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Daily news and analysis about the food tech revolution

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Report: Diners Opting for Restaurant-Specific Apps & Kiosks While Deemphasizing 3rd-Party Delivery

A new report published by Tillster shows that quick-service restaurant customers are increasingly opting to use restaurant-specific apps over 3rd party delivery apps.

The report, which analyzed the results of a survey of over 1,000 quick-service and fast-casual diners, showed that the number of customers who used restaurant-owned ordering channels over the past three months has increased 25% compared to last year, and 17% of those surveyed say they plan to use third-party apps and websites less in the coming year.

One reason diners are opting for restaurant-specific apps or websites is that they see them as lower cost. 44% indicated they preferred a restaurant’s app or website because it was less expensive. Another reason is the benefits of native restaurant app loyalty programs; over four in ten of those surveyed pointed to the restaurant loyalty rewards and benefits available through a native restaurant app/website.

Another reason third-party ordering apps are losing their shine is the decreasing number of choices as these platforms scale back the number of restaurants they support. According to Tillster, 45% of those surveyed in 2023 pointed to a “variety of options” as the top reason for preferring third-party apps, a number that dropped to 36% of respondents this year.

The survey also asked diners what they thought of in-store ordering kiosks. The report says an increasing number of diners prefer to order using kiosks, with 57% preferring this option compared to 36% last year.

Why are diners growing more enamored with kiosk ordering? According to the report, a growing preference for kiosk ordering is because many diners see them as quicker, more convenient, and a better way to see ordering options. 34% say ordering with a kiosk is faster (up 10% over last year), and 33% believe it’s more convenient (a 22% bump over the previous year). The biggest reason (45%) cited by diners for preferring kiosks is they say kiosks show them all the options, up 10% over 2023.

While newer approaches, such as remote cashiers or AI-voice bots taking orders, have gained an outsized amount of attention (and, in some cases, provoked outrage), the reality is that the most significant transition taking place today is the rapid adoption of restaurant-specific ordering apps and in-store ordering kiosks. The diner largely sees these solutions as an added convenience compared to solutions that are more on-the-nose regarding technology displacing in-venue workers.

How Mini Melts Built a $150M Beaded Ice Cream Business With a Nationwide Network of Automated Kiosks

If you’re like me, you’ve probably bought a beaded ice cream at your local ballpark or fairgrounds during the dog days of summer. You know the kind, that ice cream that comes in tiny cryogenically frozen balls that melt as soon as you scoop a spoonful into your mouth.

My experience with beaded ice cream has been primarily with Dippin’ Dots, but today there are also a number of other beaded ice cream brands out there, the biggest non-Dots alternative being Mini-Melts.

After getting its start in Europe in the 90s, Mini Melts landed in the US a couple of decades ago when a one-time Dippin Dots distributor bought the North American rights to the beaded ice cream brand. After successfully withstanding a legal challenge from Dippin’ Dots, Mini Melts ice cream can be found nowadays across the country, sold primarily through automated kiosks that store the ice cream at negative 40 degrees Fahrenheit.

The company grew from a single kiosk in 2005 to over two thousand in the field today, but the journey to wide availability was a winding one. After experimenting with a few different kiosks in the initial years, the company started working with a single third-party vendor to build the machines from 2009 to 2019. After a decade of tinkering and adapting machines, they decided to build their own robotic kiosk starting in 2019.

Recently I caught up with Mini Melts USA CEO Dan Kilcoyn to hear the story of how the company went from a Dippin’ Dots alternative available at a few storefronts to building out a network of over two thousand automated kiosks that collectively serve beaded ice cream to the tune of 30 million servings and an estimated $150 million+ in sales per year.

So how did you first roll out Mini Melts in the US?

So we used to run physical retail locations mainly in shopping malls. In 2004, we started to get out of those retail locations, and we wanted to test the automated kiosk concept. We started with one kiosk. Unfortunately, we didn’t really know what we were doing at the time. So rather than read the manual, we essentially broke the first one, but it was a good learning experience for us, and we kind of built upon that to the kiosk that we have today.

Initially, you used a third-party kiosk?

