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Daily news and analysis about the food tech revolution

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3 More Restaurant Biz Predictions for 2021

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

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

An overwhelming number of virtual restaurants will surface.

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

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

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

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

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

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

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

Cell-based meat will come to more restaurants. 

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

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

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

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

Lunchbox Raises $20M to Expand Its Online Ordering System for Restaurants

Lunchbox, an online ordering system for restaurants, announced today it has closed a $20 million Series A funding round led by Coatue. The round also included participation from existing investors 645 Ventures and Primary Ventures, and executives from Venmo, HelloFresh, and Planet Hollywood, according to a press release sent to The Spoon. Including this round, Lunchbox has raised $22.1 million to date.

Lunchbox’s software integrates digital ordering, loyalty programs, delivery dispatch, marketing, analytics, and many other features into a single interface, effectively eliminating the need for restaurants to juggle multiple restaurant tech platforms on the front end. Businesses pay a flat monthly fee to use the platform.

The end goal as Lunchbox sees it is to give restaurants more ownership over their digital properties and operations as the restaurant biz moves deeper into the off-premises realm. That includes the all-important customer data, which up until recently was largely held captive by third-party delivery services. In the wake of the pandemic, more restaurants are taking steps to gain more control of this data along with other aspects of the customer relationship.

With the new funds, Lunchbox plans to scale up nationally to meet that demand, as well as add new capabilities to its platform and build out its team.

And while the company may only be 18 months old, it has reached a number of noteworthy deals and milestones over the last year. In September, it struck a deal with Ordermark to integrate the latter’s online ordering platform into the Lunchbox system. Last month, Lunchbox teamed up with Beam Social to let customers donate to nonprofits via their restaurant orders, and the company has also ventured into autonomous delivery via a partnership with Sodexo and Kiwibot.

All that activity and attention isn’t too surprising. The pandemic and its subsequent leveling of the restaurant biz as we know it has forced businesses to go online by adopting digital ordering and payments technologies, mobile apps, more robust rewards programs, and a whole bunch of other tech tools most restaurants can’t afford to build in-house. Lunchbox’s platform is one option restaurants have when it comes to a third-party system that can help them make sense of the seemingly endless tech options out there.

The common denominator for all these developments is off-premises ordering, which is where many restaurants are headed, if not already there. Since we’re still in the midst of the fallout created by the pandemic, it’s too early to say exactly how much of the restaurant industry will be permanently about delivery and takeout. For now, though, much of it is, which gives restaurant tech companies like Lunchbox a competitive edge.

Augmented Reality Bites

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Virtual food hall, meet the augmented-reality restaurant menu. You’ll soon be best friends.

Hear me out.

Over these last few weeks, multiple news bites around virtual food halls have surfaced. These food halls are collections of restaurants that exist online and where meals are only available for delivery and pickup. They are in many ways a natural effect of the pandemic shutting down dining rooms and the restaurant biz going off-premises.

The latest one comes from Lunchbox. This week, the company integrated its online digital order platform into C3’s virtual restaurant brand ecosystem to bring a bunch of different delivery-only eateries under one virtual umbrella.

Being able to order a plant-based burger, chicken, and maybe a rice dish through a single digital interface sounds great until you zero in on that word digital. One of the potential problems with this new wave of virtual food halls is that customers will never have the chance to actually visit these restaurants in person. Your introduction to their food comes in the form of 2D thumbnails you have to scroll through on your phone and squint at to even get an inkling of what you’re about to order. If you’re familiar with the restaurant that’s less of an issue, but most virtual food halls and brands are new, and ordering from them is something of a culinary gamble.

Enter augmented reality (AR), a technology some say is the next great innovation for restaurant menus. Modern Restaurant Management ran a piece this week exploring the possibility of customers using their own smartphones to display 3D models of the food they are about to order. With AR, instead of a small, flat, 2D image, a user could “see” how the dish looks on their table, zoom in on it and view it from multiple angles to get a much better idea of what they’re about to buy.

