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The Spoon

Daily news and analysis about the food tech revolution

mobile ordering

Snackpass Raises $21M Series A Round for Its Order-Ahead Food App for Students

Order-ahead food app Snackpass has raised $21 million in Series A funding in a round led by Andreessen Horowitz with participation from First Round, General Catalyst, YCombinator and Inspired Capital. The round brings total funding for Snackpass to $23.7 million.

Snackpass was founded in 2017 at Yale University. Though the company has since relocated headquarters to San Francisco, its focus, for now, remains on college campuses. The app is currently available at 11 schools around the U.S., and Snackpass said in a press release it will use the new funding to expand to 100 campuses over the next two years.

With the app, Snackpass users can order and pay for food then pick it up at the restaurant. (There is no delivery functionality at present.) Where the company sets itself somewhat apart from the food app pack is with its social features and loyalty program. Users earn loyalty points that can be redeemed for free food, either for themselves or friends. The latter highlights the social aspect that’s a major centerpiece of Snackpass’s strategy. Built into the app is a Venmo-like feed where each purchase a user makes shows up and where people can communicate with one another, get restaurant recommendations, and send gifts (i.e., free food).  

This emphasis on creating a community within the app is one of the reasons Snackpass has been able to maintain something other food delivery apps struggle with: a loyal user base. Third-party delivery may be on track to have 44 million U.S. users in 2020, but most of those people hop between apps, more interested in finding the best deals on food than claiming allegiance to, say, DoorDash versus Uber Eats. 

A loyalty program, which is different from subscription models many of the big-name food delivery apps offer, is also key to keeping Snackpass users coming back. The company claims a 75 percent penetration rate among students within six months of being on a college campus. The service can also sync with students’ campus meal plans.

Right now, college campuses are fertile grounds for testing new approaches to food delivery. Though unique, Snackpass is hardly the only app out there catering to students. Earlier this year, food delivery app Good Uncle was acquired by Aramark, a longtime food services provider for colleges and universities. In 2018, Grubhub acquired Tapingo, an order-ahead app for college students that’s at 150-plus schools.

Those are only a couple names in the pack. DoorDash, Allset, and others are also making their way to schools in the U.S., and the competition for college students will intensify as we head into 2020. The new funds, as well as having a name like Andreessen Horowitz in their court, will hopefully give Snackpass enough financial and operational muscle to stay in the center of that competition.  

Chipotle Unveils a New Restaurant Design to Support Delivery, Digital Ordering

Chipotle today announced it is testing a design prototype for its stores aimed at further growing the chain’s billion-dollar digital business.

According to a Chipotle press release, the new digital-centric store design will be trialed in the following different Chipotle store formats: an urban storefront, a standalone restaurant with a Chipotlane, and an endcap restaurant with a Chipotlane. So far, the chain has stores in Chicago, IL, Cincinnati, OH, and Phoenix, AZ set to test the new design. It will also retrofit two existing stores in California.

“By better suiting our restaurants to accommodate the digital business, we’re able to finalize orders more effectively and provide a better overall experience for our guests,” Curt Garner, Chief Technology Officer, said in a statement.

The new store model will integrate longtime pieces of existing layouts, such as an open views of make-lines in the kitchen, with more recent changes the chain has made to accommodate the uptick in digital and delivery orders. That includes dedicated pickup shelves for digital orders, second make-lines meant to fulfill meals for delivery, and more Chipotlanes. 

In case you hadn’t guessed, Chipotlanes are a big part of that strategy. Unlike traditional drive-thru operations, those of Chipotle are designed specifically for digital orders. You cannot simply drive up to a menu board and order on the spot from a Chipotlane. Instead, customers order ahead via mobile and only use the window to pick up their food. Third-party delivery drivers can use this feature as well, saving themselves the trouble of having to walk into the store and locate their order. 

On Chipotle’s Q3 earnings call this past October, CEO Brian Niccol said the chain expects a total of 60 Chipotlanes by the end of 2019, though some of these new openings may shift into Q1 of 2020. Additionally, of the 150 to 165 new restaurants Chipotle plans to open in 2020, about half will include a Chipotlane. 

Whether by drive-thru, pickup shelves, or some other method, restaurant chains giving their stores makeovers for the digital-ordering era is a major strategy right now. Just yesterday, we wrote that Shake Shack is opening a new NYC location that will emphasize digital ordering and delivery. Starbucks, Krispy Kreme, and a boatload of others have already made similar moves.

As to how widespread Chipotle’s new design prototype will expand, the chain said in the press release it will asses the performance of each of the four new locations before deciding when and where to roll the concepts out nationally. 

You Can Now Order From Your Table When You Eat at Chick-Fil-A

With the chicken sandwich wars now behind them, Chick-Fil-A is free to focus on other things, like letting its in-store diners order meals from their table instead of standing in line. The fast food chain today announced that it is launching “dine-in mobile ordering” as an option for its customers.

Now available at participating locations nationwide, the new dine-in ordering works like this: Customers use the Chick-Fil-A mobile app to place a “dine in” order while at the restaurant. They then tap their phone on the table number, which uses Near Field Communication (NFC) to direct the order so a Chick-Fil-A employee brings the meal to the correct table.

It’s easy to see why this is appealing to both consumers and Chick-Fil-A. For customers, they can avoid standing in line and customize their order without any back and forth with a cashier. For the restaurant, it gets its money faster (because no standing in line), helps prevent customers leaving if lines are too long, and creates faster turnover for tables to seat more customers.

For those old enough to remember, this is like the modern, wireless version of what A&W Root Beer restaurants use offer. Only back then there was a hardwired handset built into the table that you would pick and speak into to place your order.

This feature is also just the natural evolution of mobile-powered delivery everywhere trend we are seeing. From parks to stadiums to state rooms on cruise lines, to inside the restaurant itself, everyone is angling to let you skip long lines and get your grub faster.

Veterans of the chicken sandwich war will now most likely be fighting the mobile ordering war.

Order-Ahead Food App Ritual Expands to Europe, Hong Kong

Toronto, Canada-based mobile app Ritual, which lets users order ahead for restaurant pickup food, announced this week it is expanding service to Germany, The Netherlands, and Hong Kong.

The new markets are just the latest in what’s been a steady expansion for the company ever since it started rolling out service to the U.S. in 2017. In January, the company expanded to the UK and Australia, and said it expected to triple its restaurant count by the end of 2019.

Like many restaurant-focused mobile apps, Ritual lets users browse participating restaurants, order ahead, leave special instructions (no pickles please!), and pay within the app. On top of those fairly standard offerings, it has a few features that help it stand out from the crowd.

For one, it’s geared towards the lunchtime office crowd in a big way, thanks to a social feature baked into the app called Piggyback. Workers in the same office or location can gather within the app and decide on a restaurant. They can then choose when to order food, place their orders, and designate a person to go and pick the meal up. The app stores past orders, making it easy for teams to reorder entire meals. So if Fried Chicken Friday is a thing for your team and you want to spend less time collecting everyone’s orders, Ritual’s the app for that.

Ritual is also a way for smaller and/or independent restaurants to test off-premises ordering. The app’s pickup-only focus makes it cheaper for restaurants to participate (no drivers to pay), so they can easily gauge how much their customers want off-premises orders and which meals work best in a to-go environment.

So far Ritual has raised a total of $112.9 million, its last round being a $70 million Series C in June 2018. According to the press release, the service is now available in over 50 cities, including its new markets. The addition of Germany, Hong Kong, and The Netherlands also marks the start of the company’s goal to expand to a greater number of non-English-speaking markets in future.

Its push to European countries comes at a time when the food delivery and pickup market on that continent is seeing some serious competition. In July of this year, third-party aggregators Just Eat and Takeaway.com merged to form one of the largest restaurant-delivery services in the world. Both already had a significant presence in Europe prior to the merger. In the same month, Just Eat also acquired UK-based corporate catering marketplace City Pantry, a service that also appeals to the office crowd. And amid much competition, Deliveroo pulled out of Germany in August.

As I mentioned above, though, the simplicity of Ritual’s app could make it appealing to restaurants that can’t or don’t want to fork over fees associated with some of those other apps. The big question around Ritual’s expansion, which is yet to be answered in these new markets, is if a pickup-only app is enough to compete in today’s delivery-crazed food world.

What the New McDonald’s Flagship Tells Us About the Fast Food Giant’s Future

One of the most famous McDonald’s locations in the world just got a major makeover, inside and out.

The former Rock N Roll McDonald’s reopened last week as a new flagship store, and “redesign” is an understatement. The fast food giant unveiled a 19,000-square-foot structure and a business strategy that are all about two things: staying eco-friendly and improving the guest experience through digital.

So yes, that means there’s a lot of tech involved in this new iteration of an old fast food standard. Dubbed an “Experience of the Future” restaurant, the Chicago location incorporates all McDonald’s latest tech initiatives.

Self-order kiosks — which McDonald’s now plans to install in 1,000 stores each quarter — are front and center. Customers can browse, order, and customize food items, which a McDonald’s employee brings the food directly to the table. It’s a setup company CEO Steve Easterbrook calls “repurposing labor,” and it reportedly is creating more jobs, rather than leaving people unemployed. For those who prefer ordering the old-fashioned way, there are still four cashiers, and yes, they still take cash.

