• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Skip to navigation
Close Ad

The Spoon

Daily news and analysis about the food tech revolution

  • Home
  • News
    • Alternative Protein
    • Business of Food
    • Connected Kitchen
    • COVID-19
    • Delivery & Commerce
    • Foodtech
    • Food Waste
    • Future of Drink
    • Future Food
    • Future of Grocery
    • Podcasts
    • Startups
    • Restaurant Tech
    • Robotics, AI & Data
  • Spoon Plus Central
  • Events
  • Newsletter
  • Connect
    • Send us a Tip
    • Spoon Newsletters
    • Slack
    • RSS
    • The Spoon Food Tech Survey Panel
  • Advertise
  • About
    • Staff
  • Become a Member
The Spoon
  • Home
  • News
    • Alternative Protein
    • Business of Food
    • Connected Kitchen
    • Foodtech
    • Food Waste
    • Future Food
    • Future of Grocery
    • Restaurant Tech
    • Robotics, AI & Data
  • Spoon Plus Central
  • Newsletter
  • Events
  • Jobs
  • Slack
  • Advertise
  • About
  • Become a Member

McDonalds

January 24, 2021

Top 3 Tech Trends for QSR Redesigns

This is the web version of our weekly restaurant tech newsletter. Sign up today to get updates on the rapidly changing nature of the food tech industry.

The “next-generation” restaurant format isn’t new, as QSR brands like Dunkin’ and McDonald’s can attest. But the restaurant industry’s sudden and in many ways irrevocable shift to off-premises formats in 2020 certainly increased both the number of restaurants revamping their store formats and the speed at which they are doing so.

Those revamps come in many forms and features: BK’s floating kitchens, Applebee’s adding drive-thru lanes, everyone’s near lack of dining room space, to name a few.

And since everyone from Sonic to Del Taco seems to be announcing some kind of format revamp — physical, virtual, or both — these days, I thought it’d be worthwhile to round the top common denominators up to get a hint at which tactics will likely become widespread across the restaurant biz in the near future.

Herewith, are my top three QSR redesign trends:

More Curbside Pickup Spots

Digital order/payment capabilities are a must-have for restaurants now, and this technology coupled with curbside pickup is something we will see a lot more of in the near future. 

For many restaurants, offering curbside pickup options is cheaper than building out a drive-thru lane and window. Outside of the technology, all a restaurant needs is to dedicate a few parking spots close to the building, some signage, and a staff person to run the orders out. Bigger brands may have the money to retrofit their existing stores with drive-thru, but for many mid-size and smaller restaurants, curbside is a more realistic option when it comes to fulfilling more off-premises orders.

For customers, digitally enhanced curbside pickup is increasingly seen as a cheap, fast alternative to delivery, which is getting more expensive for customers. (More on that in the next section.) 

Curbside tech itself is getting some improvements to make the method faster and more efficient, Panera’s geofenced curbside initiative from 2020 being the obvious example. While efforts like these are the anomaly right now, more chains will adopt them and other curbside tech in the coming months.

Drive-thrus, Cruise-thrus, Chipotlanes

On the other hand, those that can swing the cost of adding a drive-thru should do so. 

Some chains, like Applebee’s, are testing out the drive-thru concept for the first time. Chipotle is another good example of a restaurant chain that never offered the format before and has now shifted its entire strategy to accommodate more “Chipotlanes.” Ditto for Sonic, a restaurant better known for drive-ins than drive-thrus, and Pokeworks forthcoming “cruise-thru.”

Others, like QSRs that have always offered drive-thru, are expanding the format. Literally. Double, and triple drive-thru lanes, with some dedicated solely to mobile orders. are becoming the norm at the KFCs, Dunkin’s, and BKs of the world.

The common denominator of this common denominator is that tech is integrated into most of these drive-thru concepts, whether that’s through accommodating more mobile app orders or uses of artificial intelligence to improve order accuracy and upselling.

Mobile-Only Zones and Dedicated Delivery Areas

As anyone who’s been in a drive-thru line lately knows, restaurants are struggling to fulfill the influx of off-premises orders quickly. Many restaurants are addressing this by dedicating certain drive-thru lanes to mobile orders and for delivery drivers picking up orders. Some, like Dunkin’, have done this for years. Others, like Shake Shack, are new to the concept. Still others, namely Pokeworks, have taken the concept one step further and do not accommodate onsite ordering in the drive-thru lane at all.

Meanwhile, to keep third-party delivery drivers waiting on orders from taking up all the curbside spots, many restaurants are also building dedicated areas for delivery pickups. Del Taco, for example has both dedicated drive-thru lanes and pickup shelves for delivery orders.

None of the redesigns discussed above have been widely deployed yet; we can expect more of that in 2021. At that point, new standards for store designs will start to trickle down from the major brands listed here to mid-sized and smaller ones, further cementing the role of off-premises across the restaurant industry.