Yes. We started with a couple of different third-party options that were out there, but some just didn’t work from a temperature perspective. We really needed to make sure that we could have our remote telemetry and we have a probe that downloads our sales information as well. So we tried a couple of options. From 2004 to 2009, it was all very experimental. Then when we were with one supplier from about 2009 to 2019 before they ultimately went out of business.

So in 2019, your third-party supplier goes out of business. Was it at that point you started developing your own kiosk?

You know, while we were taking these different third-party units, we were doing a lot of the work ourselves to make it work for Mini Melts. So prior to 2019, we started to ask, ‘What would this look like if we wanted it to be our own kiosk?’

What were the key considerations?

We wanted to know what was important to the location. Most of our locations are high-traffic tourism locations like zoos, aquariums, and theme parks. And they traditionally focus on face-to-face retail. So when we started initially with the vending machines, there was a pretty steep hill to climb because typically, if someone is at a location, they expect to be served by another human being. As we started to really hit our stride in 2019, we needed to make sure that the kiosk held the right amount of units because, in a given day, we could sell 200 or more cups of Mini Melts.

Was accommodating different forms of payment a consideration?

By 2019, we saw that our consumers really shifted from a cash-based system to credit card payment, Apple Pay and Google Wallet. So we really needed to make sure that the board on our machine was able to accept all that changing payment dynamics.

How did customers pay in the past compared to today?

In 2005, about 5% paid with credit cards. By 2019 it was 50%. Today it’s 60%. in 2019, mobile pay was less than 1%, and today it’s about 5%, growing by 2% every year.

Where is your ice cream made?

So when we started out, we started in the Philadelphia area, originally, and our manufacturing facility is in Connecticut.

And that one facility serves the entire country?

Yes. What we’ve built is we have 23 distribution centers across the US. It’s our own team that’s in 23 cities across the US. It’s our trucks, our technicians, and they’re going in and handling everything from the manufacturing of the product all the way down to the retail of the product.

How do you get the ice cream across the country?

We have negative 40-degree tractor-trailer units that we own, and we pull the tractor-trailers to our depots.

Your new kiosks remind me of a game I’d see at Chuck E. Cheese. How do they compare to the older machines?

The new ones definitely more like the claw-style game that you’re referring to. The only difference is there’s a prize every time you don’t have to worry about the robot missing. The old units are either the traditional kind of a bunker freezer where one would slide up and you would just remove a unit out, or it would work off of like a pulley system.

What is the mix of new vs old machines in the field?

About fifty-fifty.

And have you updated the old machines?

Yes. We went back and retrofitted all of the legacy kiosks in the field to make sure that they were able to take the payment systems and kind of upgrade everything from a technology standpoint.

What are some examples of locations for your kiosks?

We’re at the National Zoo in Washington DC, Philadelphia Zoo, Mystic Aquarium, Georgia Aquarium. Larger family entertainment centers would be Dave and Busters. Round One, Urban Air and Sky Zone Trampoline Parks. We’re at college campuses, a lot of rest stop areas, nontraditional retail locations.

Any one that is trending up at the moment?

Interestingly enough, our rest stop business is starting to kick up more as they add more electric vehicle chargers, because those guests tend to stay longer because they’re charging for longer. We see that there’s more of a need for retail there.

Thank you for your time.

You’re welcome.

You can watch the Mini Melts kiosks below in a video provided by the company.

The Mini Melts Automated Kiosk

Now is the Time to Add Gesture Control to Self-Serve Kiosks

Self-serve kiosks could be one bit of technology used to help restaurants re-open. Switching to kiosks can help eliminate ordering from a worker behind a counter and thereby reducing human-to-human contact.

But the problem with a lot of kiosks is that they still require people to use a touchscreen when it comes to browsing a menu and ordering food. Those touchscreens are, well, touched by a lot of hands throughout the day. This will mean that restaurants will need to not only clean the screens on a regular basis, but make sure those sanitation efforts are on display so customers know the kiosks are clean.

One feature that could help mitigate any concerns over using public kiosks is gesture tech — that is, the ability to wave and swipe your hands in front of a device without actually touching it to activate it.

