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Daily news and analysis about the food tech revolution

off-premises orders

Report: Restaurant Transactions are Inching Towards Improvement for Major Chains

Restaurant transactions are improving — for some. Today, the NPD Group said customer transactions at major U.S. restaurant chains saw a slight uptick for the week ending May 31. Transactions at these chains declined by 18 percent compared to the same period one year ago. That’s a 3 percent week-over-week improvement.  

NPD has been providing regular updates on restaurant transactions for a number of weeks now as dining rooms slowly reopen and the restaurant industry as a whole continues to grapple with the unprecedented disruptions caused by the COVID-19 pandemic. 

Other notable numbers from this latest report include:

  • Restaurants in states where dining rooms are still closed had the steepest declines [—DECLINES OF WHAT?—]. For New York and California, that was negative 34 and negative 27 percent, respectively. 
  • By contrast, transactions in Kentucky, which was allowed to reopen on May 11, saw a 2 percent decline.
  • Full-service restaurant chains saw a negative 37 percent decline, which is a 15 percent increase from the prior week.
  • QSR chains saw a 16 percent decline in transactions versus 18 percent in the previous week.

David Portalatin, NPD food industry advisor noted in the release that the foodservice industry is “solidly in the re-start phase,” and that it will only be in a true recovery phase when all states reopen their dining rooms. Only then can we start to make “a detailed assessment of how many permanent restaurant closures there are and how that will affect what the industry will look like as it re-emerges.”

At least 3 percent of restaurants have already permanently shuttered due to the pandemic. Many of those have been independent restaurants, though some chains have also had to shut down locations.

And while we may not know exactly what the future restaurant industry looks like, one thing we can count on is more off-premises orders. Pretty much everyone, from family sit-down chains to fine-dining restaurants, are encouraged to continue offering to-go options to customers. Some chains are even launching to-go-focused concepts, while others are turning to the ghost kitchen concept to fulfill more delivery orders.

How big a role off-premises will play remains to be seen, and we likely won’t have a clear idea of that until more states reopen dining rooms. For now, delivery, ghost kitchens, virtual restaurant concepts, and other off-premises strategies have yet to prove themselves as real lifelines for businesses.  

In Through the Outdoors? Restaurants Hit the Pavement as They Reopen

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Not so long ago, outdoor space at a restaurant was just a nice-to-have feature some restaurants could afford to offer. Surprise surprise (not), the pandemic is changing that. With new guidelines and requirements around safety and social distancing, more restaurant experiences are moving outdoors. And it’s not just for dine-in customers, either.

This week, San Francisco Mayor London Breed announced the Shared Spaces Program, which in part allows restaurants to use public space like sidewalks, whole or partial streets, and parks to fulfill restaurant pickup orders. Restaurants can apply for a permit for free, and once the city approves dine-in service for outdoor space, those areas can be used to seat customers as well.

San Francisco isn’t alone. San Jose this month approved its “al fresco plan” that will allow restaurants to use some public spaces to fulfill takeout orders and eventually hold more seating. In Rotterdam, The Netherlands, restaurants will be allowed to convert parking spaces in front of their buildings to do the same.

While these measures could help restaurants eventually boost dine-in traffic once they reopen, at present, they may actually help restaurants run smoother to-go operations. Trying to run an ad hoc takeout business is challenging for many restaurants that have previously only operated under a dine-in model. In some cases, selling to-go orders has caused outright mayhem as crowds of people gather to wait for their to-go orders and staff dart around trying to determine which meal belongs to which angry customer.

Make no mistake: there will be operational challenges using public spaces, too. In fact if it’s not managed correctly, the whole thing could become its own social-distancing disaster. Viewed through a more optimistic lens, it could provide more space for customers and delivery drivers waiting to retrieve their orders. 

And you know what would really enhance the public spaces restaurant experience? Some technology. Earlier this week, I spoke with two companies, hardware manufacturer Elo and software startup Clicksys, about a new self-service kiosk they’re trialing at a restaurant in Stockholm, Sweden. 