Postmates: the Latest Delivery Service to Raise Its Prices Post-Prop 22

After saying prices would remain the same for customers following the successful passing of Proposition 22, Postmates has now raised those same prices as high as $2.50 per order.

Postmates’ about-face follows similar price increases from Uber and DoorDash, according to a report from Eater San Francisco. It’s also a contradictory to the tagline these companies were pitching in the ramp-up to the Nov. 3 election—that Prop. 22 passing would allow them to continue operating in California and that prices for customers would not increase.  

Prop. 22 passed in a 58 to 42 percent vote, which allows gig-economy the aforementioned companies to continue classifying their workers as independent contractors. Translation: Uber et al. do not have to pay worker benefits like healthcare, workers comp, and sick leave.

The delivery companies said that they would offer their own benefits package to workers that include a stipend for healthcare. The recent price hikes appear to be geared towards paying for those benefits. For example, the Postmates website calls it “the California Driver Benefits fee” and says that it “helps us fund the new benefits offered to drivers thanks to the passing of Prop 22.” 

All of this feels pretty inevitable, to be honest. After all, one could hardly expect companies that are now infamous for predatory and dishonest business practices to subsidize workers’ benefits out of their own pockets. It’s just a shame more voters didn’t reach that conclusion before clicking “Yes” on the Prop. 22 measure.

Restaurant Tech ‘Round the Web

Part of the plan President Joe Biden issued this week to combat coronavirus includes providing clear, national guidelines for restaurants on how and when they can operate. Clear national guidelines would be developed around the safety of workers as well as things like restaurant capacity restrictions.

This week, Olo partnered with customer feedback tech platform Tattle in order to improve the process of collecting restaurant guest feedback for off-premises orders. Tattle will integrate with the Olo platform to provide restaurant guests with a digital survey they can take after ordering from a restaurant.

Pathogen control tech company UV Angel has partnered with McDonald’s franchisees in Texas and Illinois to equip locations with proprietary ultraviolet light surface and air technology. UV Angel says its tech targets pathogens at the room level (as opposed to at the building level), which the company say is more effective in fighting airborne and surface-borne bacteria, viruses, and fungi.

December 22, 2020

McSaga 2020: McDonald’s Franchisees Push Back on Tech

Like other major QSRs, McDonald’s has made clear in recent months that technology and digital developments are top of the priority list for the mega-chain moving forward. But not everyone agrees with Corporate’s approach to this plan, and McDonald’s franchisee owners are fighting back. As Restaurant Business notes, the National Owners Association (NOA) has “pushed back” against a temporary tech fee and is now considering forming a technology cooperative that would give them more power when it comes to decisions about digital strategy.

The fee in question, which is part of a series of changes McDonald’s announced at the beginning of December, would charge operators $423/month for technology investments to cover a $70 million “lag” from an old payment structure. Those tech fees would begin in March 2021 and remain until the $70 million is paid back to McDonald’s.

This isn’t the first time McDonald’s and its franchisees have gone toe-to-toe over tech, and news of these new fees reignited some old tensions. It has also prompted the NOA, an independent group of McDonald’s franchisee owners and operators, to explore the idea of forming a technology cooperative that would give them more voice when it comes to decision-making moves about tech.

McDonald’s controls most of the technology in its stores, charging franchisee owners a fee for using that tech. That arrangement might have worked well in an era when “technology” was a cash register and a credit card machine. But thanks to the pandemic, franchisees have, suddenly and irrevocably, found itself in a restaurant industry whose terms are increasingly dictated by tech in order to accommodate the shift to takeout and delivery formats. The moves follow similar ones from a host of other brands, including Sweetgreen, Chipotle, Shake Shack, and many others.

Of all the QSRs out there, McDonald’s has been one of the more aggressive brands to push this technology. In recent months, the chain has expanded new drive-thru technology from its 2019 Dynamic Yield acquisition, introduced more self-order kiosks, and announced a new app, loyalty program, and store formats for 2021. As Restaurant Business notes, “These efforts have resulted in considerably higher costs for franchisees, whose monthly payment to McDonald’s for technology is 10 times what it was a decade ago. “

A technology cooperative would give franchisee operators more direct say in what technology gets developed and how money is spent, according to the NOA. “You should have a vote in how that pot of money gets invested,” the board said. 

As part of a statement provided to Restaurant Business, McDonald’s noted that its process “includes collaboration with a franchisee-led technology team” and that the company is “confident” it has the tools in place to “drive future growth through technology.”

The battle between McDonald’s and its franchisees is, as I mentioned above, an old one. But given the rapid deployment of tech to the QSR industry, it’s also a fight that will get more intense, not less, in the coming months.