More than just waving your hand under a faucet to get it to run, gesture controls have been around for a long time. Check out this demo of gesture control via Kinect on the Microsoft Xbox from 2014. It shows how you can scroll and select on-screen objects with your hand while never actually touching the screen. My recollection of using the system back then was that it was pretty clunky, but advancements in computing power, computer vision and even AI have assuredly resolved those issues.

You can start to see some of this contactless tech with PopID, which makes kiosks that let you pay with your face. Obviously, as with any facial recognition, there are privacy concerns. But, rightly or wrongly, those more abstract concerns could get set aside because people who don’t want to physically interact with a public machine and insert their credit card.

Obviously, an easier solution would be to skip the kiosk altogether and just have people use their phone to order. In that way, the only object they touch is their own. That is true, but not everybody has a smartphone. Also, while people may download apps for big companies they frequent like Starbucks or McDonald’s, they won’t download an app for every single restaurant they visit. Plus, mobile apps are expensive to build and not every mom and pop restaurant can afford to make them.

We are just starting to figure out what people want from restaurant interactions. Perhaps they will be fine with ordering from an actual person wearing a mask and all of this is for naught. But if the virus doesn’t go away or rebounds in a meaningful way, we could all be waving hello to gesture controlled kiosks.

NÜTY Rolls Out Smart Chillers That Let Customers Buy Food With WhatsApp and WeChat

Ray Nathan had a problem.

The longtime technology entrepreneur and investor had spent years and a significant amount of his own capital to create a line of fresh, direct-to-consumer Indian food under the brand NÜTY, only to find traditional Indian retailers were not well equipped for the type of cold-chain continuity required for such a premium product.

One solution would be to use a fresh-food vending machine like Farmer’s Fridge or Bite Kiosk but, as it turns out, these automated cashierless food retail machines had yet to make their way to India. So Nathan did what any self-respecting food company founder who had also built his own tech company in a previous life would do: He built his own solution.

Conceived as a sister company to NÜTY Foods, Nathan decided to start NÜTY Technology to make IoT powered smart chillers which would keep his food at the right temperature until purchased by the consumer.

The chillers, which Nathan and his company had on display this month at the IoT Fair in India, give customers the ability to buy in person using NFC or through social apps. In India, that means Whatsapp, which allow consumers to buy food through the chat function.

To buy food from a NÜTY chiller with WhatsApp, the user simply opens the app and starts a conversation with NÜTY, finds a chiller near them and orders by texting the word pay. From there the chatbot sends a pay link. Once they pay, the consumer is free to pick up their food at the designated chiller.

The company is also testing their food chillers in China with WeChat as the conversational commerce platform. WeChat has become an entire commerce ecosystem in and of itself over the past few years with its mini-program platform, which NÜTY’s ordering and payment app is built upon.

The food inventory is tracked using RFID. Each chiller is outfitted with an “RFID set top” and has internal RFID sensors can track up to 30 or 40 products at a time.

Today Nathan’s chillers are in 80 locations, including across office parks, coworking spaces, cafeterias and shared living spaces, and he has plans to roll them out across India and in certain cities in China and, eventually, into the US market.

While mobile payments are taking off in every region, countries that embraced superapps like WeChat and WhatsApp for payment have moved faster than other regions. China in particular has pulled ahead of pretty much everyone else, where some estimates have mobile payments adoption above 80% of transactions.

As we’ve written here for some time on The Spoon, interest in next-generation vending machines and kiosks has been growing in recent years, with self-service fresh food kiosks being as one of the more interesting categories. In the US, players like Byte and Farmer’s Fridge have emerged as an alternative to cafeterias, local deli or the fresh food aisle at your grocery store, but in markets like India options like the NÜTY chiller could help to actually serve as a critical platform to enable the availability of high quality packaged fresh food.

AgFunder Invests in TRAY’s Self-Service-Centric POS System for Restaurants

The folks at AgFunder are better known for their investments in companies that trace food safety, monitor soil health, and perform other agri tech-related tasks. So it was both surprising and intriguing the learn this week that the firm has made its latest investment in the restaurant tech space, with TRAY. Financial specifics of the deal were not disclosed.

TRAY is an Arizona-based company that makes a cloud-based POS system designed around the concept of customers serving themselves in the restaurant, whether that’s through apps, kiosks, websites, or some other channel.

From the AgFunder announcement:

Where most restaurant POS systems were built for back-of-the-house ordering, TRAY’s DNA from the beginning was built for on-demand service for the consumer. TRAY is a complete point of sale system for the enterprise that specializes in self-service ordering and, unlike other legacy POS companies, it was built with self-service at its core, not as an afterthought.

While the company’s technology can serve as an end-to-end solution for restaurants, offering everything from order processing and payments to loyalty programs and kitchen displays, it can also just be integrated with existing POS systems that need to boost their self-service offerings. For example, a restaurant might choose to simply install a few of TRAY’s self-serve kiosks, rather than the entire system. For restaurants without the deep pockets of, say, McDonald’s, the benefit is being able to license different aspects of self-service tech and try them out as demand warrants, rather than invest in an entire self-service system.

TRAY was founded in 2013 as a mobile order and payment app for restaurants that eventually morphed into a full POS system. In addition to the investment from AgFunder, the company also has backing from Greycroft, RiverPark Ventures, Mucker Capital, and Bonfire Ventures.

AgFunder, meanwhile, said in its announcement that it’s been tracking restaurant technologies as far back as 2016 and will be explore opportunities “further downstream the agrifood tech value chain.”

Rebranded Kadabra Deploys Kiosk That’s Basically an Amazon Locker for Food

Sometimes it’s just easier to let people come to you.

That seems to be the thinking as Kadabra (previously Veebie) debuts the second generation prototype of its cubby-filled kiosk. Unlike the company’s first prototype which was a mobile kiosk that could be moved around a city to a different a location every day, the Portland, Maine startup’s latest prototype is stationary.

“Based on the test, we determined that it would be too costly to move hundreds of mobile kiosks around a large city on a daily basis,” Kadabra CEO Steve Sperry told me via email.

Makes sense, particularly for a resource-constrained startup.  Creating a fleet of mobile kiosks – with a plan to eventually make them self-driving – is a much bigger (and more capital intensive) idea than simply creating an network of stationary, automated food cubby systems located in different high-volume locations like fast-casual restaurants or office building lobbies.

This second, more achievable concept is exactly what Kadabra is now focused on, and to commemorate the change the company once named Veebie has also changed its name to Kadabra.

“We changed our name because we felt that Veebie, while unique and memorable, didn’t say anything about our company or our concept,” said Sperry. “Kadabra is meant to suggest that the food ‘magically’ appears in the pod, which from the user’s point of view it kind of does.”

But Sperry and his team didn’t just take the wheels off their kiosks and change the company’s name. They also made some pretty radical changes to the product.

“It’s much more sophisticated than our first prototype,” said Sperry. “It’s a fully functional IoT device that can operate without an attendant and is also refrigerated.”

By taking mobility off the table, Perry’s team was able to focus on making a more capable kiosk system that seems almost akin to an Amazon Locker for food. With the new kiosk system, a consumer can order food from local restaurants and have it delivered to the kiosk and then unlock a cubby with their phone. And because the new system is refrigerated, food can be placed into a cubby (called pods) for a much longer period of time.

It seems the Portland, Maine startup has an affinity for cities named Portland, as the company received a $1 million seed funding round in January of this year from Elevate Capital, a VC based in the other Portland (Oregon).  The company also decided to launch its second prototype in Portland West, as the new Kadabra kiosk resides within a Portland, Oregon location owned by fast casual salad chain Garden Bar.

The company’s business model relies on restaurant partners that can deliver food to the kiosk, but longer term they are considering letting restaurant companies without food delivery capabilities use their kiosks as a way to reach customers.

“We are also exploring using our pods to solve the “last mile” problem in office food delivery,” said Sperry.

You can see a hero reel below narrated by company cofounder/head of hardware Yona Belfort to hear a little about the second generation kiosk design backstory:

Bite Says Face-Recognizing Kiosks Improve Customer Experience

Jack in the Box CEO, Leonard Comma, made news this week when he said “it just made sense” for his fast-food chain to consider switching from human cashiers to machines. To be sure, there are big societal implications if every restaurant made such a shift, but what if automated kiosks provide a better customer experience?

That’s a belief driving the startup Bite, which creates facial recognition kiosks for quick service restaurants (QSRs). Using a combination of iPads, proprietary software and machine learning, Bite’s tablet kiosks can recognize your face to unlock loyalty programs, bring up food preferences and provide opportunities for restaurants to upsell.

“We think facial recognition can offer a better experience than a cashier who doesn’t know your name or your preferences,” said Steve Truong, Co-Founder and Head of Product for Bite. For customers, this means having food history and preferences automatically presented onscreen for faster, more efficient ordering. This efficiency can also translate into more throughput for the restaurant.

Additionally, Bite’s machine learning develops an understanding of a particular customer’s habits over time and can rearrange the restaurant’s menu accordingly. For example, vegetarians will be presented with vegetarian items first, without having to scroll through pages of options they can’t eat.

The use of facial recognition in QSRs is a growing trend. A recent study from Oracle suggests that both consumers and restaurants are on-board with the idea, and restaurants like CaliBurger, UFood Grill and Malibu Poke are all rolling out facial recognition kiosks for faster ordering.

Based in Toronto and New York City, Bite actually started as a digital-menu company. Using tablets, it created media-rich interactive menus for restaurants to replace paper ones. The company soon learned it couldn’t scale that business as fast as it wanted to. Seeing that automated ordering kiosks in restaurants were basically interactive menus, and that facial recognition was becoming more available and accessible, Bite pivoted into this new direction a year ago.

Truong says that Bite’s solution stands apart from others in the market because it’s facial recognition is fast and doesn’t require much of the user. Additionally, the Bite system can easily be customized to plug into whatever point-of-sale payment and printing system a restaurant is already using.

When asked about the privacy and security concerns with using facial recognition, Truong says that those issues are top of mind for the company. Bite takes a “lot of care” when explaining and obtaining the opt-in consent from customers: All data is encrypted, in transit and at rest. Bite also holds the data, so restaurants only have access to broad statistics, not granular bits of information.

Right now, Bite has just three full employees, is bootstrapped and graduated from the Food-X accelerator program last year. Truong says the company has about a dozen kiosks in pilot programs, with bigger clients rolling out this year, but declined to offer specifics.

If the point of a quick-service restaurant is to be, well, quick, then using automated facial-recognition kiosks as cashiers just make sense.

Veebie’s Kiosk Brings Lunch Hour Convenience

When you only have an hour for lunch, you really don’t want to spend most of that in line waiting. Portland, Maine-based Veebie is trying to solve this issue with mobile self-service kiosks that hold pre-ordered food for people to quickly pick up during their break.

Veebie rolled out (pardon the pun) it’s first kiosk in downtown Portland earlier this week. The bright orange containers on wheels have 48 numbered cubbies. Order your food through Veebie on your phone and pick it up from your assigned cubby between 11:30 and 1:30. The menu features items from a different restaurant every day, so today (Thursday), for example, the items available are from B.Good.

Company Co-Founder and CEO Steven Sperry is an entrepreneur-in-residence at Venture Hall, a Maine-based tech accelerator. Sperry told the Press-Herald that while they are starting Portland, Veebie is looking to expand into other markets outside of Maine, and broaden its use of technology, including incorporating self-driving carts.

Looking at the Veebie web site, you can see the company is still very much early stage. Right now, the kiosks do not have an automated locking system (that you could unlock with your phone, say), so there are attendants on duty. It only offers cold food now, nothing hot, and you place an order by visiting veebie.me on a browser on your phone, rather than a dedicated app.

But it’s easy to envision Veebie ramping up quickly and dispensing self-driving carts to convenient locations across cities. Focusing on lunch is a good idea as most people during that hour are interested in efficiency and speed.

The company is not alone, however, in its mission to maximize lunch times. You can use any number of apps to order food online in advance. Earlier this week, Allset raised $5 million to expand its reservation+pre-order and pay service. Office vending machines are getting smarter and holding fresher ingredients. And, of course, robots are coming to take over the world deliver your lunch.