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Daily news and analysis about the food tech revolution

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McDonald’s Partners With Adyen to Launch Mobile Payments Tech Worldwide

McDonald’s has struck a deal with international payments platform Adyen NV, which will receive and process payments made in the chain’s mobile app, according to a press release from Adyen.

The agreement will make Adyen’s payment platform available to McDonald’s locations starting in the U.K. in early 2020, with plans to expand internationally in the future.

Adyen’s claim to fame is that its system makes running and implementing mobile payments easy for businesses. Using what Adyen calls its “unified commerce experience,” businesses can more easily accept any type of digital payment across sales channels (e.g., mobile app, kiosk, etc.), add new ones, and create a consistent order and pay experience for customers across regions. In other words, ordering via the McDonald’s mobile app in China would look, feel, and function much the same as in the U.K., with the system automatically adjusting features like language, currency, and country-specific payment methods. 

Adyen counts a number of high-profile clients on its roster, including Spotify, Uber, and Bonobos. In the food world, the company’s portfolio of restaurant companies is growing, too, with Domino’s, Dunkin’, and Deliveroo all using the Adyen system. 

The benefit for McDonald’s here is scale. Because Adyen’s technology makes it easy to add payment methods and onboard franchisees, McDonald’s can, in theory at least, more quickly roll out a consistent order and pay experience across the globe. That frictionless experience for customers will be important for McDonald’s, who expects delivery to drive $4 billion of global system-wide sales in the future. Already, the chain has invested in plenty of technologies to help meet this demand. In March, the chain acquired AI company Dynamic Yield to improve menu personalization. More recently, in September of 2019, McDonald’s acquired voice-tech startup Apprente. Former CEO Steve Easterbrook — who many saw as the driving force behind all this tech — departed from the company in November, but that hasn’t slowed down any of McDonald’s tech ambitions.

Meanwhile, Adyen’s Chief Operating Officer Kamran Zaki hopes to eventually expand the new partnership to more than just mobile payments. Adyen currently offers a number of other payment platforms, including in-store kiosks, and mobile POS systems.

Spoon Market Map: Ghost Kitchens in 2019

Just half a decade ago, the phrase “ghost kitchen” referred to restaurants that looked legit on Grubhub and Seamless but were actually digital fronts for unregulated kitchens. In other words, chicken tenders from what appeared to be a local restaurant might actually have been cooked in someone’s apartment.

Then the delivery boom went off, thanks largely to the growth of third-party services like Grubhub and DoorDash, and by the many digital channels through which customers could suddenly get food. Order tickets proliferated for restaurants, but so too did the stress around how to fulfill those orders without over-burdening the in-house kitchen staff.

The answer to the problem? Take the restaurant out of the kitchen.

In the last few years, restaurants have been moving many of their operations around delivery and to-go orders to dedicated kitchen spaces outside the main restaurant location. The name “ghost kitchen” has stuck around, but now it’s a health-department-friendly term for these spaces that act as hubs for off-premises orders.

But actually, there are many names nowadays for the concept: ghost kitchen, virtual kitchen, cloud kitchen, the (slightly nauseating) description “kitchen as a service.” All those phrases amount the same thing: a kitchen facility that exists solely for the purpose of helping restaurants cook and fulfill to-go orders and get them into the hands of delivery couriers. There is no dining room or front-of-house staff in a ghost kitchen, the tech-stack is more streamlined than that of a full-service restaurant, and, increasingly, the location is completely separate from a restaurant’s dine-in location(s). Now, too, there are also kitchens on (literal) wheels, which add yet-another piece of mobility to the business model. 

To help you navigate the evolving world of ghost kitchens, we’ve created a market map for your reference. This market map is intended to be a snapshot of the current ghost kitchen landscape in 2019. It’s not comprehensive, and we expect both it and the overall landscape to change drastically over the next 12 months. That means you can expect to see this map updated regularly. As always, we welcome suggestions for additional companies and players in this space.

Have suggestions? Drop us an email.

1. Kitchen Infrastructure Providers

The largest category in ghost kitchens right now, Kitchen Infrastructure Providers can be likened to cloud computing providers: they rent companies the space and tools needed to run a business, either as a flat-fee model for on a pay-as-you-go basis. 

