining rooms getting smaller with a bigger emphasis on the size of the kitchen, which I think we’re starting to see a little bit with these new ghost kitchen facilities and commissary kitchens that are designed specifically for an off-premise and delivery and takeout experience.

But the desire to dine out at restaurants will never go away. People will always want to enjoy restaurants and hospitality, in the experience of celebrating a birthday going on a date, going out to eat with friends, that’s something that will never go away. But it’s tough for restaurants to even hit three to 5 percent margins on an annual basis. And that’s why a lot of restaurants fail in their first or second year. Even in a pre-COVID world, there was there were too many options. And now, you know, I’m hoping that this, this is somewhat of a market correction that’s happening, we’re coming out of this, the restaurants that do survive and make it out will be stronger. And, you know, it’s hard to know how long that’s going to take. But there’s still a very exciting restaurant market ahead of us that, you know, is gonna just be a little bit more advanced for from a tech perspective, from a digital family perspective. We saw a lot of restaurants, resisting off-premise and delivery for a long time. And now, you know, it’s their lifeline. It’s where more than 50 percent of their orders are happening. And even as they open up their dining rooms and make shift back a little bit, [off-premises] will be a strong part of the off the experience. I don’t see there being many restaurants who don’t have some sort of off-premises experience coming out of this.

Jenn Marston: Yeah, I would I would agree with that. Let’s talk for a minute about those big dining rooms that are currently sitting empty, because we were seeing some, there is some trickling back to the dining rooms, I mean, different states have different relax different regulations. At the same time, obviously, vaccines are slowly but surely getting distributed. So at some point in the near(ish) future, the option to go out and eat at a restaurant is going to be less less scary for folks, basically. But where do you see? And you could you kind of already alluded to this, but you don’t see this need for delivery, and takeout and curbside, and all these other formats going away.

Alex Canter: You know, I think I think the ordering demographic has really shifted over the last year. It used to be a lot of 18- to 34-year olds who were using these apps and placing orders on Doordash. That has really expanded to all generations, from teenagers to you know, my grandparents [use] Doordash because they can’t go out and don’t feel safe going to restaurants anymore. But now that they’ve gotten used to this platform, they have the Dashpass they have their address saved on file, their favorite order restaurants are order history. This is a convenience that’s not going away anytime soon.

That larger demographic is naturally going to mean that a larger percentage of orders volumes can happen [off-premises]. Also with business travel changing. You know, many offices have committed to hiring remotely and not going back to centralized workplaces. And therefore I think, you know, opportunities with catering are going to permanently shift. And I foresee more of the happening through delivery and takeout. Restaurants have to adjust and get used to that. There were so many restaurants that were that were largely dependent on big catering orders. I think the event spaces will return your weddings, large parties, stuff like that will start to open back up again, but probably not the same levels that we’ve seen in the past.

Depending on what type of business you are, you’re probably coming out of this a little bit different. You have to rethink the consumer experience. And you see companies like Sweetgreen implementing drive-thru [and] examples of restaurants understanding that their customer base wants to interact with them differently than maybe before. And that that’s where it’s really hard to adjust and make those changes, I think, you know, many, many SMB operators and mom-and-pop restaurants don’t have digital teams. People have marketing teams, traditionally, sometimes maybe the owners do need some of the marketing themselves. But there’s so much technology that’s available now. And it’s up to the restaurants to figure out, to experiment and figure out what works and what doesn’t work in a very quick way. And we’ve seen some really, really impressive restaurants, you know, very quickly understand that they can’t just sit around and wait for things to get better and change. But they have to go out and make the really hard adjustments. So their business models to their staffing to their to their tech stack to really embrace what’s happening rather than sitting idly by hoping that things are gonna get better.

Jenn Marston: I know you and your family obviously are in the restaurant industry. I don’t think we’ve mentioned that yet. But, and I know Canter’s was already pretty savvy before the pandemic, you all were doing the ghost kitchens and the off-premise and things like that. But just from your own personal experience and your family’s experience, you know, what is Cantor has had to kind of deal with in terms of this adjustment you’re talking about?

Alex Canter: Yeah, so Canter’s is one of the largest and oldest restaurants in Los Angeles. And we had a very devastating start to this whole COVID experience where we had to lay off almost 90 full-time employees, from from waiters, the busboys, dishwashers, some that have been working in the restaurant for 30, 40, 50 years. It was, you know, incredibly challenging to make that that common decision and we as a, as a restaurant, we knew that this was not going to be a sustainable operation in a delivery-only format. Until, you know, until we start to get more creative. Luckily, funding definitely helped, we probably would not be open today without it. But that’s kind of a short-lived solution.