In summary, the idea is to have a kiosk installed into the front wall or window of a restaurant, much like a bank ATM, so that folks passing on the street can simply stroll up, order, pay, and wait for their food without having to actually enter the restaurant.

There are a lot of good use cases for this idea, and these newfound public spaces are one of them. If we’re talking about relieving operational mayhem, an automated system would cut down on the amount of people milling around in said public space. Staff would not need to man an order station, since the kiosk processes ordering and payments. And since the system texts users when their meal is ready, those customers would be able to better time their entrance and exit and not have to stand around playing the waiting game.  

The Elo-Clicksys machine is currently only available in Europe, but there are plenty of restaurant tech companies in the U.S. that should take note of this concept. Right now, front-of-house technology is having to truly prove its worth in a world without dining rooms. Self-service kiosks (with hand sanitizer next to them, please) built for the outdoor world could prove lucrative in the coming months. 

Off-Premises Sales Are Back Up

Another reason the forthcoming Shared Spaces could get a lot of use this summer: sentiment around off-premises orders is back up. Nation’s Restaurant News reports that after taking a big dip at the beginning of May, when many restaurants began to reopen dining rooms, sales of takeout orders are back up.

Restaurant analytics firm Black Box Intelligence, which provided the source material for NRN’s post, said that early in May, customers complained of long wait times for curbside pickup orders but that “guest sentiment trends have started to recover as of week-ended May 24, with off-premise sentiment returning to similar levels as were seen in April.”

Presumably, people got excited about going back to restaurants instead of ordering takeout, then realized what a pain in the a$$ dine-in service is going to be for a long time to come. Guidelines vary from state to state in the U.S., but almost all of them include reduced capacity, reduced party sizes, no buffets, and in some cases a mask requirement. Add to that the trepidation most of us wear with our masks these days anytime we set foot in public, and it’s not exactly a recipe for a packed house.

While Black Box didn’t cite the specific reason for the uptick in off-premises orders this month, my guess is that folks are still more comfortable waiting for a to-go box than eating at a sparsely populated dining room fraught with anxiety. 

DoorDash Launches an E-commerce Platform for Indie Restaurants

Ever looking to capitalize on this boost in off-premises orders, DoorDash this week announced a new e-commerce platform for independent restaurants. It’s called the DoorDash Storefront, and it’s supposed to offer restaurants a way to build out their own digital storefronts through which they can process orders and payments. Restaurant sign up with the platform and get their own website/app for takeout and delivery orders — powered, of course, by DoorDash’s system. The digital storefront also plugs into DoorDash’s fulfillment network of drivers, so the food can actually get delivered.

DoorDash is actually addressing a need here. Sophisticated mobile apps that process orders, payments, and loyalty points are expensive and complicated to build. Small restaurants and restaurant chains generally can’t afford them, which is a negative in a restaurant industry that was just forced to go almost entirely off-premises. DoorDash said in a press release that about 40 percent of its restaurant customers do not have their own e-commerce platform.

What isn’t mentioned is what the storefronts will cost the restaurants. In bold-faced text, the company’s blog post stated that restaurants “control and own the customer experience.” It does not say customers own the data — a major issue with using a third-party delivery platform — nor does it go into exactly how the restaurant owns the customer experience. However, it’s worth noting that the blog post also states that restaurants “do not pay a commission to DoorDash on orders they receive through their Storefront.” 

DoorDash has actually been less awful to restaurants than its third-party competitors during the pandemic. The company waived commission fees for a time independent restaurants when the dining room shutdowns first took place. Still, commission fees are coming back, and offering restaurants their own digital storefronts means those restaurants will be firmly locked into the DoorDash ecosystem when it’s time to pay up.

All of which is to say, read the company’s seemingly altruistic blog post with a magnifying glass in one hand and a dose of healthy skepticism in the other.   

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‘This Is No Time for Champagne and Caviar.’ One Restaurant Owner on How to Reinvent Fine Dining

The understatement of the year is that independent restaurants are going to have a hard time surviving this pandemic. For those that aren’t already closed, the threat of having to do so looms large.

Irena Stein, owner of Alma Cocina Latina in Baltimore, Maryland, isn’t afraid to face that fact. “What are the chances for us to survive truly? Very little,” she said over the phone recently. 

Like any other full-service restaurant, Alma Cocina Latina was forced to close its doors when the pandemic went full swing in the U.S. But instead of completely shuttering the place, as others have done, Stein has transitioned her fine-dining establishment into a hub for two brand-new areas. “Instead of thinking we’re going to close forever, which is a possibility, we’re asking, ‘How can I transform myself into something else?’” Stein said on the phone. The answer, for now, seems to be half-restaurant for takeout orders, half relief kitchen for those in need. 

Alma Concina Latina has been around for five years now. Prior to the pandemic, the Venezuelan restaurant was better known for serving up squash tartare and high-end arepas than it was for filling to-go boxes. In fact, the restaurant has never, up to now, even considered doing off-premises orders. 

“One of the most important experiences for us to share with our guest is the whole experience,” Stein said, adding that Alma Cocina Latina “is a place that is full of education, it’s a very warm environment, very beautiful, accents of museum-type pieces. So for us, coming into our place is coming into our culture.”

Which, obviously, is impossible to replicate in a plastic to-go container.

But like everyone else, state-mandated dining room closures have forced the restaurant to offer some kind of to-go menu, though in it’s not just a case of offering the existing menu in a box. “From a very very beautiful menu we decided to do a few items from appetizers and the arepa bar.” Since arepas are best eaten immediately after cooking, those that live farther away can order theirs half-baked, then follow instructions on the Alma site for finishing them at home.

Takeout is available Thursday through Sunday from 5 p.m. to 7.30 p.m. Users can call the restaurant to place an order or buy items online directly through the Alma site. 

Offering takeout has given some of the Alma staff work to do, but as is the case with many other restaurants, going takeout-only has meant there’s less need for a full staff. Rather than furlough or fire them, Stein and her team started a relief kitchen. 

That’s meant partnering with an organization called Mera Kitchen Collective, which provides a place for refugee chefs to cook. Since Mera was mostly a catering organization before the pandemic, it needed new business, and the two entities teamed up to provide meals to the Baltimore community. Not long after, José Andrés’ World Central Kitchen rang up and offered to sponsor the food they were giving away. Stein told me that as of now, Alma and Mera’s combined efforts, along with the sponsorship, allow them to give away about 450 meals per day. Recipients are individuals with limited access to food who would, under any other circumstance, never have a chance at tasting Alma’s food. 

She noted that Baltimore has a lot of food deserts, and that down the line, she would like to do more work in the area of food justice, such as buying excess food from farmers and redistributing it around the community. 

“I would like to transform part of Alama’s future activities into [helping] food professionals that support different food policies, and then provide the food, really really good food to them,” she said.

As for the restaurant itself, Stein says it will keep doing takeout for now, while they are still in survival mode. She is quick to add, however, that she wants no part in a future that is only takeout. Hence, looking for ways Alma can reinvent the kind of food business it is.

The pandemic has been especially hard on full-service restaurants, and even tougher on fine-dining ones, that, like Alma, have never had a need for any strategy other than dine-in service. But with reduced capacity mandates, stricter guidelines, and decimated savings accounts, the recent reopenings have made abundantly clear that the fine dining industry isnt’ going to boune back from the pandemic full force anytime soon. Possibly never.

“We were a restaurant and we were a beautiful restaurant. That past isn’t coming back anytime soon. Why not think in reimagining the future?”

Stein has taken that as her cue to rethink the point of her business — what full-service restaurants are and, more importantly, what they can do for the larger community. No, that attitude doesn’t lead to immediate profits, or even survival, but it hints at yet-another avenue restaurants can take to let the world know they are out there and still serving up good food.

Or as Stein says, “This is no time for champagne and caviar. Food is food, so let’s work with that.”

Panera Launches Geofence-Enabled Curbside Pickup

Even as dining rooms slowly reopen, many chains and restaurants are emphasizing curbside pickup when it comes to how customers can get their food. Case in point: today, sandwich/bakery chain Panera announced a new curbside pickup service that, among other things, offers some technological bells and whistles meant to speed up the process.

The Panera Curbside process includes steps you’ll find in many curbside operations these days. Customers order via the Panera app and select Panera Curbside as their delivery option, then include their vehicle’s make, model, and color in the Special Instructions field. For those that prefer it, there’s a standard “I’m here” button they can tap upon arrival. But Panera has also introduced geofencing technology to its curbside process that will immediately notify the restaurant when a guest has arrived, rather than that customer having to find and click a button. Customers, of course, need to be comfortable with getting recognized by a technology system, and so the service is opt in at the moment. 

According to today’s press release, part of the reason Panera is launching curbside pickup is to alleviate some of the congestion that’s been happening in drive-thru lines lately. Drive-thrus have needed an overhaul for some time, as wait times have increased considerably over the last decade. The pandemic just made everything worse. Allowing customers to order ahead or simply pull into a parking space and order directly from their phones could trim down those drive-thru lines.

Over the long term, curbside pickup could and most likely will be a mainstay in terms of ordering options for customers. It wouldn’t be surprising if, at some point soon, companies begin to integrate other technologies, like AI-enabled license plate recognition, into the process.

Curbside is also an obvious substitution for pickup orders, where a customer walks into the restaurant and collects the meal themselves. Though dining rooms (along with everything else) are reopening, many customers will be wary for some time to come about spending too much time in a restaurant, even one with reduced capacity. 

And while curbside will be an important technology to restaurants going forward, it has to actually deliver on its promise of saving time and operational stress in order to be worthwhile to restaurants. A geofence-enhanced app that tells restaurants when a customer has arrived sounds helpful. The test will be whether those notifications help staff or just further overwhelm them, as has been the case at some restaurants.

For its part, Panera already had a robust digital and off-premises strategy at work before the pandemic, which means its back-of-house operations are probably equipped to easily ingest a new technology and ordering option.

Hi Neighbor Turns a Shuttered Restaurant Into a Ghost Kitchen for Furloughed Chefs

San Francisco-based restaurant group Hi Neighbor is combating the current pandemic and simultaneous restaurant industry meltdown by launching a mix of virtual restaurant concepts via its new incubator program. The Hi Neighbor Incubator Series, first profiled by Eater SF, is letting furloughed chefs and bartenders start their own virtual concepts that can be ordered online by S.F. residents for pickup and delivery.

Hi Neighbor ran three restaurants before the pandemic: The Vault, Corridor, and Trestle. The group has kept all three closed during San Francisco’s shelter-in-place orders, which in turn has meant chefs of those restaurants have been furloughed. To get these employees back to work at a time when California dining rooms are still closed, Hi Neighbor partner Ryan Cole got the idea to let these chefs reinvent their existing restaurant concepts or create and launch new ones, only virtually. 

The current virtual restaurant lineup on the Hi Neighbor site includes three restaurants and one to-go cocktail concept. Korean-Californian concept JunJu and Uruguayan restaurant Ines are currently accepting orders for pickup or delivery via Caviar. Schmaltz Restaurant, which chef Beth Needelman calls “Jewish comfort food with a modern American twist” will start taking orders soon. To-go craft cocktails by AttaGirl Hospitality can be purchased with meals from any of the restaurant concepts. 

All orders are prepared in the kitchen of its restaurant Corridor, which remains closed as of now. Pick up orders can be retrieved at that location, and Hi Neighbor has even made gift cards available that are valid with any of the new restaurant concepts. 