Kitchen United, for example, charges a monthly membership fee that includes rent, equipment, storage, and services like dishwashing. Reef, which originally made a name for itself reinventing the concept of the parking garage, offers these things as well as direct partnerships with major third-party delivery companies like DoorDash and Postmates.   

Normally these facilities are large, warehouse-like buildings that hold multiple “restaurants” under a single roof. For large restaurant operators with multiple chains looking to fulfill extra demand brought on by delivery or test out new concepts without incurring too much risk, these are ideal.

Multi-unit chains can also use these spaces to reach customers in areas where they might not have a brick-and-mortar store. Chick-fil-A is widening its reach in the SF Bay Area by working out of DoorDash’s newly opened facility.

2. Restaurant-operated Kitchens

For some restaurants, running a ghost kitchen operation themselves makes more sense than teaming up with a third-party kitchen provider. This is often the case with smaller, independent restaurants, whose ghost kitchen might consist of nothing more than an area of the restaurant’s existing location(s) dedicated to fulfilling off-premises orders. Or it might apply to multi-unit chains who simply want to expand to new areas and don’t have the capital or inclination to deal with the burden of a full-service restaurant. Colombian chain Muy is one such company, having started as a dine-in restaurant before expanding its ghost kitchens to serve more areas of Latin America.

The most notable of all the companies in this category right now is Starbucks. In addition to building out “to-go” stores that exist solely for the purpose of fulfilling off-premises orders, the company has also partnered with Alibaba to turn parts of the latter’s Hema supermarkets into ghost kitchens in China.

The boundaries around this category are especially fluid. In other words, just because you operate your own ghost kitchen in one part of the country doesn’t mean you can’t team up with a third-party provider in another, as The Halal Guys and Chick-fil-A have done.

3. Virtual Restaurant Providers

This is where the lines really start to blur between restaurant, kitchen provider, and delivery company. Anyone can make a virtual restaurant, and as the category in our map shows, more than just restaurants are trying their hand at food concepts that can only be ordered through digital channels and are prepared in a ghost kitchen. Whole30, for example, is a diet concept better known for its cookbooks than its dealings with the restaurant industry. The folks behind that brand teamed up with Grubhub and restaurant company Lettuce Entertain You to create a virtual restaurant offering meals with Whole30-approved foods. 

On the other hand, a company like Keatz runs a network of virtual restaurants it houses beneath the roof of its own ghost kitchens. Taster, based out of France, creates native restaurant brands for food delivery companies like Uber Eats and Deliveroo. Food is cooked in Taster-run kitchens.

4. Mobile Kitchens

In slightly more its own category, companies like Ono Food Co. and Zume are creating robotic, self-contained kitchens on wheels that offer restaurant experiences that can be tailored to specific neighborhoods in a city and also plug into third-party delivery services.

Restaurants can also partner with these kitchens on wheels to expand their reach into new markets, as &Pizza has done by teaming up with Zume.

What’s Next for Ghost Kitchens

Ghost kitchens will become the norm for multi-unit chains. With off-premises orders expected to drive the majority of restaurant sales growth over the next decade, multi-unit brands (think Panera, Chipotle, etc.) will find ghost kitchens a cost-effective way to meet this demand without overburdening existing restaurants. The majority of them will rent space from kitchen infrastructure providers, as Chick-fil-A is currently doing with DoorDash. 

There will be an explosion of delivery-only brands. Since ghost kitchens provide a cheaper, faster way for food entrepreneurs and small restaurants alike to test-drive new concepts, we will see an influx of delivery- and pickup-only brands come out of these kitchens over the next year. Many will be born inside the walls of facilities like Kitchen United or CloudKitchens. Meanwhile, the number of virtual restaurant networks like that of Keatz will increase. 

Artificial Intelligence will be designed into the kitchen. AI is a really broad term that’s often misused. That fact aside, its presence in the restaurant industry is here to stay, and in ghost kitchens, it will prove itself valuable for everything from tracking ingredients to helping staff curb food waste. On the consumer end, we expect to see the technology more deeply integrated into the apps and websites from which customers order, improving recommendations and upselling opportunities.  

More non-restaurant food brands will launch virtual restaurants. In keeping with a trend recently made popular by Whole30 and Bon Apétit, food brands, diets, celebrity chefs, and other non-restaurant businesses will team up with third parties to launch delivery and pickup concepts. Grubhub and Uber Eats are two such third parties already doing this. Expect many more such partnerships — soon.

Bonus: The tech stack will get pared down. No front of house means no POS, right? Quite possibly. With less (or no) customer-facing technology like digital menu boards, self-order kiosks, and tabletop ordering, much of the restaurant tech on the market today becomes irrelevant in a ghost kitchen setting. As the folks at Reforming Retail noted recently, “under this scenario the POS is just an ordering node in the cloud that outputs your menu to a consumer and sends orders to your kitchen.”

That doesn’t mean restaurant tech is going by the wayside. Some ghost kitchens, like those of Muy, have a walkup option where customers order at kiosks onsite, and there will doubtless be new solutions created that are specifically for the ghost kitchen. But the tools of tomorrow’s ghost kitchen won’t look a thing like today’s bloated restaurant-management tech stack. For everyone involved, that’s a bonus.

Swag Alert: McDonald’s Opens First E-Commerce Shop

McDonald’s has gone to great lengths in the last few years to get us consumers stuff we don’t need, like branded scrunchies and massage chairs. And just in time for the holiday season, the company has opened its first-ever e-commerce shop in which to sell more of said stuff we don’t need.

According to a McDonald’s press release, the online shop, dubbed “Golden Arches Unlimited,” features McDonald’s-branded “fun and functional” merchandise not available anywhere else. The lineup of items will rotate seasonally, and starts with a winter collection that includes a beanie, holiday sweaters, and tree ornaments. It’s also a different roundup of merchandise than what you’ll find during the company’s McDelivery Night, which it does in partnership with Uber Eats each year.

Prices at the new online store cover a wide range, from about $15–$65 for apparel and $10–$25 for accessories. Items are branded with the famous golden arches and feature the brand’s signature yellow, red, and white color scheme.  

As the press release notes:

“Since the 1980s we’ve partnered with multiple fashion brands and retailers, and beginning in 2017 we launched our own limited-time-only line of merchandise through the McDelivery Collection. Now, we’re making it easier than ever for you to show off your brand love with direct access to branded items at GoldenArchesUnlimited.com.”

Which brings up an important point that goes beyond McBranded beanies. Thanks to delivery, more customers nowadays choose to order their fast food from the comfort of their own homes, which means they’re less likely to actually set foot inside a McDonald’s brick-and-mortar location. QSRs are as a result are having to meet those customers where they are rather than the other way around. Increasingly, that place is online. 

In fact, a number of QSRs now offer ridiculous-yet-enticing swag for sale via e-commerce shops. Dunkin’ opened its own e-commerce shop last month that sells wares like branded pajamas and dog accessories. KFC is selling fried-chicken-scented firelogs exclusively via Walmart.com. If it all sounds too dumb to be true, consider that last year, the latter’s Colonel Sanders Funko Pop sold out in 11 minutes. When it comes to enticing digital customers through physical goods, apparently swag works.

McDonald’s and Ford Are Turning Coffee Beans Into Car Parts

The concept of upcycling food waste has brought us things like snacks, beers, and flour, and now it’s about to make fuel more efficient in cars.

At least, that’s what McDonald’s and Ford Motors are aiming for with their new partnership. Today, Ford announced it is working with the mega-QSR to turn coffee bean chaff into headlamp parts for its luxury Lincoln cars. 

Chaff is the dried skin of a coffee bean that comes off naturally during the roasting process. According to a press release from Ford, the two companies have been working together for more than a year, and during that time discovered that chaff can be converted into durable material to reinforce certain car parts. In the case of the Lincoln headlamps, it replaces talc and, thanks to its higher heat performance and it being a lighter material, makes the vehicle more fuel efficient. 

From the press release:

“The chaff composite meets the quality specifications for parts like headlamp housings and other interior and under hood components. The resulting components will be about 20 percent lighter and require up to 25 percent less energy during the molding process.”

The partnership will use coffee chaff from Canadian company Mother Parkers Tea & Coffee Inc., who supplies coffee to McDonald’s in North America. McDonald’s told Nation’s Restaurant News that “a significant portion of its coffee chaff in North America” will be used for the car parts.

Upcycling food waste is common enough for things like snacks. As the McDonald’s-Ford news highlights, companies are now looking beyond edible goods to give food leftovers a second life. For example, a company called Agraloop turns crop food waste (think sugarcane bark) into natural fibers for clothing and is developing partnerships with retailers like H&M and Levi’s. In the UK, Chip[s] Board is making sustainable plastic for eyeglasses out of discarded potato peels. These are but two of the many ways in which we’ll see manufacturers putting unused food parts to good use in the coming years.

Ford says this is the first time it has used coffee bean skins for vehicle parts. The company said in the press release that it plans to continue its partnership with McDonald’s, where the two companies will explore further ways to use coffee chaff and other food waste for car parts. 

 

McDonald’s and Uber Eats’ Latest Contest Is Another Play to Build More Brand Loyalty Online

If Thanksgiving leftovers aren’t your thing, consider entering McDonald’s latest contest, which gives Twitter users the chance to win free late-night food for an entire year from Uber Eats. 

The contest runs from today (November 27) through Cyber Monday (December 2), according to a McDonald’s press release. To enter it, fans must tweet two menu items they want delivered and include the following tags: #McDelivery, #Sweepstakes, @McDonalds and @UberEats. The grand prize is one year of free late-night delivery awarded as an Uber Eats promo code, along with a bundle of weird McDonald’s swag that includes, among many other items, a massage chair. An additional 50 winners will get a Late-Night Weekender Bag with a $20 Uber Eats promo code.

That’s a lot of burgers and fries, but in the bigger picture, this contest — like many other recent QSR promo efforts — isn’t about free swag or even free food. It’s about McDonald’s and Uber Eats finding new ways to brand themselves in a restaurant industry that’s increasingly moving online. Delivery and pickup orders placed via apps and websites are only going to increase over the next decade, particularly as a younger generation raised in a connected world comes of age. Sweepstakes like this one are as old as the QSR concept itself. McDonald’s and others are simply tweaking the concept to meet their audiences online, where they have the greatest chance of boosting brand loyalty.

More importantly, social media-based contests like these give QSRs more access to data on customer preferences. Having fans tweet the food items they want delivered late at night is, after all, a pretty clear-cut way to determine what people are ordering in the after hours. (Though AI does a pretty decent job of that, too.)

For Uber Eats, enticing more potential delivery customers is key, as the service’s longstanding exclusive contract with McDonald’s ended in July when the chain brought on DoorDash and Grubhub as additional delivery partners. And with customer loyalty to any one delivery platform not particularly loyal right now, these companies need every method they can get their hands on in order to keep existing customers firmly entrenched in their own ecosystems. I doubt contests basically giving away food and free massage chairs will be the strangest efforts we see as this trend continues to take hold.

As Restaurants Move Online, Is Weird E-commerce Merch the New Way to Customers’ Hearts?

Dunkin’-branded pajamas. Gravy-scented candles from KFC. McDonald’s playing cards. If silly merchandise bearing a QSR logo is your thing, you’re living in the right century, as a growing number of restaurant chains serve up branded swag via digital e-commerce channels.

Dunkin’ emphasized the point again recently when it announced its first-ever online pop-up holiday shop that will offer, according to a press release, “a selection of Dunkin’-ized holiday gifts that fans can’t find anywhere else.” Dunkin’ customers can purchase things like wrapping paper, pint glasses, and dog accessories at the limited-time shop.

While the holidays always bring their fair share of branded merch, the Dunkin’ news points to a larger trend happening among QSRs. More and more, restaurants seem to be using e-commerce stores and events to not just sell merchandise online but also create yet-another digital experience for customers that will potentially boost their loyalty to the brand.

KFC is another notable example. The chain has released, among other items, the aforementioned gravy-scented candle, a fire log that smells like fried chicken, and a Funko Pop figure of Colonel Sanders. Sound too dumb to work? Think again: the Funko Pop sold out in 11 minutes.

