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Daily news and analysis about the food tech revolution

Dragontail Systems

A Few Thoughts on Yum’s Dragontail Deal

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Greetings from Eastern Kentucky, where I’m taking a quick breather from the restaurant world and am off to tour AppHarvest’s high-tech greenhouse.  

But first, a few quick thoughts on the recent Yum! Brands acquisition of Dragontail Systems, which was announced at the end of last week. In case it wasn’t clear already, Yum — parent company of Taco Bell, KFC, Pizza Hut, and The Habit Burger Grill — has big ambitions when it comes to its technology plans. The Dragontail deal suggests that a big chunk of that ambition is to enable better delivery at its restaurants. 

Australia-based Dragontail Systems is known around the restaurant biz for its AI-based workflow management system for kitchens. The system can process a restaurant’s incoming orders, manage each food item’s cook time so that it’s ready when the delivery driver arrives (not before or after), assist with managing and scheduling drivers, and provide real-time updates. In the past, restaurants have also used Dragontail’s AI-based camera to assess food quality and ensure safety and cleanliness standards in the kitchen. 

Dragontail is Yum’s third major technology acquisition so far in 2021. Earlier in the year, Yum acquired AI firm Kvantum to assist with its marketing campaign analytics, and Tictuk, which makes omnichannel ordering software that lets consumers place orders via social media, SMS, email, and other formats.

The Dragontail Acquisition, is hyper-focused on improving delivery operations, and pizza delivery in particular. Yum said it already has Dragontail installed in roughly 1,500 Pizza Hut stores across 10 countries. If a wider implementation of the tech is successful, Yum will eventually install the tech further around its Pizza Hut locations, and eventually across all its brands. 

Of course, Dragontail originally debuted its system at a Domino’s location in Australia, so Yum’s bid to buy the company is at least in part a way of competing. I doubt fighting Domino’s is the only motivator, though, as the deal seems aimed at a larger move to make food preparation more efficient at Yum restaurants.

Restaurant kitchens have always operated in a kind of orchestrated chaos, but with many businesses still struggling in the wake of last year’s events, efficiency is everyone’s favorite word right now. On paper, Dragontail’s capabilities sound easy: managing drivers’ arrivals and departures, determining more precise fire times for each food item, assessing the quality of the food more precisely. But as anyone who’s ever worked in a restaurant kitchen knows, getting one detail wrong can set off an entire chain of mishaps that lead to lower-quality food, unhappy customers and, in the end, lost money. With the Dragontail acquisition, Yum is placing its bets on tech to help the company avoid that scenario. 

Plant Power Fast Food Chain Raises $7.5M Series A – The San Diego, California-based all-vegan chain trying to redefine the concept of “fast” food said it will use its new funding to continue its expansion plans and focus on new corporate unit development.

7Shifts Raises $21.5M for Its Workforce Management Platform for Restaurants – The company will use its $21.5 million Series B round to add new features that simplify the process of managing, scheduling, and communicating with restaurant workers.

Square’s Back-of-House Display System Now Available for Delivery-Only Restaurants – Payments company Square recently made its restaurant software stack a little more versatile when it launched its Square KDS back-of-house display system as a standalone item available via subscription.

Yum! Brands to Acquire Dragontail Systems

Yum! Brands has begun the process of acquiring Dragontail Systems, the two companies announced today. Under the agreement, the Louisville, Kentucky-based Yum! will pay $93.5 million in cash for all the share capital of Dragontail, which is publicly traded on the Australian Securities Exchange. Dragontail Systems had raised $8.8 million in funding.

If successfully completed, the addition of Dragontail will bolster Yum! Brands’ delivery capabilities. Dragontail makes Algo, an AI-based restaurant workflow management system. Algo processes a restaurant’s incoming orders and manages when each item should be cooked in coordination with when a delivery driver will arrive.

In addition to managing kitchen workflow, Dragontail has introduced additional technologies to its stack over the past couple of years that augment and expand a restaurant’s delivery capabilities. Dragontail’s AI-based camera can be installed in kitchens for quality control. In addition to ensuring that pizzas are topped and cooked properly, they also were a means of communicating with the customer: Here’s a picture of your pizza! During the COVID pandemic last year, the camera was also used to check on sanitation conditions in kitchen workstations.

More recently, Dragontail integrated drone delivery into its automated workflow. The company is doing drone pizza delivery with Pizza Hut in Israel, and announced a partnership with Valqari, which makes smart lockers for drone delivery.