Hi Neighbor has in effect turned itself into a kind of ghost kitchen provider, offering chefs fairly low-risk ways to test out new concepts and stay in business during the pandemic and shelter-in-place mandates. While the kitchen space and assistance setting up a virtual restaurant only extends to Hi Neighbor employees, this incubator is another example of how restaurants and restaurant groups are getting creative about doing business at a time when restaurant dining rooms remain closed.

The incubator is also notable because in normal times, Hi Neighbor’s restaurants are full-service affairs that don’t really lend themselves to off-premises formats. Full-service restaurants have taken the hardest hit in terms of lost sales as the result of sheltering in place. Asking existing chefs to either reinvent their menus or conceive entirely new ones designed for to-go orders could be a move more restaurant groups would benefit from in an uncertain time for the industry. 

Hi Neighbor plans to have incubator restaurants operate for at least the next three months, regardless of whether shelter-in-place mandates lift. It’s a wise move, considering reopened dining rooms will be operating at reduced capacity and many diners will probably remain wary of going out to eat for some time to come. 

Foodie Card Raises $1.5M for Its Subscription Service Supporting Both Restaurants and Food Banks

Dining subscription company Foodie Card announced today it has closed a $1.5 million seed round for its service that gives customers discounts on restaurant food while also donating to those in need. The round was led by Ruttenberg Gordon Investments with participation from Gary Vaynerchuk, Ryan Harwood of Gallery Media Group, Jamie Schweid of Schweid & Sons, Eric Sobotka of Durational Capital Management and Nat Brogadir of Delivery.com. 

Foodie Card began as a dine-in-only service in 2018. Members paid $29.99 for a year-long subscription and received an actual card in the mail, which they could then show a server or flash at the register during checkout and receive 10 percent off their meal. 

With dine-in service on hold for most states, though, Foodie Card has pivoted like much of the rest of the restaurant industry and now focuses on takeout orders. Customers can show their card at the register when picking up their food and get the same 10 percent off the bill they would with a sit-down experience. The majority of restaurants currently on the company’s roster, most of which are based in the New York, now accept the card for takeout orders.

Importantly, 5 percent of every subscription purchased goes towards providing meals from food banks to those in need. Foodie Card says it has donated more than 20,000 meals to date.

Foodie Card said in the press release it will use the new funds to hire staff, grow additional food banks, expand its network of restaurant parters, and build out its technology. That last point is especially worth noting because while Foodie Card is still a pretty no-frills service at the moment, it has a lot of potential in terms of what it could evolve into. Right now, customers use an actual card to get their discount; building a mobile app for users seems to be the logical next step for the company, given the shift towards contactless payments the restaurant industry is about to make. Foodie Card hasn’t yet said if it has any plans for integrating with delivery orders, though that would make sense at some point, too.

The company will also need to figure out how to accommodate orders that customers pay for digitally before they ever set foot in the restaurant. There’s likely about to be an uptick in companies offering mobile order-ahead solutions for independent restaurants; an integration with some of those platforms would make sense.

Foodie Card says it currently has over 10,000 members and nearly 1,000 participating restaurants. Most of those restaurants are small, independent businesses who need more takeout orders as the pandemic goes on and dining rooms remain closed.   

Starbucks Leans on Digital Orders and Modified Formats to Reopen 90% of Stores by June

Starbucks plans to reopen 90 percent of its U.S. stores by early June, the company said this week on its Q1 2020 earnings call. As expected, stores won’t immediately reopen nationwide and with the same sit-down cafe format in which they operated before the pandemic. Instead, the Seattle-based coffee giant will open gradually, with modified service that emphasizes pickup, delivery, and drive-thru. 

The company hinted at these plans a little less than two weeks ago, when company CEO Kevin Johnson sent a letter to employees explaining the chain’s recovery plan. As I wrote at the time, Starubucks is an international chain that is already navigating this recovery process in China, so it has some experience other U.S.-based chains may not. It is also ahead of the curve — a major leader, actually — in both off-premises formats and digital business. 