I should note that the Modern Restaurant Management Post was authored by Mike Cadoux of augmented reality platform QReal. In other words, Cadoux’s has skin in the AR game.

But he makes a good point when it comes to thinking about AR in the context of the new off-premises reality in which restaurants now operate: “Early adoption of AR was hindered by the problem of getting the experience to the customer. People are loath to download apps, and delivery platforms had to service thousands of restaurants, most of which wouldn’t have access to 3D models. Now a restaurant or brand can push their own content to the customer. They would be wise to utilize all the smartphones capabilities and showcase their food with the next-generation of content.”

Spoon Editor Chris Albrecht actually spoke with Cadoux back in August, when QReal released a study with Oxford University’s Saïd Business School that found participants were more likely to order an item if they could view options in AR. “It’s like a test drive for a car,” Cadoux told The Spoon at the time. “Same way when you buy food, you want to think about what it’s like to eat it.”

The tech makes especially good sense for virtual food halls. As I said, these restaurants do not have dining rooms, so customers are relying solely on the digital realm to learn about the food. If, for the sake of argument, Lunchbox and C3 were to integrate AR into their ordering platform, they could better showcase the “fine dining” aspects of their food and in doing so make their meals more appetizing. Everyone else, from Zuul’s virtual-only sandwich chain to Steve Aoki’s pizza brand, could also reap the benefits of AR in the virtual restaurant realm.

AR is not yet mainstream, and its presence in the restaurant industry is still largely forthcoming. But since one pandemic year seems equal to five normal ones, an AR-powered food hall may be closer than we think.

Uber Engineer Says “No” to Uber’s Prop. 22

Californians, take note. One of the things those in the Golden State will vote on come November is Prop. 22, a $180 million ballot measure that would allow third-party delivery services to classify drivers as independent contractors. The measure would effectively override California’s Assembly Bill 5 (AB 5), which was signed into law last year and dictates that Uber, Grubhub, and other gig-economy companies must classify drivers and couriers as employees. 

Classifying them as independent contractors means delivery drivers would lack access to workers comp., paid sick leave, and other benefits W-2 employees receive. It goes without saying that a lot of folks are against Prop. 22. One of them is an employee at Uber.

Kurt Nelson, who’s been a software engineer at Uber since 2018, penned an op-ed at TechCrunch this week that argues drivers should be classified as employees. Nelson, who still makes deliveries for app-based companies in order to understand the gig economy, writes that Uber “refuses to obey” AB5 and instead prefers to “write a new set of rules for themselves” with Prop. 22. 

Among many other notable lines, there was also this gem about the gig economy: “I’ve met drivers who have to sleep in their cars, risk financial ruin over a single doctor’s appointment or go without life-saving medication. There’s no way around it. Uber’s Prop 22 is a multi-million effort to deny these workers their rights.”

You can read the piece in its entirety here. Uber has yet to make any public response to Nelson’s op-ed, so stay tuned.

Restaurant Tech ‘Round the Web

Kitchen United CEO Jim Collins has stepped down to “focus on personal endeavors,” according to Nation’s Restaurant News. Collins played a major role in turning KU into one of the leaders of the ghost kitchen space. Michael Montagano, KU’s former chief financial officer and treasurer, has been named CEO.

Mobile POS platform GoTab launched an integration with hospitality labor management system 7shifts. The combined offering gives restaurant owners/operators the ability to view sales and labor data from the same interface.

Meal prep software company Meallogix announced a partnership with DoorDash this week. A press release sent to The Spoon notes that the deal gives Meallogix’ customers the option of using the third-party delivery service to manage their routes for the last mile of delivery.

Lunchbox Partners With C3 to Launch a Virtual Food Hall for High-End Meals

Online ordering platform Lunchbox announced today it has teamed up with virtual kitchen company C3 (Creating Culinary Communities) to create a virtual food hall, much of it devoted to higher-end eats from top chefs. C3 will use Lunchbox’s restaurant tech platform to power the food hall, which will unite C3’s brands under a single ordering interface.