It’s worth noting, too, that while the franchisee model is hugely popular — it allows a brand to quickly grow with less capital — it may not be the most beneficial one moving forward. McDonald’s is the largest franchise in the world, with other notable names being KFC and Burger King. But Starbucks, another chain that has grown rapidly in recent years, rarely franchises, and in fact argues that franchising can hurt brand continuity, quality control, and even company culture.

As technology continues its rapid invasion of the restaurant industry, its costs and expectations could strain more chains’ relationships with franchisees, and indeed call the viability of whole model into question at some point in the future.

November 11, 2020

Chipotle Finally Launches Its Own Take on the Ghost Kitchen Concept

QSR brand Chipotle is a known leader in the restaurant industry’s current transition from dining room to off-premises formats, but the company has for the most part been quiet in the conversation around ghost kitchens. Up to now, that is. The company today revealed its Chipotle Digital Kitchen a pickup- and delivery-only restaurant that is essentially its own homegrown take on the ghost kitchen concept.

The new restaurant, located in Highland Falls, New York, will open this coming Saturday (Nov. 14). Chipotle said in today’s press release that the Digital Kitchen is meant to drive business in “non-traditional locations” such as dense urban centers that can’t hold a full-service restaurant.

While the restaurant does feature a small lobby with a few seats, there is no assembly line from which to order food and no cashier to ring orders up. Instead, customers must place orders digitally via the Chipotle app or website, or through a third-party delivery platform. Guests retrieve their orders from the aforementioned lobby that is “designed to include all of the sounds, smells and kitchen views of a traditional Chipotle restaurant.” The location can also fulfill larger catering orders.  

Chipotle’s news comes the same week McDonald’s unveiled plans for its own to-go-centric store format that will consist of a kitchen surrounded by drive-thru lanes and parking spaces for curbside pickup. Since Chipotle’s Digital Kitchen is, initially, at least, focused on urban settings with space limitations, it does not accommodate a drive-thru lane. That said, the company has been very public about its intentions to incorporate that format into its stores, and today’s release notes that the new store format “allows for flexibility with future locations.” Drive-thru may not be part of this first location, but it’s undoubtedly on the way as the company opens more of these new store concepts.

With the future of the dining room still very much unknown, there’s something of a mass exodus from that format happening among well-known quick-service brands. Burger King, Wendy’s, Dunkin’, Popeye’s, and Tim Horton’s are just a few names on the growing list of restaurants changing up their store formats.

Chipotle has been trekking towards this shift for some time. In December of 2019, the company announced a few different store format designs for to-go, drive-thru, and delivery orders. 

Make sure to join The Spoon’s Ghost Kitchen Deep Dive event on December 9th. Register here!

November 10, 2020

Beyond Q3 Earnings: The Company ‘Co-Created’ the McPlant, Will Launch Version 3.0 of Its Burger

Despite disappointing Q3 earnings that saw stocks slide yesterday, plant-based protein heavyweight Beyond made a number of noteworthy announcements on its investor call, including a new iteration of the Beyond Burger, expanded distribution, and involvement with McDonald’s recently announced McPlant product line. 

Beyond posted earnings below analysts’ expectations, reporting $94.4 million in revenues versus the expected $132.8 million. The company attributed slower sales in retail and foodservice brought on at least in part by the pandemic. However, Beyond CEO Ethan Brown said on the call that it was important “not to interpret this near-term pandemic induced drop in activity as a weakening in our long-term value proposition in this critically important space.” 

To that end Beyond made a few announcements on the call around forthcoming products and distribution channels. The biggest of these — or at least the one that grabbed the most headlines — is the company’s involvement with McDonald’s new line of plant-based meat products. Mickey D’s did not mention Beyond in its announcement yesterday. However, when asked about McPlant on its earnings call, Beyond’s Brown said, “Our relationship with McDonald’s is good.” After further confusion, Beyond made the following statement today: 

“Beyond Meat and McDonald’s co-created the plant-based patty which will be available as part of their McPlant platform.”

Why McDonald’s left Beyond out of its initial announcement is unclear. Also unclear is whether Beyond will be McDonald’s supplier for plant-based products going forward.

Less mysterious are Beyond’s plans for retail distribution. On this week’s call, the company announced the Beyond Burger will be available at 7,000 CVS locations in the U.S. in 2021. Beyond Meatballs, a newer entrant to the product portfolio, will be available at 5,000 CVS stores next year. The company also just announced a nationwide partnership with Pizza Hut and, overseas, has successfully trialed products at KFC locations in China. Q3 also saw the launch of Beyond’s direct-to-consumer e-commerce site, following a similar move by the company’s chief rival, Impossible.

Finally, Brown said his company will launch “Beyond Burger 3.0” (he did not provide a time frame) and that Beyond wants to make the current version of its burger “obsolete.” 