We ended up having to rethink many reasons pricing rethink the the entire physical experience when you walk in, to cater to an off-premise-only demographic and, and you know, we luckily were able to make those pivots and changes very quickly. LA did allow outdoor dining, but we decided not to invest in converting our space to accommodate that because it was quite an investment for so much uncertainty of like, how long is this gonna last? And luckily, we didn’t because shortly after outdoor dining became that thing, they actually pulled it back again. And it’s it’s been an emotional roller coaster for all these restaurants trying to figure out how to make this work.

Especially in the beginning, there was so little notice [around when] these changes were going to go into effect. From an inventory standpoint, we prepared for full dine in service and then we’d get a notification tonight at midnight [about closing].

Luckily, you know, Canter’s is a very big name that has a big following in LA. And so we’ve done very well on a delivery only capacity. But it’s because we’re getting a couple 100 orders a day through these third party marketplaces. Not every restaurant has that kind of volume to be able to generate enough through these platforms to sustain a delivery-only operation. And I think, the sooner that more of these cities will open up person, even if it’s just for outdoor dining, 25 percent capacity, the more likely restaurants will come out of this. But I think there’s also something to be said for, you know, the staff and feeling safe. And I’m glad that I think as of today, people who work in the food industry, at least in LA County, can now get the vaccine, which I’m sure is happening more and more cities. And I’m, I’m hopeful that that will happen. That rollout will happen faster than anticipated. Because, you know, if if these restaurant employees were showing up every day and putting themselves at risk, aren’t feeling safe at work, it’s a very hard situation to navigate for an owner to try to, you know, keep the doors open. Restaurant staff is like family, and you don’t want to put anyone at risk or expose anyone to any dangerous situation. So even even in the beginning, when we wanted to stay open for delivery and takeout, there was some hesitation.

It’s been a journey to get to this point. But for my family’s restaurant, I think we’ll come out stronger again, just like we have for the last nine years, we’ve survived wars and recessions. It’s all because of this mentality of like, we have to adapt or die, we’ll have to make changes, embrace change, embrace new technology. And, you know, I think that’s been the key to our success over the years.

Jenn Marston: I think that’s a great point. What would you say to restaurants out there in terms of what are some of the most important things that they can do for themselves right now, to continue adapting, or if they haven’t done that much to get the ball rolling?

Alex Canter: First and foremost, if you have extra capacity in your kitchen, you should absolutely be experimenting with creating virtual brands, licensing other people’s virtual brands, but really trying to maximize the output of your kitchen. That’s a very low-hanging fruit in my opinion, which we’re seeing a lot of the chains starting to embrace now. We’ve seen announcements from everyone from Chili’s to Bloomin’ Brands to Applebee’s. Denny’s have experimented with luxury, several different menus, several different concepts running out of their kitchens, and those incremental orders are so critical right now. And you know, whether you try to do a virtual restaurant brand yourself or you partner with a company like NextBite or any others in the space, I think that is that is such an obvious way to to drive more orders into your restaurant every single day. So if you’re not doing that, or you’re hesitant for any reason, I highly suggest you try it and just see what happens. You know that there is a big learning curve to understanding how to get it right. And how to, you know, create the right menu and price it and promote it and optimize the placement within the platforms. It’s not as simple as just lighting up a menu on these platforms. But you know, start that process of understanding what works and what doesn’t work, because there’s a lot of opportunity just sitting there. And if you’re not, if you’re only running one, your own restaurant, every kitchen, I think you’re probably you probably have a lot more need for growth, unless you’re in and out of alignment your door every moment of every hour of every day. I think virtual restaurants can benefit everyone who doesn’t have that situation.

Jenn Marston: Any any thing else in terms of I know, we’ve talked in the past about? Also, it’s not a matter of just taking your existing menu and plunking it online, right? It’s, you know, maybe thinking about scaling it back or thinking about which foods might be best suited to this, these kind of newer formats and things like that.

Alex Canter: Yeah, well, you know, one, one strategy that I think every restaurant should be focusing on is shifting as much of your order volume from off-premise from third-party delivery to your own website or your own app. It’s easier said than done, for sure. But at a baseline, you should have an ordering button link on your website, whether it’s powered by ChowNow or Lunchbox or any of these companies that that allow restaurants to take orders directly. It is, you know, every order that’s happening on those platforms, you don’t have to give up as much of a percentage is it’s better. But the reality of the situation is that a disproportionate amount of the volume will still happen on third-party marketplaces. But there are a lot of companies focusing on restaurants creating their own digital strategy to get people to convert through their own service platform. So that’s something that everyone should be looking into as well.

Jenn Marston: I wanted to end just by asking a question, you put it really well, at the beginning of this conversation, we you talked about the just the sheer pace of acceleration and how we’ve, you know, in, what did you say we basically did 10 years in two months, in terms of just adoption and these changes. So as we move away from these widespread lockdowns and dining room closures and things like that, do you see this pace of tech adoption and delivery and takeout adoption slowing down significantly in the near future? Do you think we’ll kind of continue quickly for some time?

Alex Canter: Well, from pace perspective, I don’t think the percentages will remain the same. Look at the third-party marketplaces, all the ordering channels, they grew their businesses in some situations three to 5x last year. I don’t think any of those companies will experience the same kind of growth in 2021, just because so many restaurants were scrambling to implement delivery last year. But I see all of these these companies continuing their growth, just not the same pieces as maybe what happened last year.

You think back maybe 15 years ago, most restaurants didn’t even have a point of sale system. There was like maybe a credit card terminal and a cash register. And, you know, the, the evolution of this space has historically been slow. But now, it’s not a choice anymore. It’s something you have to really embrace and take on and and experiment with. And luckily, there are hundreds of great restaurant-tech companies out there that are helping businesses in different ways. And I think it’s really important right now to be experimenting with, with as much as we can handle from a bandwidth perspective. Because there’s a lot [of technology], as a restaurant owner, I probably was pitched by over 500 different restaurant tech companies trying to bring in new services. And some some of those technologies were game changing for us way back in the early days of Groupon or Yelp, or even a third party marketplaces themselves, these were companies that really carried a lot of volume for us. And, you know, without them, I don’t know if we would have made it this far. So it’s really, really hard to navigate this space, because there’s so much happening. It’s like drinking from a firehose and when you think about your tech stack and your strategy, especially as it’s moving so quickly, but I definitely am encouraging as many restaurants to embrace that experimentation.

Jenn Marston: Excellent. Well, thank you for chatting with me, Alex. And for those of you watching and listening, hope this has been helpful and we’ll be running quite a few of these videos and pieces over the next couple of weeks on the spoon. So thanks again, Alex. And Take care everybody.

Raydiant Teams Up With Toast to Make Menu Management Easier for Restaurants

Digital signage platform Raydiant announced today it has joined Toast’s Partner network and will now integrate with the latter’s digital menu app. The main goal of the partnership is to provide restaurants with an easier, faster way to keep menus updated across every single channel through which orders arrive.

Nowadays, restaurants juggle an increasing number of order channels compared to even one year ago — delivery (third-party and in-house), curbside, pickup, and drive-thru, to name a few. The task of updating the menu across all these different digital properties is an obvious candidate for automation, considering the time it would take to manually change each individual menu (not to mention, the risk of human error).

Raydiant’s SaaS tool syncs a restaurant’s menu with Toast’s POS system so that any changes — pricing, promos, 86’d items — will automatically change across all a restaurant’s different digital channels. For restaurants with multiple units, the changes apply across all locations.

Via the same interface, restaurants can also create QR codes for ordering and payments in the restaurant or at the drive-thru.

This automated, all-in-one approach to menu management became something of a “must-have” last year thanks to the ever-changing dining room restrictions related to the pandemic and the addition of new sales channels. When front-of-house-focused restaurant tech companies started releasing their so-called “contactless” tech bundles for the dining room, automated menu management started to become more commonplace. Sevenrooms, Paytronix, and several other companies in Toast’s partner network also offer similar functionality. In other words, there is a lot of competition in this particular area right now.   

Raydiant raised a $13 million Series A round in January of this year. The company said it more than tripled its revenue in 2020, and increased its customer base by 60 percent.

The Big-Box Ghost Kitchen Is Here

A couple weeks ago, college was the latest potential growth market for ghost kitchens. Today, it’s big-box retailers like Walmart.

Recently an Ontario, Canada-based company called Ghost Kitchens launched its first-ever location inside a Walmart store in the city of St. Catherine’s. It’s not the first-ever ghost kitchen concept from the company, but it is Ghost Kitchens’ first time to operate from within the four walls of a major retailer. And it further blurs the lines between the restaurant, the grocery store, and the convenience mart. 

Ghost Kitchens’ facilities carry a variety of items, all of which are relatively easy to prep and transport to customers. Those include CPG goods like Ben&Jerry’s ice creams, meals from QSRs like Salad Works, and shopping mall standards like Cinnabon. Customers can order these items through certain third-party delivery platforms or pick them up inside at the Walmart in which the facility is located. Additionally, customers can bundle different items from different brands into a single ticket.

And speaking of bundling, the Ghost Kitchens-Walmart deal is another example of a trend brought on by the pandemic but likely to stick around for the long haul: giving customers the option to digitally order multiple different food formats from a single place.

The idea got popular by necessity in 2020, after the pandemic forced restaurants to close dining rooms and businesses resorted to selling their food inventory as groceries to customers as a means of making extra money. 

Since that time, ghost kitchens have become a kind of norm in the restaurant biz, digital ordering has increased (and will continue to), food producers everywhere have launched direct-to-consumer e-commerce stores, online grocery shopping has grown, and convenience stores have inked deals with delivery companies. All of those factors have converged to underscore a single point: consumers ideally want to find the majority of their food items, whether it’s a burrito or a bunch of kale, in a single place, literally and digitally speaking.

Ghost Kitchens’ Walmart concept is a bit like a real-life illustration of the above factors coming together, but it’s not the only company helping to blur the lines between the restaurant, the convenience store, and the grocery market. ClusterTruck, a virtual-only restaurant company, operates ghost kitchens inside Kroger stores. H-E-B has a food hall for delivery meals. DoorDash has its own “ghost convenience stores” that are basically like 7-Eleven without the storefront.

Sticking a ghost kitchen inside a Walmart makes sense because Walmart does big grocery business, in addition to selling every other physical object imaginable. It seems like only a matter of time before retailers like Target, Sam’s Club, and others follow suite. 

To be clear, this won’t be the territory of high-end, or even sort of high-end meals crafted by chefs. Rather, it’s another example of the ghost kitchen’s ever-evolving role, which will eventually serve much more than the restaurant biz.

Restaurant Tech ‘Round the Web

There are drive-thru lanes, and then there are bike-thru lanes. Dunkin’ unveiled its first-ever version of the latter in Quezon City, Philippines, and has reportedly gotten rave reviews for it. The QSR says it will expand the concept to other Dunkin’ locations in the Philippines.

Yum Brands, parent company of KFC, Taco Bell, and Pizza Hut, acquired AI firm Kvantum for an undisclosed sum. Yum said in a statement the acquisition will allow it to improve its marketing campaigns and data analytics around consumer behaviors.

Many restaurant operators don’t expect to return to “normal business conditions” any time soon, according to new survey data from the National Restaurant Association. Thirty-two percent of operators think it will be 7-12 months, and 29 percent say it will be more than a year. Ten percent say business conditions “will never return to normal for their restaurant.”

McDonald’s May Sell Part of Tech Company Dynamic Yield

McDonald’s is considering selling part of AI startup Dynamic Yield, which it acquired in 2019, according to a report from the Wall Street Journal. 

The original intention behind the $300 million Dynamic Yield acquisition was to install the company’s AI tech into self-service kiosks and drive-thru menu boards at McDonald’s locations. With the implementation, menus would become more technologically sophisticated, able to offer things like more personalized recommendations for customers. McDonald’s currently has Dynamic Yield implementations in the U.S., Canada, and Australia.

But as WSJ reports, after analyzing the Dynamic Yield platform, McDonald’s has found that the tech “hasn’t delivered the promised sales boost” originally hoped for at the time of the deal. The QSR mega-chain aimed for Dynamic Yield order suggestions to boost drive-thru sales by 1 percent in the U.S. Sources told WSJ that sales have fallen short of that target, and one franchisee said that “the return on investment is just not there.”

The Dynamic Yield platform is just one piece of technology McDonald’s franchisees have called into question recently. Despite the chain’s aggressive push towards digital ordering and all the accompanying technological changes, franchisees have pushed back on how much they must pay for all this tech. Ernst & Young is currently conducting an audit of these technology fees, while franchisees have paused all non-essential communication with McDonald’s corporate.

Still, missed sales targets and franchisee tensions don’t spell the end of Dynamic Yield’s platform as part of Mickey D’s operations. McDonald’s said it would keep parts of the company, including those that service the chain’s drive-thrus and kiosks. While details are few and far between, McDonald’s shift towards stores with more drive-thru lanes and less dining room space suggest Dynamic Yield’s tech will continue to provide at least some value going forward. 

McDonald’s is currently “exploring” the sale of a portion of Dynamic Yield. There is no set timeframe for a deal, and it is entirely possible that no deal at all will happen.