C3, which is a partnership between SBE Entertainment Group, shopping mall company Simon, and Accor Hospitality Group, operates a network of ghost kitchens and delivery-only restaurant brands. Virtual brands currently include the delivery-only version of the popular Unami Burger, a plant-based concept in collaboration with Impossible Foods called Plant Nation, and a caviar bar called 12 Chairs, among others. The bulk of C3’s restaurant brands are, in the company’s own words, “higher-end meals that can withstand 30-minute delivery routes.” Hence the caviar bar. C3 said it also plans to launch seven additional brands in the coming months and have 200 digital kitchens in operation by the end of the year.

The partnership with Lunchbox will give C3 the technology chops to bring its many restaurant brands under a single virtual roof. Customers will be able to browse and purchase meals from all C3 brands via the Lunchbox interface. That includes group orders from multiple restaurants. 

Lunchbox’s software bundles together digital order processing, loyalty programs, delivery dispatch, marketing, analytics, and more into a single interface which restaurants pay a flat monthly fee to use. The company raised $2 million in February of this year and has multiple partnerships with other restaurant tech companies, including Ordermark and Toast.

Virtual food halls seem an obvious next step, what with the pandemic shuttering restaurants left and right and businesses basically being forced to work in off-premises formats. Last month, NYC-based Zuul launched its own virtual food hall to accompany its ghost kitchen network, and Texas-based grocery chain H-E-B recently unveiled a hybrid grocery store and food hall available for takeout and delivery.

If it proves popular, C3’s virtual network for higher-end foods could provide some blueprint materials for other full-service restaurants, which have been hit the hardest by industry-wide shutdowns. Much of that will depend on the type of food these high-end restaurants are serving, and if they can alter their menus to accommodate some transit. It’s not ideal for these types of restaurants, which were crated around the dine-in experience, but it’s at least some lifeline in these perpetually uncertain times.

Lunchbox Raises $2M to Simplify Omnichannel Ordering for Smaller Restaurants

Lunchbox, a relatively new entrant to the restaurant-tech scene, just announced a $2 million seed round for its software that simplifies restaurants’ task of managing orders from multiple sales channels. The round was led by Primary, 645 Ventures, Salido founder Shu Chowdhury, and Ananda Gala. This is Lunchbox’s total funding to date.

Restaurants pay a monthly fee for Lunchbox’s software, which bundles order processing, loyalty program capabilities, delivery dispatch, marketing, analytics, and more into a single package. The system is meant to address an issue businesses currently grapple with as more and more technology makes its way into restaurants: how to process and fulfill orders coming in from multiple sales channels. Off-premises dining now makes up more than half of all restaurant orders, which has led to more loyalty programs, mobile apps, self-order kiosks, and other customer-facing technologies. But with those many order channels comes an increasingly fractured tech ecosystem for restaurants. 

In materials sent to The Spoon, Lunchbox points out the limitations of this setup: software systems that don’t talk to one another, extra devices, expensive setup and monthly fees, to name a few. Partnering with a third-party delivery service simplifies some of this, but as is well-documented, small and mid-sized restaurants struggle to pay the hefty fees Grubhub and DoorDash charge for this simplification. 

Those smaller businesses are exactly the restaurants Lunchbox is targeting with its platform. “We’re trying to empower everyone,” Lunchbox co-founder Nabeel Alamgir told me over the phone, adding that more than half of the hundreds of thousands of restaurants in the U.S. are smaller chains and independent restaurants. “My favorite restaurant groups usually [only] have three or four restaurants,” he said. “We’re trying to sign up the clients we want to visit.”  

Currently, the company counts Gregory’s Coffee, David Chang’s Fuku, and Northeastern yogurt chain 16 Handles among its clients. NYC chain Bareburger, which Alamgir was formerly the CMO, is also a client.

To use the Lunchbox platform, restaurants pay between $200 and $600 per restaurant per month. Those restaurants with fewer than 10 locations also pay a $10,000 setup fee. That sounds hefty until you compare it to another system Alamgir cited (name withheld) that costs over $1 million to onboard and $156,000 to use monthly.

And bypassing omni-channel ordering isn’t really an option for restaurants nowadays. Off-premises orders are expected to drive the majority of sales for restaurants over the next decade. At the same time, the ability to personalize these experiences will soon start separating the winners from the losers. Helping restaurants without the deep pockets of large chains juggle these expectations and removing some of the headache from the process is Lunchbox’s main mission right now.

The company will use the new funding to expand and add more restaurant clients over the coming months.

Kickstarter: Is Neoven’s Promise of a Portable Oven with Fridge and Mixer too Good to Be True?

Is there any promise less trustworthy than a Kickstarter promise? Crowdfunding campaigns intentionally paint a pretty picture to attract your dollars, but sadly those promises often go unfulfilled, literally (looking at you Rite Press and iGulu).

With that in mind, I’m casting a bit of the ole’ side eye at the NEOVEN, a product now on Kickstarter that promises to be a portable oven to heat your lunch, as well as a fridge and smoothie mixer and kettle.

The NEOVEN has two main compartments: a larger one for holding a food container and heating it, and a secondary one to hold a smaller container of food, or in which to plug in modules like the mixer, kettle and cooling unit. The heating supposedly only takes five minutes and can be controlled via the NEOVEN mobile app.

This is the second heated lunchbox that we’ve written about in as many weeks. The Heatbox also promises to heat up your meal when you’re ready to eat, but it only promises to heat and uses steam to do so. The NEOVEN says it uses a Heta heating element, and it will make smoothies and coffee.

That all sounds great, and I hope they can pull it off. But I’m always leery of Kickstarter devices that try to be so many things. Developing a prototype is one thing but manufacturing something at scale is quite another, and it’s in that leap where so many crowdfunding campaigns go off the rails.

What is interesting is that most of the people commenting on the Kickstarter campaign page aren’t worried about the device not actually coming to market. Instead they’re concerned that it’s made out of plastic. Plastic waste is definitely an issue for the planet, but if it works NEOVEN seems like it could help people use less plastic by eating out less frequently and creating less food waste.

NEOVEN was looking to raise $20,000 and has already hit more than $77,000 in backing with 19 days left in its campaign. Backers can pledge $199 to order a NEOVEN (without any attachments) that is supposed to ship in July of next year.

Kickstarter: Heatbox is a Stylish, Steam-Heated Lunchbox

Pardon me while I put on my old man hat and shake my fist: Back in my day, we didn’t have fancy lunchboxes! They were made of metal, had one compartment, and they definitely didn’t heat your food up!

Times have changed and so have lunchboxes, as evidenced by the Heatbox, the portable, self-powered, steam-heating lunchbox, which recently launched its Kickstarter crowdfunding campaign.

While it isn’t emblazoned with old school Marvel superheroes, from the pictures, the Heatbox is one good-looking lunchbox. It has a minimalist, European design (which makes sense given that the company is in Amsterdam), complete with a bamboo lid. But all that form appears to have a function.

There’s a removable compartment that you put your food in, complete with lid to prevent leaks. Add 20 ml of water to the device and charge it using a USB-C cable. When you’re ready to eat, remove the inner lid and push the button. Heatbox doesn’t say how hot it will make your food, only that it takes 8 to 12 minutes to warm it up (there are different intensities of heat depending on what you are heating), and that it will heat three times on the low setting on a single charge.

You can order a Heatbox for $132 with an estimated ship date of July 2020. The campaign beat its goal of raising $33,000 in 24 hours and has since gone on to raise nearly $53,000. Though as always, caveat emptor when it comes to crowdfunded hardware projects as they may never materialize.

If you don’t want to wait until next summer, you could go for the LunchEaze, which also launched on Kickstarter and is shipping now. LunchEaze is $150, doesn’t use steam, and is more like a portable slow cooker.

Another reason to like Heatbox is that it could make taking your leftovers to work more attractive. Instead of nuking them, steam them back to life. Enticing you to eat more leftovers means less food waste. And that’s not something I’d shake my fist at.