None of this was enough to keep Beyond’s stocks from dropping 8 percent after market close yesterday, though Brown again emphasized the long-term value of his company and mentioned the global opportunity for plant-based meats.

That opportunity is certainly huge. Recent numbers put alternative protein investment so far for 2020 well above $1 billion, with plant-based proteins grabbing the bulk of that sum. Part of this can be attributed to the pandemic. But as FAIRR pointed out when it reported the $1-billion-plus investment figure, the pandemic was just “the straw on the camel’s back.” Our reliance on traditional animal proteins was under scrutiny well before COVID-19, which suggests long-term demand for plant-based proteins even after the pandemic is under control.

Record case numbers suggest that day won’t arrive for a while. In the meantime, Beyond will need to boost its performance across both retail and food service in the coming months to keep a competitive edge in a very crowded plant-based meat market.

November 9, 2020

McDonald’s Is the Latest QSR to Embrace the Drive-Thru-Centric Restaurant Format

At its McDonald’s 2020 Virtual Investor Update today, McDonald’s unveiled a long-term growth strategy that includes a new loyalty program, more AI and machine learning in the drive-thru lane, and revamped formats for future locations. 

At the Update, which directly followed the company’s Q3 2020 earnings call, CEO Chris Chris Kempczinski and several other presenters outlined the pieces of this new strategy, dubbed “Accelerating the Arches.” 

Technology will play a huge role in future growth, particularly where the drive-thru is concerned. In 2019, the company acquired Dynamic Yield, whose tech can show menu options based on external data, such as the weather or traffic patterns in the area, and is currently installed at about 12,000 McDonald’s locations. At the time of the acquisition, McDonald’s suggested this system would eventually be able to make recommendations based on more personalized preferences and order history for each individual customer. Deploying that capability to the drive-thru lane is now part of the Accelerating the Arches plan (though there’s no definite timeframe).

Also in 2019, McDonald’s acquired voice-tech company Apprente. Some McDonald’s franchisees already have an Apprente-powered voice assistant taking orders, rather than a human being. Experts say Apprente could be ready to scale across the McDonald’s system as early as next year.

Other updates to McDonald’s drive-thrus will include express lanes for digital orders and a conveyor belt that delivers your food without the need for human-to-human interaction. 

Wait times at the drive-thru have progressively increased over the last several years, and the latest data shows that total wait time in 2020 was about 30 seconds longer than 2019 across the QSR sector. Add that to the pandemic-related need for more contactless ordering and more efficient ways of fulfilling off-premises orders (i.e., those outside of the dining room), and it’s no wonder reinventing the drive thru is at the top of the priority list for many QSRs. Burger King also envisions a conveyer belt in the drive-thru, and in terms of more AI-enabled tech and dedicated drive-thru lanes for digital orders, everyone from Dunkin’ to KFC is exploring options.

Like some of those other chains, McDonald’s is also rethinking the physical layout of future stores. Even before the pandemic started its latest streak of record-breaking case numbers, QSRs were doubling-down on off-premises formats and calling into question the future of the dining room. Many, including Burger King and Wendy’s, have announced drive-thru-only restaurants for the future. McDonald’s said at today’s investor Update that it is considering a store format that is just a kitchen serving drive-thru and pickup orders.

Finally, the company will launch a new loyalty app called MyMcDonald’s by the end of next year. McDonald’s today also announced McPlant, its own line of plant-based meats, which will be testing in markets in 2021. 

While all of these efforts are features and initiatives many brands are exploring, McDonald’s sheer size (nearly 40,000 restaurants worldwide) and inevitable influence over others could greatly accelerate the rollout of these technologies into the mainstream.

October 27, 2020

Kaffe Bueno Raises $1.3M to Turn Upcycled Coffee Product Into Functional Food

Denmark-based biotech startup Kaffe Bueno announced this week it has raised €1.1 million (~$1.3 million USD) in seed funding from Paulig Group Venture Capital, Vækstfonden, The Yield Lab, and an undisclosed angel investor. According to a company blog post, Kaffe Bueno will use the new funds to scale up production of existing products and launch new ones in addition to growing its team and securing intellectual property protection for its technology.

Kaffe Bueno bills itself as an ingredients company that uses upcycled coffee byproducts, such as grounds, to make cosmetics, nutraceuticals, and functional food and beverage products. The company, which was founded in 2016 by three Colombian entrepreneurs, currently has three products made from coffee byproduct: a lipid used in personal care and food products, a functional flour, and an exfoliant for cosmetics.

“Growing up in Colombia, coffee is much more than a beverage, we use it for everything: wounds, skincare, desserts, you name it,” cofounder and CEO Juan Medina said in today’s blog post.

Kaffe Bueno also noted that less than 1 percent of coffee’s “health-beneficial compounds” actually wind up in a brewed cup of joe. The rest of them go to the landfill, where they emit methane, which is 25 times more potent than carbon dioxide. Upcycling coffee byproduct for use in other products is a way to make greater use of coffee’s existing health benefits for consumers while simultaneously cutting down on waste and emissions. 