According to today’s press announcement, Dragontail’s technology is being used in 1,500 Pizza Hut restaurants in more than 10 countries. Yum! didn’t mention rival Domino’s, which has also used Dragontail’s solution in the past. When we checked in with Dragontail of April last year, it said its technology was being used in more than 2,500 stores (the number of Domino’s stores was not specified).

The acquisition comes at a time when takeout and delivery is more important than ever to the restaurant industry. With dine-in operations for many restaurants shut down last year, people have become accustomed to having food from any type of restaurant delivered to their door. In addition to Pizza Hut, Yum! also operates KFC, Taco Bell and Habit Burger. Both KFC and Taco Bell are placing more of an emphasis on to-go orders at their restaurants. It’s not hard to envision Dragontail’s technology being used not only to help coordinate delivery, but also with a brand’s mobile app to facilitate faster ordering and pickup via drive-thrus.

Yum! Brands acquisition of Dragontail still needs to meet Australian regulatory approval. In its press release, Yum! Brands said that it estimates the acquisition will have “an immaterial impact to its 2021 financial results.”

Dragontail Systems Partners with Valqari to Deploy Dropboxes for Drone Delivery

Restaurant tech company Dragontail Systems announced last Friday that it has partnered with Chicago-based drone logistics company Valqari to use that company’s automated drone delivery stations.

Valqari’s makes the Drone Delivery Station, which is kind of like an automat for drone-delivered food drop-offs. The Station has a series of locked cubbies, on top of which a drone carrying the food either lands or lowers a tethered package. Once dropped off, the Station’s elevator system lowers the food and places it into a secured cubby. A delivery driver (or even a customer) then receives a notification that the food has arrived and they can unlock the designated cubby to carry the order over the last mile to its final destination.

Smart Drone Delivery Mailbox by Valqari

This news comes a little more than a month after Tel Aviv-based Dragontail, which uses AI to track restaurant order management and fulfillment, announced that it had partnered with Pizza Hut in Israel to do drone delivery of pizzas. Dragontail did not specify where Valqari’s systems would be implemented. (UPDATE: Dragontail said that it will be deployed in the U.S.)

Dragontail’s plan is to do a hub-and-spoke model of drone delivery, meaning that instead of flying directly to people’s houses, the drones will fly from a restaurant to a designated drop-off area. This simplified, narrow approach will help minimize regulatory issues that come with flying drones. Because there will be limited flight paths to and from two fixed points, instead of drones flying deep into residential areas, there isn’t as much government approval needed.

Partnering with Valqari also gives Dragontail the means to safely drop off deliveries without needing a human driver to get near the drone. The locker can also keep food secured should a driver be late for food pickup.

While regulatory issues around drone delivery are being clarified (at least here in the U.S.), and a number of players like Flytrex and Deuce Drone are starting to make deliveries domestically, there is still a long way to go before it can become mainstream.

In the meantime, however, it’s easy to see how a halo of logistical services around drones like that of Valqari’s will rise up to make it easier for drone delivery to come to market.

Dragontail Systems and Pizza Hut Deploy Pizza Delivery Drones in Israel

Restaurant tech company Dragontail Systems announced today that it has joined up with Pizza Hut for pizza delivery by drone in Israel.

To make this type of airborne delivery happen, Dragontail is integrating drones into its Algo Dispatching System, which uses AI to manage food preparation and delivery workflow. The delivery drones won’t be dropping pizzas off at people’s front doors, however. Rather, they will fly pizzas to remote designated landing zones where delivery drivers will pick them up for last mile of the delivery.

This remote drop-off hub approach is gaining traction with delivery companies around the world. IFood is using this model in Brazil, and here in the U.S., Uber is taking this approach with its drone delivery program.

There are actually good reasons to use this multi-step approach when delivering by drone. First, it simplifies the regulatory issues around flying commercial delivery drones because it reduces the number of flight paths that need to be created and cleared with appropriate government entities. Second, even if there is a last mile that needs to be driven, a drone still zooms overhead bypassing a lot of ground traffic on its way to customers for a speedy delivery. Finally, a remote hubg can keep delivery drivers closer to the delivery neighborhoods, rather than having them go back and forth to a restaurant.

Regardless of approach, the drone food delivery space is heating up. Walmart is using Flytrex for a groceries-by-drone delivery pilot in North Carolina. Rouses Market is testing deliveries in Alabama. In Ireland, Manna is making deliveries in around Dublin. And Google’s Wing has been making drone deliveries in Australia.

Drone delivery could become a much more viable option for restaurants and other food retailers here in the U.S., as the Federal Aviation Administration released its final safety and nighttime flying rules for commercial drone operators at the end of last year.

Week in Restaurants: A Classic SoCal Diner Goes Off-Premises, Dom’s Still Checking Pizzas

Why are you reading this and not grilling up a delicious Beyond Burger this holiday weekend?

As long as you’re here, let’s take a quick look at the week in restaurants. And what a week it was. With states halting the reopening of dining rooms, it’s clear the effects of the pandemic are far from over in the restaurant industry. Yet business keeps on, and there were a number of noteworthy developments from this week around ghost kitchens, AI pizza checkers, and the greatest diner of all time.

New NORMS

NORMS, a much-loved diner chain in Southern California, this week debuted NORMS Junior, a new store prototype geared towards to-go orders. The company says NORMS Junior will be the model for future NORMS locations — no surprise, given the pandemic’s effect on dining rooms (see above). NRN has some great slides of what this new NORMS will look like.

Next Stop for Wingstop: Ghost Kitchens

Also riding the off-premises wave strong is fast-casual chain Wingstop, who this week opened its first ghost kitchen in its hometown of Dallas, TX. The new facility is less than 400 square feet and is for delivery-only orders. Wingstop says one of its goals is to digitize 100 percent of its transactions. A delivery-only ghost kitchen will aid in that.

Taco Bell Redoes Digital Rewards

Simply dubbed Taco Bell Rewards, the new app-based loyalty program comes five years after the band’s original rewards program. Apparently the idea of a new loyalty app was so popular it sent Taco Bell traffic through the roof and temporarily crashed the site. To access the new rewards program, customers can download the latest version of the Taco Bell app, which includes a beta version of Taco Bell Rewards.

AI Will Continue Checking Your Pizzas

Domino’s and Dragontail Systems said this week they will continue their partnership, which puts Dragontail’s AI tech in Domino’s restaurants to ensure quality. The smart scanner uses advanced machine learning, artificial intelligence, and sensor technology to check the quality of pies before the go out for delivery. (Dragontail’s tech can also be used to ensure proper sanitization in restaurants.) The continuation of the partnership means more of these pizza scanners across more Domino’s locations. So far, the partnership between the two companies has been limited to Domino’s locations Australia. They have not yet said if this extended partnership will bring the technology to stores elsewhere in the world.

Expect More Restaurants to Use AI Cameras Like DragonTail’s to Show a Kitchen’s Cleanliness

Before the COVID-19 pandemic, people mainly worried about where their food came from. Was it organic, locally raised, grain-fed, etc. (It was a simpler time.) But as the virus has spread, the bigger concern for consumers is who has touched their food, and were they wearing gloves and a face mask when they did so.

This is the socially distant, contactless delivery world that we now live in, which actually makes it the perfect time for Dragontail Systems to launch its new AI-powered camera that detects the sanitary conditions of food prep areas as the food is being packaged up for delivery.

You may remember Dragontail when its camera + computer vision system debuted at Domino’s in Australia last year. Dragontail’s camera is mounted above the workstation in Domino’s back of house where pizzas come out of the oven, are sliced up and boxed.

Back then, the Dragontail system was being used to assess quality control: that the pizza was the right shape with the right toppings, and that it was cooked properly. Dragontail’s camera took pictures of the pizza and Domino’s sent those pics to the customer as a way of showing hey, your pizza order was made properly and it’s heading out to you.

Now, in addition to the existing quality control features, Dragontail announced today that its camera system can check for sanitation conditions. The camera detects things like whether gloves and facemasks being worn, or how often a workspace is sanitized. The exact parameters of what to look for are up to the restaurant, as are how violations are communicated to the worker and/or manager.

So now, in addition to a picture of the food cooked properly, restaurants can provide a customer with a checklist of steps taken to show that the food was also handled properly. The end customer, then, can feel a little more comfortable knowing the restaurant followed proper cleanliness procedures.

We actually started seeing similar technology pop up last year in, of all places, China. As we wrote then, AI systems were installed in restaurants in the Shaoxing Province of China to monitor for unsanitary conditions like improper uniforms and mixed use of cutting boards. More recently in India, home cook marketplace FoodCloud launched a Kitchen Cam, which offers customers video footage of the kitchen and cooks as they make and package food.

Dragontail’s camera is currently being used in more than 2,500 stores across Australia, Canada, Singapore, the UK and Belgium. With today’s announcement, the company is ready to expand into the U.S. and work with restaurants of all sizes. The cameras cost between $500 and $1,000 and there is a $50 monthly fee for the computer vision systems.

As we’ve written before, the COVID-19 pandemic is accelerating changes throughout the meal journey. With cameras like Dragontail’s likely becoming more commonplace, the meal journey will now include pictures.