Kiosks are now in about 5,000 McDonald’s restaurants across the U.S. Adding 1,000 per quarter is part of the company’s plan to have kiosks in nearly all freestanding restaurants by 2020.

Better accommodating mobile is another key part of McDonald’s self reinvention. While there are fewer parking spaces in general (it is Chicago, after all), the new flagship has dedicated spaces for those doing curbside pickup via their mobile app. There will also be space to serve more Uber Eats drivers efficiently — another crucial part of McDonald’s rebranding strategy.

But plenty of chains are revamping their business strategies to focus on mobile and kiosks. What sets McDonald’s apart just a little bit more is the actual location. The Chicago flagship building is a massive steel, wood, and glass structure with 27-foot windows, an enclosed arboretum with birds, and over 70 trees on the ground level. It’s basically an Apple store with Big Macs. The location also has a solar pergola with 1,062 panels that can power about 60 percent of the restaurant.

None of these changes are specific to the Chicago location, though; they’re part of a $6 billion effort to “modernize most U.S. restaurants by 2020.”

In some cases, that word “modernize” could be be a BS term drummed up by a marketing department. The reason I believe McDonald’s is that this redesign — the current one as well as future stores — addresses multiple hot-button issues at once: digital ordering may be convenient, but it produces more waste and emissions, even when drivers are third parties or paying customers. That’s where those solar panels come in, as McDonald’s can use them to collect renewable energy and offset some of its non-renewable energy consumption onsite. (The Chicago restaurant is also in the process of becoming LEED certified.) Meanwhile, the addition of table service and Easterbrook’s “repurposing of labor” suggest that our fears of robots taking over might be overly pessimistic. For now, at least, automated services will just become another fixture in the restaurant.

But there’s one thing I can’t shake: at the end of the day, McDonald’s is still serving fast food, which, to name another hotly debated item, conflicts with increasing consumer desire to eat whole, health(ier) foods. Foliage and solar panels are great, but they don’t curb obesity, diabetes, or heart disease. McDonald’s is doing some work in this area. Burgers are now “100% fresh beef” that’s cooked to order. They also unveiled an initiative this year to make the Happy Meal a healthier option.

I’m going to risk oversimplifying the matter here by saying McDonald’s could do more to accelerate its these efforts. Offer more more fruits and veggies as side options. Deter excessive soda drinking by charging for refills. Serve plant-based burgers instead of triple cheeseburgers.

Granted, too many health-conscious options and it wouldn’t really be McDonald’s as we know it. Oddly enough, the mega chain could use that to its advantage. They more or less invented fast food as we know it. Why not modernize the notion of it while they’re reinventing the business?

Coffee Bean Launches Mobile Program With Uber Integration

Not to be outdone by Dunkin Donut’s next generation store that emphasizes mobile ordering, L.A.’s favorite coffee chain, Coffee Bean & Tea Leaf, just announced mobile ordering for select company-owned locations.

Like other mobile programs, Coffee Bean’s pay ahead ordering allows mobile customers to skip the line for their drink. Those who use the feature will earn extra Rewards points and have access to special discounts. As of today, the feature is available in 191 company-owned store locations around Southern California and Arizona. Coffee Bean plans to make the feature available to franchises and “new geographic areas” in the coming year.

One added bonus: the app is integrated with Uber. That means you can use the Coffee Bean Rewards app to both pay for your drink and order a ride to your preferred store location.

Taco Bell did a similar program with Lyft last year, allowing customers to make a detour to the nearest Taco Bell drive thru en route to their destination. The move was a complete disaster; many drivers were upset at being forced to sit in long drive-thru lines during peak traffic hours, for no additional compensation. Lyft eventually had to clarify that Taco Mode, as the program was dubbed, was optional for drivers.

Uber already has a rocky history in terms of its relationship to drivers. If drivers start tweeting about spilled lattes ruining their cars and long drive-thru lines, we may have another Taco Mode on our hands. Then again, coffee and fast-food burritos tend to serve different markets. At the risk of generalizing, bad smells and messy spills seem much more likely with a late-night crowd that wants fast food en route to the club, rather than someone on their way to a meeting who needs a caffeine jolt. So Uber may fare a little better with this deal.

Nation’s Restaurant News noted that mobile payments for restaurants have jumped 50 percent over the last year. So while it seems a bit late in the game for Coffee Bean to be joining the mobile ordering movement, it’s still an opportune time to do so. Plus, Coffee Bean customers tend to be fiercely loyal, which bodes well for the company, at least for this initial rollout.