Functional ingredients and healthier cosmetics are a couple ways to make use of coffee byproduct. A growing number of other examples exist, including a McDonald’s/Ford initiative to turn coffee byproduct into car parts and Berlin-based Kaffeeform, which makes coffee cups from leftover grounds. Meanwhile, a company called Grounded will mail you a kit with which you can grow gourmet mushrooms from spent coffee grounds. 

For its part, Kaffe Bueno will launch “new food, nutraceutical, and cosmetic ingredients into the European market throughout the rest of 2020 and into 2021.

October 12, 2020

Green Monday Launches a Plant-Based Menu Across McDonald’s Hong Kong Locations

Hong Kong-based Green Monday announced today it has struck a longterm partnership with McDonald’s to launch a plant-based menu across all McDonald’s and McCafé locations in Hong Kong and Macau. The menu will incorporate Green Monday subsidiary OmniFood’s alt-pork products into the meals. Green Queen was first to break the news.

The new menu features six dishes developed around OmniPork Luncheon, a plant-based alternative to the processed meat product that’s popular in Asia. Meals include OmniPork Luncheon & Scrambled Egg Burger,  OmniPork Luncheon N’ Egg Twisty Pasta, OmniPork Luncheon Deluxe Breakfast and OmniPork Luncheon Jumbo Breakfast, as well as OmniPork Luncheon & Egg Cheesy Toast and OmniPork Luncheon & Egg Mayo Ciabatta. All items are vegetarian, though not vegan, since meals include egg.

David Yeung, cofounder and CEO of Green Monday, told Green Queen that the partnership is “the most monumental and game-changing breakthrough for the plant-based movement in Asia, and one of the biggest milestones globally.”

Currently, partnerships between McDonald’s and plant-based protein companies are few and far between. The mega-chain struck a partnership with Beyond Meat in Canada last year, though the chain ended that trial in April of this year and has no plans to renew it. In the past, McDonald’s has publicly said it will wait to see if plant-based protein is a longterm trend before aligning itself with any one brand. 

But thanks to the pandemic highlighting the perils of the meat supply chain, demand for and investment in plant-based protein products has grown so much that the sector is less a trend nowadays than it is a mainstay on retail shelves and restaurant menus. With other QSR brands already featuring plant-based items across their menus (see KFC’s Beyond Meat partnership), McDonald’s can hardly wait much longer to make plant-based items available among its own offerings.

Green Monday itself just raised $70 million. The OmniPork Luncheon menu launches tomorrow across more than 400 McDonald’s and McCafé locations combined. 

There is no official word on whether this partnership will expand, though Green Queen points out that Citic Group and the Carlyle Group, which operate the McDonald’s franchise business in Hong Kong, also run the QSR’s franchise business in Mainland China. OmniFoods debuted OmniPork there last year. Clinching the QSR segment market would be an enormous feat for both Green Monday and plant-based protein in general.

September 28, 2020

The Wonderful Company Wants New Innovations for Its 50,000 Tons of Pomegranate Husks

The Wonderful Company, best known for its pomegranate juices, is ready to infuse some cash into creative reuses of its pomegranate biomass.  

Today, the company launched its Wonderful Innovation Challenge. The competition will offer “up to $1 million” in funding and development resources to those with “pilot ready solutions for the 50,000 tons of pomegranate husks generated each year by juicing POM Wonderful pomegranates,” according to a press release sent to The Spoon. Food waste nonprofit ReFed will serve as a strategic advisor and managing partner for the competition. 

The pomegranate husk, also known as pomace, consists of the fruit’s pulpy remains after it has been crushed and its juice extracted. On the competition’s website, The Wonderful Company says the pomace is usually sold as dairy feed but “recent shifts in the market have prompted the exploration of new, alternative outlets.”

To find those alternative outlets, Wonderful’s new competition is looking for companies with ideas that are ready to pilot and backed by “a data-driven business model.” The tools, technologies, and processes companies can use is fairly open-ended: the competition only notes that concepts should demonstrate potential for positive environmental or social impact. 

Chosen winners get funding from a $1 million reward pool, as well as assistance in developing their concepts. Applicants should request the amount they will need to develop their pilots when they submit their ideas.

Wonderful is the latest company to join the movement for upcycling the inedible parts of food items, and in the last several months, we’ve seen many creative ideas come out of this movement. It joins companies like Renewal Mill, who is currently making cookies from upcycled okara flour and Harmless Harvest, a company turning leftover salmon skin into snacks. Major corporations are also getting involved. For example, researchers at the University of Toronto Scarborough turning McDonald’s deep-fryer oil into 3D-printing resin.