Meanwhile, McDonald’s takes its e-commerce efforts to the delivery realm each year with its McDelivery Night done in partnership with Uber Eats. The online event, the latest of which just happened in September, lets McDonald’s customers who order via Uber Eats add a free piece of swag to their cart on that night. This year, limited-edition merch included earbuds, scrunchies, and a snuggie-like garment I want someone to mail me right now.

White elephant gift ideas aside, obtaining these items means going into the QSR’s ecosystem, which presents chains with a potentially bigger audience — and much more customer data. Generation Z, in particular, is 20 percent more likely to order food from a fast-food restaurant and at the same time very willing to fork over personal data in exchange for food, experiences, and snuggies alike. 

Will we see more of this in 2020 and beyond? Yes. With more QSRs doubling down on digital ordering and loyalty programs, and with many of them now exploring off-premises models like ghost kitchens, the restaurant experience now has one foot firmly planted in the virtual realm. Tangible goods bought through e-commerce pop-up shops and delivery events will become a standard method for roping in more digital-only customers.

Will Steve Easterbrook’s Departure Slow Down McDonald’s Tech Initiatives?

McDonald’s has fired CEO Steve Easterbrook after he engaged in a consensual relationship with an unnamed employee. The board voted on Friday to remove him, according to the Wall Street Journal. McDonald’s USA President Chris Kempczinksi was named the new CEO, effective immediately.

According to the WSJ, Kempczinksi noted he would maintain Easterbrook’s focus on tech, saying, “There isn’t going to be some radical strategic shift. The plan is working.”

Clearly, no sane executive in 2019 would reverse course on technology initiatives that could speed up and simplify restaurant operations while also meeting demand for delivery, convenience, etc. For McDonald’s, however, this executive shakeup could certainly slow the pace of change.

Under Easterbrook’s tenure, McDonald’s pursued an aggressive strategy around technology. In the last year alone, that included the acquisition of Dynamic Yield and subsequent rollout of the latter’s AI technology at McDonald’s drive-thru, buying up voice-tech startup Apprente and building a new tech innovation lab, expanding delivery with more third-party partners, and a heap of other developments that seem to land in the inboxes of us reporters every other day.

All this and more is part of McDonald’s Experience of the Future mandate for stores, an initiative that requires franchisees to update their store designs, invest in tools like self-order kiosks and new menu items (e.g., fresh beef), and curbside pickup.

Not surprisingly, McDonald’s franchisees have pushed back at these costly but not necessarily profitable changes. A recent Bloomberg article noted that “[Franchisees] object to the enormous costs of the project, which, for owners of several locations, can run into tens of millions of dollars, even with McDonald’s offering to subsidize 55 percent of the capital for the remodels.”

About a year ago, a group of U.S.-based McDonald’s franchisees formed the National Owners Association advocacy group to address some of these challenges. For example, franchisees were originally required to have their locations remodeled by 2020, a date that, after enough outcry, was pushed back to 2022 (albeit with caveats).

Easterbrook’s departure won’t stop tech innovation at McDonald’s. Nor should it. And to be clear, no one has officially yet stated any specific changes to the strategy. But the conversation around franchisee tensions has only grown louder in recent months, and under Kempczinksi’s leadership it’s possible McDonald’s could slow its pace on some of these developments or give franchisees more say in how to implement some of these initiatives without incurring some of their heavy costs. Meanwhile, McDonald’s has to somehow address its sluggish sales while still maintaining its edge over other QSRs, who are rapidly deploying self-order kiosks, AI in the drive-thru, and other high-tech solutions. Whether the chain can do that more effectively under Kempczinksi looks to be yet-another unanswered question in this ongoing McSaga.

KFC Hints at AI, License Plate Recognition for Drive-thrus

KFC is exploring technology that would automate the process of ordering and upselling items in the drive-thru, according to an interview the chain’s U.S. Chief Technology Officer Christopher Caldwell did with Nation’s Restaurant News this week. KFC’s strategy looks to be focused on AI technology similar to that of McDonald’s, whose digital menu boards speed up ordering and automatically recommend items to customers.

The news comes on the heels of KFC’s little-publicized launch of an in-house online ordering platform, which happened earlier in October and is clearly part of a larger push from the Louisville, KY chain to increase efforts around the digital restaurant experience.

While Caldwell said the new native online ordering platform is “exceeding expectations” in terms of customer response, improving and innovating on the drive-thru is crucial for KFC.

That’s hardly surprising. Speed of service at the drive-thru in general has steadily gone down over the last decade, with the average time in 2019 a good 20 seconds longer than the previous year. But drive-thrus still account for a huge percentage of sales at QSR chains. For KFC, they account for about 65 percent of sales, according to Caldwell. Using automation in the drive through could potentially minimize both mistakes that happen during the order-taking process in the drive-thru as well as the length of time a customer spends waiting.

Caldwell also said drive-thru technology could bump up check averages thanks to better personalization and suggestive selling — one of the key benefits McDonald’s has been touting with the Dynamic Yield AI technology it’s rolled out to thousands of drive-thrus of late. He also hinted at license-plate recognition in the future, where the system can scan a customer’s plate and immediately suggest that person’s favorite meal.

A number of other QSRs are now testing new technologies and methods to speed up service in the drive-thru. Chains like Dunkin’, Krispy Kreme, and Chipotle are adding lanes for mobile-only orders. Sonic piloted AI-powered menu boards earlier this year. Meanwhile, companies like 5thru and Valyant AI are partnering with QSRs to automate more of the process through AI.

KFC hasn’t actually deployed any of this technology to actual stores yet, though Caldwell told NRN that “there’s going to be no shortage of [KFC] franchisees that want to adopt and be a test partner” when that finally happens.

The Week in Restaurants: Starbucks Expands Delivery, Lavu and Omnivore Simplify In-House Tech

Between earnings reports and food delivery bidding wars, there was much to keep a pulse on this week in the restaurant biz. Before you slam into that pumpkin-spice latte on your desk (for shame, btw), here’s a glance at some new developments in restaurant tech from the week.

Starbucks Expands Delivery to 5 New Markets
Starbucks announced this week the latest expansion in its quest to deliver coffee across the nation. Through its Uber Eats program, the chain has added Atlanta, Denver, Phoenix, Philadelphia, and New Jersey, along with further expansion into the New York Metro area. The new locations bring Starbucks total delivery radius to 16 U.S. markets. A nationwide rollout of delivery is expected for early 2020. Now it will need to start adding more ghost kitchen-like locations to help supply the demand of all those lattes in transit.

Lavu and Omnivore Partner to Simplify Third-Party Restaurant Delivery
Point of sale (POS) system Lavu has teamed up with Omnivore to better connect restaurants with third-party technologies up and down the restaurant stack, from back-of-house inventory management to third-party delivery services. According to a press release sent to The Spoon, restaurants using the Lavu POS system will be able to access Omnivore’s marketplace of third-party restaurant technology apps, which includes everything from Uber Eats to Yumpingo to OpenTable. With many restaurants these days lagging in terms of meeting customer demand for technology, Lavu’s POS capabilities with Omnivore’s more than 200 integrations definitely makes access to tech easer.

McDonald’s Franchisee Eliminates 200 Tons of Plastic Waste
To help combat the terrifying problem of single-use plastics in which we now find ourselves, Arcos Dorados, the world’s largest McDonald’s franchisee, announced this week it has eliminated about 200 tons of single-use plastics since removing straws from its beverages. Arcos Dorados, which operates 2,200 McDonald’s locations across Latin America, says the effort is part of McDonald’s ongoing contributions to the UN’s Sustainable Development Goals. The company plans by 2025 to make all McDonald’s packaging from renewable, recycled, or certified sources. Whether that material will actually get recycled is a question for another Friday.

AI, Voice Tech, and a $4B Delivery Business Are Turning McDonald’s Into a Tech Company

Traffic may have been sluggish and continued growth a challenge during the last few months, but, McDonald’s shows no signs of slowing when it comes to technology initiatives. On the company’s Q3 earnings call this week, CEO Steve Easterbrook emphasized McDonald’s existing achievements as well as future ambitions for digital initiatives like delivery, the drive-thru, self-order kiosks, and mobile ordering.

Delivery remains the centerpiece of McDonald’s digital growth strategy — and its biggest driver. Easterbrook said on the call that the company expects delivery to drive $4 billion of global systemwide sales — up from $1 billion just three years ago.

On average globally, customers place 10 delivery orders per second, and Easterbrook, and McDonald’s saw an increase in those orders when it added DoorDash as a delivery partner in July, ending its longstanding exclusive deal with Uber Eats.

On this week’s earnings call, McDonald’s also highlighted its efforts in the drive-thru lane, where the chain has been deploying its Dynamic Yield technology that uses machine learning to personalize suggestions for customers based on data like weather, time of day, and popular menu items. McDonald’s acquired the tech in March of this year. Dynamic Yield is now installed at more than 9,500 McDonald’s drive-thrus in the U.S., with deployment plans for nearly every U.S. location with an outdoor digital menu board “expected by year-end,” Easterbrook said. The company will also roll out Dynamic Yield across all of Australia by 2020 and is currently evaluating future locations as well as the role of the technology in things like self-order kiosks and the McDonald’s mobile app. “Ultimately Dynamic Yield will facilitate a range of personalization benefits where we can leverage knowledge of the customer and order patterns to provide a tailored experience in restaurants at the drive-thru and on our app,” Easterbrook said.

Also fueling this drive towards more personalization for customers is Apprente, the Silicon Valley-based voice-ordering tech startup McDonald’s acquired in September of this year. Easterbrook said on the call he expects the technology to reduce complexity for McDonald’s workers — a known factor is longer wait times at the drive-thru nowadays. “Apprente talent and technology comes with the promise of more efficient and accurate ordering at the drive-thru, and a better experience for our customers.”

For the drive-thru, especially, efficiency remains an ongoing challenge. According to recent numbers, drive-thru wait times have significantly lengthened over time thanks to more complex menus as well as restaurants trying to accommodate the rising number of mobile orders their employees juggle in addition on those made onsite. Multiple QSRs are using different methods to combat this slowdown, from Chipotle’s “Chipotlans,” which are dedicated drive-thrus for mobile orders, to KFC’s drive-thru of the future, which is primarily designed to serve mobile orders.

While these efforts and others tackle some aspects of the drive-thru lag, they currently lack one of the key elements to the future of the drive-thru: using AI to predict both customer preferences and future demand, so that restaurants can be better prepared. Thanks to its efforts around Dynamic Yield and Apprente, McDonald’s still leads the QSR industry on that score — though others are bound to follow, and no doubt soon.

Wendy’s Ramps Up Its Digital Order and Delivery Strategy

Wendy’s is intensifying its efforts around digital order and delivery, announcing at an Investor Day call last Friday that it is aiming to make digital sales 10 percent of all orders by 2024. Right now, digital sales account for 2 percent of orders.

Earlier this year, the Dublin, OH-based chain said it was investing an incremental $25 million into building “a stronger foundation” across its digital platforms. So far, that move to play catch up to its competitors appears to be paying off. At Investor Day this past Friday, Wendy’s Chief Digital Experience Officer Laura Titas noted in a presentation that check sizes are now 20 percent larger with mobile orders. For delivery specifically, the chain now sees check sizes 50 to 60 percent larger.

Titas’ presentation also suggested delivery will be key towards helping Wendy’s reach its 2024 goal for digital sales. To that end, she outlined multiple initiatives around improving the delivery experience.

For starters, it’s adding more delivery services. Wendy’s has partnered with DoorDash since 2017. Next year, the chain will expand its reach with third-party delivery to include Uber Eats and Grubhub, too.

And as is the case with many chain restaurants, QSR or otherwise, Wendy’s isn’t focusing its delivery strategy solely on those third-party partnerships. Instead, it will also launch what Titas called “in-app delivery,” where, thanks to a POS integration, Wendy’s can also process orders directly through its own app. While she didn’t give too many details, Titas said she expects this direct integration to knock three to five minutes off the delivery process. Meanwhile, the arrangement will also allow Wendy’s to track customer data more precisely.

Geolocation capabilities, to improve delivery and help ensure that customers are ordering from the right (i.e., the closest) Wendy’s, voice-order via Google Assistant, and a long-needed loyalty program were all announced at the Investor Day event as well.

Wendy’s certainly has its work cut out when it comes to evolving into a tech-forward restaurant company. Between Burger King’s many publicity stunts to drive mobile orders and McDonald’s turning itself into a tech company, competition is only growing fiercer when it comes to retaining customer loyalty. But with 60 percent of all restaurant orders now off-premises, there’s also a lot of room for growth and new audiences to grasp for those who can make their reach wide enough.

The Week in Restaurant Tech: It Was Mostly About McDonald’s

McDonald’s grabbed multiple headlines this week, and honestly if the chain keeps adding tech-forward initiatives at its current hell-bent pace, I’m gonna have to rename this column “The Week in McDonald’s Tech.”

As we covered earlier in the week, the company broke its longstanding silence on plant-based burgers by announcing the soon-to-launch P.L.T. (“plant,” “lettuce,” “tomato”) sandwich for menus in Canada.

But the possibly ill-named patty wasn’t the only bit of news to come out of the mega-chain’s headquarters. Lately McDonald’s seems to be taking a page from Domino’s playbook; which is to say, the chain is fast becoming as known for its tech initiatives as it is for its burgers.

Image via McDonald’s.

“Alexa, Get Me a McDonald’s Job” Is Now a Thing
This week, McDonald’s also announced it is working with Alexa to let potential new hires apply through a voice-initiated application process. Dubbed “McDonald’s Apply Thru,” the skill works on both Alexa- and Google Assistant-enabled devices. Users can simply say, “Alexa, help get me a job at McDonald’s” (or the Google equivalent of that statement) and answer a few basic questions via voice before getting sent a link to complete the application process.

It’s a neat trick . . . I guess. But you have to wonder if bolting voice capability to the front of the application procedure will actually make getting a job at McDonald’s faster and easier, or if it’s just tech for the sake of tech. Obviously it’s early days for these kinds of voice-activated initiatives. It’s not, as Restaurant Dive pointed out, a totally seamless process yet. McDonald’s will need to refine it if it wants to make the voice-enabled application process a long-term facet of its hiring process.

More Tension With McDonald’s Franchisees
But not everyone in McDonaldsland is thrilled about tech for the sake of tech, or the pace at which McDonald’s is aiming to overhaul its locations, of which there are more than 37,000 worldwide. This week, a Bloomberg article delved partly into some of the concerns and frustrations franchises face as its McBoss continues to mandate various tech initiatives.

You should read the full article, which is a fascinating look at how CEO Steve Easterbrook turned the company’s lagging sales around with tech. But franchisees are balking at the expectations around revamping their stores for this “Experience of the Future.” As Bloomberg noted, “They object to the enormous costs of the project, which, for owners of several locations, can run into tens of millions of dollars, even with McDonald’s offering to subsidize 55 percent of the capital for the remodels.”

This is not a new story. Friction between HQ and franchisees has been steadily growing for a while now. And with AI in drive-thrus and voice-recognition now part of the McDonald’s tech tool box, in all likelihood, the McSaga will get more intense in the coming months.

DoorDash Data Breach
DoorDash said in a blog post on Thursday that 4.9 million customers, merchants, and drivers had their information stolen by hackers. That includes names, email addresses, delivery addresses, passwords and, for some, the last four digits of their credit cards. DoorDash pointed out, in bold-faced type, that full payment info was not accessed and that “the information accessed is not sufficient to make fraudulent charges on your payment card.” The breach happened all the way back on May 4, 2019. DoorDash said customers, merchants and Dashers who joined after April 5, 2018 are not affected.

New Deals in Third-Party Delivery
Not that a hack enough to slow down the growth of restaurant delivery via third parties. This week, a few more chains announced deals with various delivery services. Postmates added two new partners, O’Charley’s and restaurant company Kahala Brands, who owns chains like Pinkberry and Blimpie. Meanwhile, Sweetgreen struck an exclusive deal with Uber Eats. That’s a win for the latter, who took a bit of a blow earlier this year when its exclusive contract ended with, yup, you guessed it, McDonald’s.

If you’re still reading and want to learn more about restaurant tech, join us in Seattle on Oct 7–8 for The Spoon’s annual Smart Kitchen Summit. Grab tickets here.