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The Spoon

Daily news and analysis about the food tech revolution

Fourth

Survey: Despite Low Adoption Today, Automation Is a Key Part of Future Restaurant Operations

Automation could significantly help restaurants deliver high-quality experiences to customers more consistently and easily, according to a new Zenput and Technomic survey of 295 restaurant industry personnel.

That might seem like an obvious statement in this day and age, where digital ordering is on the rise and you can’t turn a corner without running into a self-service kiosk. But as Zenput and Technomic’s “2020 Restaurant Ops Report” suggests, the restaurant industry as a whole remains slow when it comes to adopting technologies that can automate more manual day-to-day tasks for restaurant employees. 

Just 27 percent of restaurant operators said their company is embracing automation “to a great extent.” The number is higher among corporate stores (33 percent) than franchisees (18 percent). Meanwhile, smaller operators (think less than 50 units) are more likely to embrace technology that automates employee tasks than larger ones. The latter point makes sense, given the time, money, and sheer organizational factors needed to introduce new technologies across thousands of restaurant units.

But slow adoption will almost certainly speed up in the near future, however. As the report notes: 

“The reality is that to remain competitive and consistently deliver positive customer experiences, corporate brands and franchisees need to find ways to get more out of every store and field employee they have. This means embracing new strategies, processes, and automation — technologies that will enable staff to focus on higher value activity and do it more efficiently.”

The report doesn’t call out many actual technologies, but it’s a safe bet to say the bulk of restaurant automation in the near future won’t be in the form of burger-flipping robots or widespread delivery via drone, which while promising are expensive and time-consuming to implement on a wide scale. Instead, automation will be software that streamlines day-to-day tasks like inventory management and bookkeeping, which in turn frees up employee time to focus on customer service. As the National Restaurant Association noted in its recent “Restaurant 2030” report, “Everything from inventory management to scheduling to payroll, taxes and bill reconciliation will be more automated in the restaurant of the future.”

Already companies like Fourth and HotSchedules, who merged in July of 2019, as well as Toast, LimeTray, xtra Chef, and many others, offer software platforms that automate “busy work” in the back of house — tasks such as order tracking, inventory management, and bookkeeping. 

And while adoption of automation technologies may be low right now, approval is high among those who are already using them. The Technomic-Zenput survey notes that “83 percent of operators who embraced automation say their experience has been a positive one.” Operators cite more effective store operating procedures, clear visibility across store units, and the ability to quickly identify operational issues as some of the big benefits of software automation. 

One of the predicted trends for restaurants in 2020 is that operators will focus on streamlining their tech stack and employing software more strategically in the coming months. In other words, rather than inundate employees with a pile of new digital tools to learn, restaurants will pick and choose which technologies are most effective at solving the big issues. Tech that can pinpoint and solve more operational issues is likely to be high on the list of many over the next year.


Fourth and HotSchedules Merge to Form All-in-One Restaurant Management Platform

Restaurant tech platforms HotSchedules and Fourth announced today they have merged business operations to create an end-to-end restaurant management SaaS solution. According to a press release sent via email, the deal was backed by Marlin Equity Partners and Insight Partners.

Fourth has long offered a software package for restaurants that collects and analyzes various pieces of data both in and out of the kitchen to help restaurants better manage the back of house, from how much inventory to buy and staffers to keep on the floor to payroll details and invoice processing. All this is done through a web-based dashboard. Talking to The Spoon this past March, Simon Bocca, COO of Fourth, highlighted the importance of data in today’s restaurant: ““That’s where we see ourselves as being most valuable for restaurants. We bring in all the data: transaction, productivity, and put that into a really helpful package so that leadership can understand what’s happening.”

HotSchedules, meanwhile, also offers a centralized web interface that uses data to help restaurants make better decisions around workforce management — that is, training and scheduling employees, keeping in line with compliance rules around labor, and forecasting sales and labor costs.

The new combined offering merges both these companies’ strengths into a single cloud-based solution that works across devices. According to the press release, it will also integrate with most major POS systems, along with third-party apps, and accounting platforms.

As restaurants large and small continue the trek to digitization, and as data becomes a more important aspect of doing business, we’ll see more and more software offerings that aim to simplify the process of collecting, analyzing, and acting on data. Long-established players like Toast and Upserve already own large portions of the U.S. market for this kind of restaurant tech. And newer companies are getting attention, too, like LimeTray, an Indian company who just started operations in the U.S.

The newly combined Fourth-HotSchedules business will be headquartered in Austin, TX and London, UK, with Fourth’s CEO, Ben Hood, as CEO over the new combined entity. The press release also notes that an executive team will be made up of members from both Fourth and HotSchedules. Both companies will continue operations around their own respective platforms.

Fourth Helps Restaurants Find and Deal With the Hidden Costs of Doing Delivery

The third-party food delivery market is projected to hit $24.5 billion by 2022. Along with those rising numbers are growing expectations for restaurants to offer off-premises food options through services like Uber Eats and DoorDash.

Those well-tread statements are easy enough to sit and write. But for restaurants, those statements are, to shamelessly quote Jack Sparrow, “just maddeningly unhelpful” if they don’t also include practical advice on how to set up a delivery program and what to look for in terms of financial, operational, and technical surprises.

As a result, says Simon Bocca, COO of restaurant-tech company Fourth, a lot of details can fall through the cracks if a restaurant business doesn’t know to keep an eye on them. Those include things like ensuring the right number of staff is on hand, having extra storage space for all the delivery/takeout packaging, and figuring out how to keep Uber Eats drivers from clogging up the waiting area of the in-house restaurant.

These are the kinds of things Fourth tackles with its restaurant operations platform. The software uses data collection and analytics to help restaurants predict weather patterns, food inventory needs, or how many staffers to put on the floor. If we translate those capabilities to third-party delivery, the system help restaurants know many takeout boxes the business will need in stock, which items are popular as delivery orders, and which days might be more popular for delivery (e.g., game day). Restaurants can know ahead of time to expect an influx of delivery orders and prep as much as possible beforehand.

The data is available through a dashboard interface restaurants can customize to their individual business needs.

All of this goes back to the importance of planning when it comes to delivery. “Planning is everything,” says Bocca. “We’re very much helping organizations make sure they’ve got enough foods from the right vendors at the right price [and] understanding the sales that are going to be coming through those channels they can fulfill.”

It’s even helped restaurants figure out when they need to use ghost kitchens. Bocca calls these kitchens, which have no dining room and are increasingly being used by restaurants to fulfill delivery orders, “a huge opportunity” for traditional restaurants. “That financial modeling and planning the full system is ideal to help organizations [with ghost kitchens]” he said.

At the end of the day, it’s all about what the data tells you. In some cases, it might strongly suggest opening a ghost kitchen. At other times, it will highlight less positive things, like one client Bocca didn’t name who saw a 21 percent jump in delivery orders and a simultaneous drop in in average ticket spend for in-house diners.

“Being aware of the data and the information that can affect your business,” he says. “That’s where we see ourselves as being most valuable for restaurants. We bring in all the data: transaction, productivity, and put that into a really helpful package so that leadership can understand what’s happening.”

Founded in 1999, Fourth serves restaurants in over 60 countries. Bocca said the company would like to replicate its success in Britain here in the U.S. and is currently doubling down on its efforts Stateside. Currently, Fourth counts TGI Fridays, Dairy Queen, and Le Pain Quotidien among its clients.