Innovations in upcycling increase as the conversation around the world’s food waste problem gets louder. As we discussed in a recent Spoon Plus report, solutions for fighting food waste now come in all different shapes and sizes. While Wonderful’s new competition specifically focuses on food scraps that can’t be eaten, it joins other companies and organizations in the urgent fight to keep food out of landfills.

Tech has a potentially big role to play in the process of upcycling inedible food scraps, and we’ll doubtless see some of it surface in Wonderful’s competition. 

The application process is open now and runs to Dec. 7, 2020.

September 13, 2020

Time to Recirculate the To-Go Cup Debate

Since we now live in a world where the to-go order is the main attraction at restaurants, we need to start treating the issue of excess single-use packaging with a whole lot more urgency.

Clearly I’m not the only one to have that thought, as two major QSR chains made sustainability announcements of their own this week. Both are aimed at reducing the amount of plastic that winds up in landfills and the ocean — no small feat considering the billions of single-use cups, straws, and containers we throw out each year, thanks in no small part to the convenience-driven delivery and to-go craze. 

On Thursday, Starbucks, sent out an update saying its “strawless lids” are now “the standard for iced beverages” at stores in the U.S. and Canada. The lids use roughly 9 percent less plastic than the normal lid-and-straw combo. The rollout of these lids applies to company-owned and licensed Starbucks stores, and is expected to be completed by the end of the month. Straws will still be available upon request. 

It’s an important milestone, especially considering Starbucks is arguably responsible for the populace’s current fixation with fancy drinks in plastic or plastic-coated cups. But it doesn’t actually remove single-use plastics from equation.

The latest initiative from McDonald’s does. This week, the company announced a partnership with zero-waste platform Loop to create a reusable cup program at McDonald’s locations in the UK. Users can opt for a reusable cup, for which they leave a small deposit that’s retrieved when they return the cup. Loop collects the empties, washes and sanitizes them, and puts them back into circulation. The concept is reminiscent of Dishcraft Robotics’ “dishes-as-a-service” model, which recently added reusable takeout containers to the items it collects, washes, and returns to the foodservice loop.

The obvious drawback here is that putting down a deposit at McDonald’s and then taking the time to return the cup is inconvenient. Inconvenience doesn’t sell with many consumers these days (which is another separate issue itself). 

A reusable cup system is, however, a bolder move than simply reducing plastic, and bold moves are what we need right now to get excessive packaging out of the foodservice world. That the McDonald’s pilot is coming from a multi-billion corporation with a $4 billion digital business is encouraging. But to become widespread, the entire restaurant industry is going to have to pitch in, from the major chains and supply companies to delivery services, mom-and-pop stores, and consumers themselves.

That’s no small ask at a time when the restaurant industry is utterly crippled from the pandemic and small chains and independent restaurants are permanently shuttering at an alarming pace. But with off-premises orders being the future of restaurants for the foreseeable future, no one can afford to shelve the glaring issue of single-use packaging for much longer, not without risking further environmental consequences.

This is the web version of our newsletter. Sign up today to get updates on the rapidly changing nature of the food tech industry.

Zomato Raises $100M, Plans IPO

Zomato, one of India’s largest food delivery services, announced this week it has raised $100 million from Tiger Global and is preparing for an IPO in 2021.

The news is just another layer of development to what’s been a very busy year for Zomato. The company bought Uber Eats’ India business in March, raised a $5 million Series J round in April, and unveiled a grocery delivery service in the same month. It had to cut 13 percent of its workforce in May (thanks, pandemic), but things are clearly looking up for the service, as it raised $62 million from Temasek and just days ago said in a blog post that “recovery trends are strong.”

A prospective IPO is another sign of that recovery. In a letter to employees reviewed by TechCrunch, Zomato co-founder and CEO Deepinder Goyal set “sometime in the first half of next year” as a timeline for said IPO. At the moment the company has “no immediate plans” on how it will spend the investment from Tiger Global, if it spends it at all. Goyal called the cash a “war-chest” for future M&A and for fighting price wars from competition.

Given that Zomato competes fiercely with Swiggy for the Indian food delivery market, and given the consolidation the entire third-party delivery industry is undergoing, having a war chest doesn’t seem like a bad move right now.

Restaurant Tech ‘Round the Web

Fast-casual chain Sweetgreen this week launched Collections, a new digital-only menu available through the restaurant’s app and website. According to a press release sent to The Spoon, menu items are curated according to specific themes and dietary preferences/restrictions, and will make recommendations that are unique to each individual customer.

Order-ahead platform Allset has teamed up with digital ordering platform Olo to streamline the pickup order process for participating restaurants. Olo’s system lets restaurants manage menus, pricing, and order fulfillment across multiple third-party platforms, thus creating fewer manual workflows for restaurant staff.