On this week’s call, Johnson spotlighted both of those things. He noted that “continued recovery in China strengthens our belief that these impacts [from COVID-19] are temporary” and that Starbucks expects to emerge with an even stronger business. “We are well positioned to leverage our digital assets and new operating formats like contactless pickup and curbside to expand service to customers,” he said.   

Only 30 stores will reopen their cafes, Starbucks COO Rosalind Brewer said during the call, and there will be no seating in those locations. “We will amplify delivery, we will have the Mobile Order & Pay channels open and then the addition of a new concept, the Entryway Handoff,” she said. Starbucks will monitor what happens in these stores before making the move to reopen other locations. 

For Starubucks, this slow reopening is less detrimental than it might be for a chain with a less robust off-premises strategy. Johnson noted on the call that 80 percent of customer occasions in U.S. stores were to-go before the pandemic even hit. “And so by augmenting the in-store experience with mobile ordering and contactless pickup, we can service significant volume of customers without having the cafe seating area actually opened,” he said. 

As states slowly begin to reopen their economies, bigger chains with similar store formats to Starbucks and existing digital strategies in place will likely operate with their own versions of this modified, to-go-centric format. Chipotle, which was already testing off-premises store formats pre-pandemic, has reported strong digital sales for the quarter. With more earnings calls set to happen over the next few days, we’ll get more intel into what other chains, such as McDonald’s, have in the works.

Smaller restaurants that can’t afford expensive mobile-order systems or accommodate drive-thru lanes can still look to some tech to help with the transition towards this new normal. While most independent businesses are more concerned with keeping the lights on right now, contactless customer service and digital payments will be two areas more restaurants will look to expand to in the coming months. 

Prioritizing Takeout is a Big Takeaway From Wahoo’s Fish Taco’s COVID-19 Response

As restaurants temporarily close dining rooms and many struggle to stay afloat, we’re starting to hear from specific businesses about their strategies for dealing with a world where “open for business” means being able to take and fulfill off-premises orders and no one is clear on when they’ll be able to once again open the dining room.  

One such business is Wahoo’s Fish Tacos. Wahoo’s is based in Southern California and currently operates about 60 restaurants across several U.S. states (as well as a location in Japan). The chain was founded by Chinese-Brazilian brothers Wing Lam and Ed and Mingo Lee back in 1988 as a way to bring their different cultures’ culinary traditions and styles together into a single restaurant.

Being around for 30-plus years means the brothers have seen their share of ups and downs in the restaurant industry, which so far is helping them better navigate the sudden and abrupt shift to off-premises business resulting from the spread of coronavirus. 

“We started delivery a week ago because we knew that was coming,” Ed Lee said of the mass restaurant closures that started last week.

During a phone call with me last week, he and Wing Lam explained that Wahoo’s has dealt with having to temporarily close before (after the 9/11 attacks), but that what we’re dealing with now is far more severe. “This is the first time we can’t get ahead of ourselves because everything continues to change,” says Lee.

That’s a polite way of stating the situation. The National Restaurant Association anticipates a $225 billion decline in restaurant sales over the next few months, and the loss of potentially millions of jobs. As mentioned above, entire states are mandating that restaurants close their dining rooms. Major chains are voluntarily shutting down all operations in certain parts of the world. And everything continues to shift so rapidly there’s no telling what the restaurant industry will look like in two days, let alone two weeks.

“Right now we’re looking ahead about two weeks at a time,” he told me. “Our number one goal right now is to make sure we take care of our customers and our employees.”

Wahoo’s is committed to offering delivery (“It is a battle that we’re stuck with,” says Lee). Another strategy that could be more financially beneficial to restaurants and workers is to emphasize takeout, where customers order ahead online then come to the store to collect their food.

The biggest challenge here is actually getting customers to understand the restaurant is still (for now) open for takeout orders. Whereas the vast majority of customers automatically associate quick-service restaurants like Wendy’s or even some fast-casual chains (think Chipotle) with to-go orders, there are many more restaurants in America people still think of as  sit-down establishments. But with 100 percent of orders now being off-premises ones, more has to be done to remind customers the takeout option exists.

Incentives for pickup orders are one way Wahoo’s is doing that. For example, customers who order a family-style meal for pickup and get free desserts as well as a gift card as a reward. There are deals on kids meals for those ordering food for pickup. Lee says the point of these incentives is to get customers to come back to the restaurant, both now and later.

Pickup orders also make more financial sense for the restaurant itself, because the commission fee owed to third-party services like Grubhub or DoorDash is much lower (there’s no driver to pay). Lee is quick to note that Wahoo’s doesn’t want to “get into a war with the delivery system.” That said, he adds that delivery “doesn’t make us a single dime.” Promoting takeout orders is a way around that. 

As an added benefit, it’s also a way for employees making the food to directly receive tips, something that doesn’t happen with delivery orders, where customers pay and tip online and the money only goes to the driver.

Questions around takeout as a business model remain. For now, it’s a viable way for restaurants to offer off-premises ordering and, unlike third-party delivery, connect directly with customers. That could change as the number of COVID-19 cases goes up and more restaurants close up entire operations. And unfortunately, it’s impossible to say right now if a state like California would implement mandatory closures for all restaurant operations, takeout included.    

Lee and Lam said they don’t anticipate seeing full restaurant openings until the end of May at earliest. Until they, they are trying to react to the ever-changing situation as best they can.”

“This is not going to be a tomorrow morning turn the lights back on. It’s going to be tough,” says Lam. “As a community we really need to get our act together and rally.” 

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

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

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

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

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

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

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

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

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

Report: 56% of Consumers Want to Know How Restaurants Use Their Data

Over half of restaurant customers want to know more about how restaurants use their personal information, according to Technomic’s recently released Technology Consumer Trends Report. The report, which is part of Technomic’s ongoing research into how technology is impacting the foodservice industry, looks at U.S. consumers’ preferences and demands in this area. 

Restaurant these days are testing out all manner of technological tools, from self-service kiosks to digital menu boards at the drive through to AI-powered mobile apps that increasingly rely on customers’ past orders and dietary preferences to offer the most relevant recommendations. All these tools require at least some level of customer data, as do delivery apps from the likes of DoorDash or Grubhub. 

Customers’ control over their own data is a key theme in Technomic’s report, which notes that “control over personal data is becoming the expectation.” Over half of consumers, 56 percent, want to know more about how restaurants use their personal information. Currently, less than half (37 percent) say they trust food service brands not to misuse their personal data. 

At the same time, restaurant customers seem more willing to part with personal data if it means getting an easier, faster, more personalized experience with a restaurant. As one survey respondent noted, “The benefits of using technology to order/pay for food and beverages from restaurants outweigh the risks to my personal data.”

We see this adoption in the success brands like Chipotle and McDonald’s, who wouldn’t have billion-dollar-plus digital businesses if customers weren’t willing to hand over at least some of their data. And it’s not just your past orders and address restaurants are after, either. Some, notably Sevenrooms, envision a day when any restaurant will be able to know things like a customer’s dietary restrictions, birthday, and favorite dessert, thanks to data. Others, like 5Thru, are using license plate scanning technology to collect data and make the drive-thru experience faster and more personalized for customers. Then there are ghost kitchens, which more or less run on customer data, as all orders are placed digitally.

As consumers get more comfortable parting with their personal data to navigate the drive-thru line faster or speed up food delivery times, the next big challenge for the restaurant industry will be establishing trust with these customers. As Technomic’s report noted, “. . . brands must meet consumer expectations for privacy and control over their personal data, especially as more brands leverage technology to obtain customer data to personalize the experience.”

Right now just over half of those surveyed for Technomic’s report said they want to know what restaurants do with their data. We can expect that figure to jump over the next several months as demand for off-premises experiences increases and the number of customers ordering digitally goes up. That makes establishing trust a major priority for the rest of 2020.

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