Starting Sept. 30, NYC restaurants will be allowed to operate indoor dining rooms at 25 percent capacity. The announcement, made by Gov. Andrew Cuomo this week, comes just as the city gears up for the colder days ahead that will limit outdoor seating for most businesses.

September 9, 2020

McDonald’s Partners With Loop to Pilot Reusable Packaging

With the restaurant industry currently being reinvented with to-go-first experiences in mind, there’s cause to worry that the shift will add even more single-use cups, straws, and boxes to our already bulging landfills. So it makes for a small silver lining that McDonald’s today announced a partnership with Terracycle’s zero-waste platform Loop to pilot a reusable cup model.

The program will first be trialed at select McDonald’s in the UK in 2021. For a small deposit, customers will get a reusable Loop cup for their hot beverages. The deposit can be redeemed by returning the cup to any participating McDonald’s location, according to today’s press release. Loop will retrieve the used cups, wash them, and return them to the cycle.

As to whether this reusable cup program will make its way to the States, a McDonald’s spokesperson said, “The feedback collected through these packaging trials will help inform which options are scaled up or adopted in other countries around the world.”

Loop’s main business lets customers shop online for grocery, household, and beauty products from well-known brands, then get them delivered in packaging. Living up to the platform’s name, Loop  retrieves and cleans the empty containers once a customer is finished, and the cycle starts again. The company currently has partnerships with Häagen-Dazs, Tropicana, Nature’s Path Organic, and several well-known personal care brands. The service is available in select U.S. cities and is in the process of expanding to more places, including international locations.

The McDonald’s partnership comes at a time when the fight for a more sustainable restaurant has to co-exist alongside the fight against COVID-19. Some chains, notably Starbucks, have banned reusable cups for the time being, (understandably) citing safety concerns. But the sustainability issue can’t be put on hold for long, particularly since the increase in to-go orders could eventually equal an alarming increase in trash, too.

Whether you love big restaurant chains or fear they’ll be the only ones left after the dust from the restaurant industry upheaval settles, it’s worth acknowledging that they’re typically the ones with the deep enough pockets to invest in new forms of to-go containers. For its part, McDonald’s has already piloted other circular solutions for cups, including the Recup system in Germany and the chain’s participation in the NextGen Cup Challenge in the U.S.

Earlier this year, the company also completed construction on its first “net zero energy-designed restaurant” in Florida. At the time of that news, I wrote that billion-plus-dollar restaurant chains like McDonald’s, Chipotle, etc. are the ones that need to take the lead in writing the playbook for sustainability in the restaurant. Smaller restaurants — the ones that have managed to survive the fallout — still struggle to remain open, so it seems unreasonable right now to ask them to also reinvent the paper cup. 

McDonald’s, on the other hand, has a $4 billion off-premises business and a recent track record that’s heavy on the innovation front. Using some of those dollars and resources to create a more sustainable restaurant experience seem the next logical step. 

August 2, 2020

Winter Is Coming for Outdoor Dining, So Get Going With Off-Premises

In further proof that you can’t solve the current restaurant industry crisis by flipping a switch, Upserve released new data this week that shows many restaurants are still struggling with off-premises formats.

Upserve’s survey polled 421 players across different types of restaurants, including full-service/dine-in, fast casual, QSRs, and fine dining, among others. The big takeaway? More than half (64 percent) of restaurants feel “optimistic” about the future, but nearly half (47 percent) struggle with shifting their business models to online ordering and the formats that come with it.

We’ve seen this play out in real time for better and for worse throughout the last several months. Restaurants historically focused on dine-in service have had to pivot to delivery and curbside pickup, not to mention find affordable tech solutions that could enable online ordering. Businesses have struggled to master off-premises operations. They’ve gotten really creative with ad hoc tech stacks and worked much harder to communicate with their customers. And most all of them have seen a rise in off-premises orders. Upserve’s report said that as of July, its restaurant customers “have seen a 782.7% increase in Online Order sales volume growth.”

But Upserve also points out that autumn is practically upon us, and once colder weather comes, the option for outdoor seating will go away, not just for its own customers but for everyone. “It’s key that restaurants find an online ordering solution that works for their customers by the fall,” the report said.

The call to action for all restaurants right now is to get their off-premises strategies fine-tuned, streamlined, and operationally efficient, regardless of the trajectory of the pandemic or the future of indoor dining. Even if indoor dining returns in some form close to what we used to know, its chances of unseating off-premises at this point are slim to none.

Here’s Why Delivery Price Hikes By QSRs Could Spike Demand for Drive Thru

Admittedly, I brushed over news from earlier this week that some QSRs are raising their delivery prices more than 15 percent. But the more I’ve thought about it over the last few days, the more I wonder at two things: the chains’ motivations behind the price hikes and whether they’ll prompt more customers to order drive-thru and pickup to save a few bucks. 

Business Insider first wrote about the price hikes, noting that Chick-fil-A’s prices are 30 percent higher for delivery, while Starbucks and McDonald’s prices are about 20 percent higher. My own unscientific analysis compared the costs of McDonald’s double quarter pounder with cheese meal and found it to be $9.19 on Uber Eats versus $7.99 via McDonald’s own app. (Both prices are before taxes, delivery fees, and tip.)

That example is arguably not going to break the bank. But consider that since more people are staying home and ordering for the whole household, delivery orders are likely much bigger than a single meal, which could significantly raise the cost of dinner. 

Of course, part of the reason for these price hikes is that large chains, just like small restaurants, have to pay the third-party delivery piper when it comes to commission fees, which can go as high as 30 percent. Passing some of that burden on to the customer makes sense from a business perspective.

Question is, will customers want to shoulder that delivery burden when they could hop in the car, drive a couple miles, and collect their food via curbside pickup for cheaper? In many cases, probably not. For one thing, a lot of food from QSRs just doesn’t travel well and you typically wind up with soggy fries, watery soda, and lukewarm burgers. For another, we’re in economically uncertain times, y’all. 

Given all that, more customers will be motivated to order their fast food via pickup and drive thru, which may be part of these chains’ longer-term strategies in terms of price hikes. Restaurants make more money off pickup orders (no commission fees), and when orders are funneled through the business’s own digital properties, the customer data remains in-house. Over the last year we’ve seen an uptick in brands encouraging customers to order via in-house apps, while others are even launching their own full-stack delivery services. 

Price hike’s won’t take third-party delivery down, but if customers respond by choosing pickup, curbside, and drive-thru, the loss of business will be another swing of the hammer currently trying to crumble third-party delivery’s chances of profitability. 

Elsewhere in Restaurant Tech . . .

  • Iconic hot dog chain Nathan’s Famous has partnered with REEF to use the latter’s ghost kitchen network to fulfill more off-premises orders. The partnership is now in Manhattan, and Nathan’s has cities like LA, Portland, and Minneapolis on the horizon. 
  • Yum Brands’ digital sales hit an all time high of $3.5 billion in Q2 of 2020. The parent company of Taco Bell, KFC, and Pizza Hut notably said on the call that opening dining rooms was important but not “critical” to the company’s success. 
  • Sonic unveiled a new drive-thru design that’s further proof the drive-thru experience is also being reinvented. Contactless order and payment capabilities, expanded patio areas, and “lawn games” (?!) are all part of the new design.
  • Oakland this week became the latest city to approve a cap on commission fees third-party delivery services charge restaurants. The 15-percent cap is effective immediately and last until 90 days after the COVID-19 health emergency is over. Whenever that is. 

July 30, 2020

Denny’s Off-Premises Sales Have Almost Doubled Thanks to the Pandemic

Denny’s announced on its Q2 earnings call this week that average weekly sales for off-premises orders have almost doubled since the start of the pandemic, from $4,000/week in February to $7,900/week in July.

Like other restaurants that have historically been known for their in-dining room experiences, Denny’s found itself having to quickly pivot when the pandemic hit. Speaking on the call, John C. Miller, CEO of the Spartanburg, S.C.-based chain, outlined the ways in which his company has adapted to the changes.

Those efforts included continued focus on Denny’s long-established Denny’s on Demand platform, which allows guests to place online orders for pickup and delivery. (The chain’s menu is available through most of the major third-party delivery services.) Like others, it also added curbside pickup and, once stay-at-home restrictions began to loosen, converted areas of its parking lots and sidewalks into outdoor seating.

The reinvention of the restaurant menu is another common theme to emerge from this pandemic. And by reinvention, I mean pared down selections that allow kitchens to work more efficiently. Denny’s was no exception here, having streamlined its own menu to focus on its most popular items, and offering family-style bundles, as well.

If Denny’s story of off-premises orders saving the day sounds familiar, that’s because it’s the state of most major restaurant chains the U.S. right now. McDonald’s said it made 50 operating changes to get “pandemic ready,” many of them around digital ordering and off-premises orders. Starbucks, which saw one of its toughest quarters so far, is completely overhauling some traditional sit-down locations and turning them into to-go-centric stores. 

Denny’s itself has permanently closed some of its sit-down locations due to “unforeseeable business circumstances prompted by COVID-19.”

“This quarter has proven to be one of the most difficult quarters this country and especially the full-service restaurant industry has ever seen,” Miller said on the call. And there’s no telling what Q3 will look like, since the state of the restaurant industry changes practically every day and full recovery is dependent in part on the trajectory of the pandemic.

Next

Primary Sidebar

Footer

  • About
  • Sponsor the Spoon
  • The Spoon Events
  • Spoon Plus

© 2016–2021 The Spoon. All rights reserved.

  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube