Close Ad

The Spoon

Daily news and analysis about the food tech revolution

Panera

Hey, Restaurants. (Geo)Fence Me In

A few weeks ago, I looked at some of the top elements QSRs will need in order to stay ahead in the current craze for off-premises meal formats. “More curbside pickup spots” was top of the list, but of late I’m starting to think restaurants will need more than just a parking spot to make their curbside business competitive in 2021. They’ll need to fully automate those last few minutes of the process.

That thought was prompted by new survey data I got this week from restaurant tech company Bluedot. Among other things, the survey found that customers expect to be automatically checked in after placing a curbside order via a mobile app and arriving at the restaurant in the aforementioned parking spot.

Few restaurants, including most major chains, actually do this right now. Most require some form of manual(ish) check in, usually via opening the app and hitting a button, scanning a QR code at the parking spot, or, in some cases, sending a text message.

At the moment, the only major restaurant chains to fully automate the curbside process are Panera, which integrated a geofencing feature into its app last year, and El Pollo Loco. In these cases, geofencing technology can identify a user upon their arrival (the user will have agreed to give identifiers like their vehicle make and model or license plate number) and automatically alert the restaurant. The customer does nothing, save roll down the window and take the bag of food.

Geofencing is typically harder to implement and costlier than using, say, a QR code-based checkin process. Plus, most of the big changes have been busy of late building out sophisticated reward programs or four-lane drive-thrus. Fully automated curbside pickup is something of an afterthought at the moment.

But speed of service is currently a major problem and a major opportunity for restaurants. Case in point: Bluedot’s survey found that across order channels, including curbside, drive-thru, and regular ol’ pickup, that 77 percent of respondents said they would leave if the wait time was too long. The amount of time a customer is willing to wait has dropped to just six minutes, down from 10 minutes in August. 

Given that, it’s only a matter of time before more restaurants start to automate that last step of the curbside pickup process. It may only shave seconds off the process, but in today’s restaurant biz, those seconds add up quickly. 

But to clarify: “restaurants” in this context unfortunately means the big chains, those with the money and resources to spend on incremental tech developments. That leaves out a huge number of businesses just trying to survive the remainder of the pandemic.

That gives restaurant tech companies a major opportunity to help. With the future of the dining room still in question, many tech companies have turned to building out back-of-house and/or off-premises-focused tools and features. Those that cater to smaller chains and independent restaurants should consider the automation of curbside pickup as part of their future plans.

Restaurant Tech ‘Round the Web

Restaurant tech writer and friend of The Spoon Kristen Hawley’s latest newsletter addresses one of the biggest questions in the restaurant biz right now: do third-party delivery services really help local restaurants? The answer, as it turns out, is not so black and white.

Elsewhere, the folks at Restaurant Dive break down the types of assistance these third-party delivery services are providing restaurants. The piece provides a clear, well-organized picture of who’s doing what and how much it is actually helping small businesses.

Finally, there really is a Taco Bell with four drive-thru lanes. Or there will be soon, according to plans from Minnesota-based Taco Bell franchisee Border Foods. Plans surfaced this week for a new store prototype that would feature one traditional drive-thru lane, three for pickup orders, and no dining room. 

Chipotle’s App Puts a Positive Spin on Measuring Ingredient Sustainability

Chipotle today launched the Real Foodprint tool on its app to help customers better track the sustainability of the 53 ingredients it uses in meals. According to a press release from Chipotle, this also holds the quick-service brand “accountable” for its actions and choices around farming and sourcing ingredients. 

The Real Foodprint tool compares the average values of Chipotle’s 53 ingredients against the restaurant industry average in five areas: “Less Carbon in the Atmosphere,” “Gallons of Water Saved,” “Improved Soil Health,” “Organic Land Supported,” and “Antibiotics Avoided.”

To get that data, Chipotle has partnered with research firm HowGood, which aggregates ingredient sustainability information from Chipotle’s suppliers. It then compares that information to data on industry-standard ingredients via information from the United States Department of Agriculture, the World Health Organization, and the United States Food & Drug Administration, among others. The score Chipotle users see for each ingredient is “the difference between average data for each ingredient based on Chipotle’s sourcing standards and conventional, industry average standards,” according to today’s press release.

Chipotle may be the first restaurant brand to partner with HowGood for this level of data, but it’s not the first to bake ingredient sustainability information into its menu. Panera recently introduced “cool food” badges to its menu that indicate which items have a low carbon footprint. Also in 2020, Just Salad introduced a carbon footprint score for each menu item.

But as I wrote at the time of Just Salad’s news, it’s unclear if labels like “0.41 kg CO2e” and “0.77 kg CO2e” will have any kind of impact on consumer purchasing habits, since not all consumers even understand that “C02e” is the standard unit for measuring carbon footprints. Chipotle’s approach, which explains each number in layman’s terms (e.g., “gallons of water saved”) might be more accessible for mainstream consumers at this point.

The fact that Chipotle has also opted for positive language is unique so far among restaurants tracking sustainability on their menus. And it could set a new standard. Research has found that positive reinforcement can be a much more effective motivator than negative feedback or shaming. So telling someone how much water they’re saving on an order could make the idea of eating sustainable much more attractive.

Since the Real Footprint tool just launched, it is far too soon to tell if Chipotle’s “positive change in impact,” as the brand calls it, will lead to more customers ordering lower carbon footprint orders. If it does, we will certainly see similar efforts from other major chains in the coming months.

In-House Delivery Needs to Disrupt Delivery

Some of the talk at last week’s Smart Kitchen Summit revolved around two newish concepts that are especially compelling when it comes to thinking about restaurants: in-house delivery and disrupting third-party delivery. Together, the two could substantially shift the the off-premises meal journey of the future.

Technically, in-house delivery — also called “native delivery” or “direct delivery” — is a decades old practice championed by Domino’s, Jimmy John’s, and other restaurants that have always used their own staff to ferry orders to customers’ doorsteps. But ever since customer demand for delivery went through the roof and then some, most restaurants have found it more economically feasible to offload delivery operations to third-party services like DoorDash and Uber Eats. 

As we cover ad nauseam around here, third-party delivery comes with its own lengthy catalog of grievances, and many restaurants don’t actually make money from those orders. On top of that, they lose control of customer relationships and oftentimes their own branding. 

In-house delivery 2.0, then, is all about restaurants bringing some of that control back under their own rooftops. One SKS panelist mentioned fast-casual chain Panera as a pathbreaker in this area, as the chain still uses its own drivers for many of its orders and only offloads the technical logistics of processing an order to third parties. Bloomin’ Brands, parent company of Outback Steakhouse and Carrabba’s, also handles many of its delivery orders in-house, and Panda Express recently launched its own program that handles the entire delivery journey, from order processing to food transport.

Simultaneously happening is the rise of services like ShiftPixy, which use their technology to power custom-branded websites for restaurants that can process ordering and payments. ShiftPixy also works with restaurants to provide them with drivers, erasing third-party delivery from the process.

All of these approaches to in-house delivery were mentioned during SKS. In a discussion about the rise of ghost kitchens and virtual restaurants, one set of panelists agreed that in the future we will see a wider range of restaurants — major chains and independent mom-and-pop stores — gravitate to in-house delivery as a way of controlling their customer relationships and branding, to say nothing of dodging predatory commission fees from third-party services.

The mention of mom-and-pop shops is important to note. Right now, most can’t afford to build out their own mobile ordering and payments system and pay employees to deliver the food. That territory currently belongs to the Paneras and Panda Expresses of the world, which brings me to our second point: disrupting third-party delivery.

At SKS, more than one person I spoke to predicted that the act of unseating third-party delivery apps’ dominance over restaurants won’t come from imposing more rules and regulations, but from someone bringing a better, cheaper solution to the table. As more restaurant chains with deep pockets take back more of their delivery stack, those solutions might very well surface in the process. 

This is the web version of our weekly newsletter. Subscribe to get all the best restaurant tech news delivered direct to your inbox.

Del Taco Is Launching a Drive-Thru-Only Concept

Following in the footsteps of KFC, Chipotle, Burger King, and other chains, Del Taco is doubling-down on the drive-thru as an important source of sales in the future. The Lake Forest, Calif.-based chain announced on its recent Q3 earnings call it will build a drive-thru-only prototype that can be placed at Del Taco locations with a smaller physical footprint. CEO John Cappasola said during the call this prototype will include “a modernized design, improved functionality, and other operational enhancements,” though he didn’t get more specific than that.

If this story sounds somewhat familiar, it’s because other chains have made similar announcements in the recent past. Most notable among them is Burger King, who several weeks ago announced its own drive-thru-centric design prototype meant to take up less physical space and serve more drive-thru orders in a shorter amount of time. 

Drive-thru has been the most important sales channel for QSRs during 2020’s lockdowns and continued uncertainty over the dining room. However, QSR Magazine’s recent 2020 Drive-Thru Study found that drive-thru times are nearly half a minute slower than they were last year, so it’s not a surprise more chains are redoubling their efforts to make the experience faster and more efficient. With winter fast approaching, outdoor dining is about to get way less appealing to consumers in many regions. Chains will need every order they can get from drive-thru, curbside, and other off-premises channels to make up for lost sales in the dining room/patio over the next several months.

Restaurant Tech ‘Round the Web

A wider slowdown could erase up to 2 million jobs restaurant and retail, according to new research from Gusto cited by Restaurant Dive. The losses could total roughly $190 billion.

Following openings this year of three off-premises stores in Chicago, P.F. Chang’s will expand its to-go-concept to 27 locations by 2021. The company is also testing an in-house delivery service at 10 of its locations in the U.S.

As we reported this week, Burger King is piloting reusable cups and sandwich containers in New York, Portland and Tokyo next year. The program is being done in partnership with TerraCycle’s Loop, which is also doing the McDonald’s reusable cup trial in the U.K.

Google Continues Its Quiet March Into the Restaurant Biz With Panera Integration

Fast-casual chain Panera today announced a new integration with Google that lets customers order pickup and delivery meals directly via Google’s Search, Maps, and Assistant apps.

It’s a pretty simple setup. Search “Panera” and, if nearby locations of the chain are participating, you’ll see “order pickup” and “order delivery” buttons right beneath the map on the page. You then simply scroll through the menu selecting the items you want to purchase and checkout using your mobile wallet. Those using voice can ask Google Assistant to find the nearest Panera and place your order directly via the device.

It’s no surprise that the Google integration is available for off-premises-only orders. Curbside pickup and delivery remain two of the biggest sales channels for restaurants right now as dining rooms remain either shuttered or operating at reduced capacity. In response, those restaurant chains that have the money to do so are pouring more resources into speeding up the off-premises experience with more digital tools.

Google itself is no stranger to the restaurant business. In fact, the search giant has been something of a sleeping giant the last couple years when it comes to restaurants. In 2019, it added menu recognition to Google Lens, which lets you point a camera at a menu to see popular items, and integrated third-party delivery services directly into Search, Maps, and Assistant. It also partnered with third-party delivery integrator Olo to let restaurants offer delivery via Google.

And with the fate of the restaurant dining room still very uncertain, words like “speed” and “efficiency” are top of the list for many restaurant chains when it comes to their off-premises strategies these days. Panera is no exception. The chain has already inked hybrid delivery partnerships with many of the major services, and recently launched its own geofence-enabled curbside pickup program. 

The Google partnership is available for select Panera stores around the U.S. In all likelihood, it will also press forward the trend of major restaurant chains partnering with Google for off-premises orders.

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.

In a Time of Broken Norms, Restaurants Experiment to Stay Intact

So earlier this week I was chatting with a food industry colleague who pointed out the sheer amount of opportunity food businesses have right now to experiment with existing norms. At the moment, breaking those norms feels less risky because in many cases we can’t do things the old way.

No one knows this better right now than restaurants. Dining rooms are closed and once they reopen they won’t look the same. Shifting to a delivery-takeout model is a necessity, but it may not make up for all the lost sales. And lately, restaurants are going far outside their normal territory for ways to survive the double whammy of a global pandemic and an industry on the brink of meltdown.  

Selling groceries is one way.

Case in point: Subway this week announced Subway Grocery, a site where you can buy pantry staples straight out of the Subway supply chain. Think foot-long bread loaves, frozen soup, bagged lettuce, and bulk amounts of bacon. The move is a way to get consumers goods that might not actually be in the grocery stores right now (thanks, panic shopping). More importantly, it lets the chain supplement its to-go format while dining rooms stay closed due to coronavirus.

Panera quickly followed that news with a similar concept, Panera Grocery. Customers can order grocery items like breads, produce, and dairy items straight from Panera’s supply chain and via the Panera app or through Grubhub. Like any Panera meal, the goods get delivered to customers’ houses.

And in NYC, just salad launched Just Grocery, which says it will deliver household staples — from produce to paper towels — in 90 minutes or less to Manhattan residents. The company also launched a meal kit service of items from its own menu, which customers can also order from the Just Grocery site.

If I were a betting woman, I’d say more of these initiatives are to come. Right now, big chains like the ones above as well as smaller restaurant businesses (see below) have no choice but to adapt their businesses to new formats so they can add incremental revenue to severely declining sales Plus, I imagine prepping grocery and meal kit orders is another way to keep employees occupied in the process, not to mention save on food waste costs.

But what about when dining rooms open again? Will restaurants need an additional grocery business?

I’ll go on a limb here and say yes, and that at least some of these initiatives will be in place for a while. The reason is that once dining rooms re-open, they’re not going to resemble their former selves. I’m just going off my own speculation here, but I foresee the days of cramped tables close together and family-style seating as a thing of the past. Restaurants dining rooms will have way less capacity, and more than a few people will be wary of going out to eat.

That makes the additional revenue from grocery businesses an attractive long-term play for many of these chains.

Small Restaurants Turn to Big Grocery

Other restaurants are turning to grocery stores themselves, not to sell pantry staples but to get their own meals in the hands of customers at a time when eating out isn’t an option. Texas chain H-E-B launched a pilot program to carry ready-made meals from restaurants in 29 of its stores. For the program, the chain has partnered with local restaurants, some of which have been able to bring back furloughed employees thanks to the extra work (and presumably money). 

And in some cases, grocery stores are actually doing the hiring themselves. When Greensboro, NC-based chain The Fresh Market realized it didn’t have enough staff to keep up with the demand for groceries as well as the chain’s deli counter, it reached out to Darden Restaurants to hire out-of-work employees from the company’s restaurants (Olive Garden, Longhorn Steakhouse).

The sharing of employees seems more of a stop-gap measure than long-term employment solution for many individuals, particularly those building a career in the restaurant industry. Selling restaurant food in stores, however, might stick around. Like I said above, there’s a pretty good chance restaurants won’t be operating at their old capacity once dining rooms reopen, which means other sources of revenue — even incremental revenue — will be a necessary staple for some time to come.

DoorDash Slashes Restaurant Commission Fees By 50%

Of late, I’ve approached most news from third-party delivery aggregators with more than a little skepticism along with the question: Is this really helping restaurants?

DoorDash announced it is reducing commission fees for “local” restaurants by 50 percent, from April 13 through the end of May. “This is not a deferral of fees, nor will merchants be asked to pay anything back,” the company said.

Third-party delivery companies are getting an increasing amount of flack for those commission fees, which can go as high as 30 percent per transaction. Cutting back those fees would obviously help restaurants during this time.

What I’d like to know is, when will the other shoe drop? More and more, the major third-party delivery companies are seen as predatory entities that are astoundingly out of touch with the daily realities of running a restaurant. Is this news from DoorDash an about-face for the company or is the other shoe dangling in the air right now? Maybe it’s hidden fees or getting locked into a contract. Maybe it’s none of those things, though that feels too optimistic an idea in a discussion about third-party delivery.

I’ll be having a third latté and digging into the fine print, so more on this to come.

Keep on truckin’,

Jenn

This is the post version of our weekly restaurant tech newsletter. To get the newsletter delivered to your inbox, just sign up here.

Week in Restaurants: More Legislation for Food Delivery In Store, Unlimited Coffee From Panera

Between hanging out with the Basque Culinary Center folks earlier this week, flying over the Atlantic, and making it back to NYC just in time for The Spoon’s Customize event, I’ve had limited time to go in-depth into restaurant tech. That means this weekly roundup is as much a catch-up session for me as it is for you. And there’s a lot to catch up on this week. Read on for a few notable news bits from around the web this week. 

Panera Launches Unlimited Coffee Subscription

In what’s likely a move to entice more customers to its loyalty program, Panera this week launched the MyPanera+Coffee subscription service. Membership can only available by signing up for a MyPanera loyalty/rewards program then adding the $8.99/month (plus tax) subscription service to your account. Those who do can walk into a Panera every two hours and refill their mug, regardless of its size, without incurring any additional charges beyond the monthly fee. The same goes for iced coffee and hot tea, too.

NYC Introduces Six Bills to Regulate Food Delivery

The New York City council introduced a series of bills this week that aim to regulate the third-party food delivery industry. Six bills in total would would regulate different areas of delivery. Restaurant commission fees, third-party services’ control over menu pricing, erroneous charges to restaurants, tamper-evident packaging, and special licenses for delivery services are just some of the issues the proposed legislation addresses. (Read the full breakdown here.) If one or more of these bills are signed into law in NYC, the impact could have a ripple effect across the delivery industry in the rest of the country.

Yum! Brands to Phase Out Polystyrene Packaging

The parent company of Taco Bell, Pizza Hut, and KFC is getting onboard with saving the oceans. This week, Yum announced it will stop its use of polystyrene packaging globally by 2022. Right now, the material is used mostly for side dishes on delivery/takeout orders for Yum Restaurants. Yum hasn’t yet said what it will replace polystyrene with, but that phasing it out will eliminate 100 million foam containers per year across the company’s restaurant portfolio. 

Outback Steakhouse Creates a Hybrid Delivery Strategy With Exclusive DoorDash Partnership

Restaurant company Bloomin’ Brands announced this week that its Outback Steakhouse brand has partnered with DoorDash for an exclusive delivery program. Not only does the deal make Outback the largest steakhouse available via the DoorDash platform, it also puts the chain on a growing list of restaurants applying a more hybrid approach to delivery, one that utilizes a combination of third-party services and in-house capabilities.

Bloomin’ has actually spent the last couple of years developing an in-house delivery program used by both Outback and another of its brands, Carrabba’s. With this program, customers place orders directly via the Outback or Carrabba’s apps and the company handles its own drivers to transport the food from the restaurant to the customer’s doorstep.

But on the company’s recent Q2 earnings call, Bloomin’ CEO Dave Deno noted that, “We recently came to terms of the national third-party delivery provider. This channel will complement our existing platform. Importantly this will help expand our reach to customers who are loyal to the third-party delivery companies.” 

It’s not a surprising conclusion for a company to draw, given that third-party delivery apps like those from DoorDash, Grubhub, and Uber Eats are expected to have upwards of 44 million users by 2020 in the U.S. alone.

The DoorDash partnership will act to complement, rather than replace, Bloomin’s existing in-house program. It also makes Outback and Bloomin’ the latest in a series of restaurant companies adopting a hybrid approach to delivery, where incoming orders come from both the restaurant’s in-house app as well as those of third-party delivery services. Panera, one of the most well-known chains to keep delivery operations in house, announced in August it was adding multiple third-party partners to its strategy.

For Outback, the move to add third-party delivery is also in keeping with a trend highlighted in another report, Toast’s recent Restaurant Success in 2029 survey. That report noted the amount of variety today’s restaurant customers look for in terms of delivery options, and suggested large restaurant chains use a combination of both in-house functionality and third-party delivery apps.

However, the Toast report also said it was “extremely important for restaurants to be represented across multiple third-party delivery platforms.” In that sense, Outback is going against the tide in some respects by signing an exclusive deal with DoorDash. Even McDonald’s recently ended its longstanding exclusive deal with Uber Eats to add more third-party services.

This week’s press release noted that Bloomin’ chose DoorDash as its delivery partner “for the next phase of its omnichannel approach to delivery” for Outback. That could well mean the company plans to add more partners in future as it continues its navigating the phases of its delivery strategy.

Having Nearly 100% (or More!) Worker Turnover Per Year is Common for Panera and Other QSRs

A big reason we write about food robots so much (and built an entire conference around them), can be summed up in this stat: Panera loses nearly 100 percent of its workforce over the course of a year — and that number is actually considered pretty good for the QSR industry.

CNBC has a fascinating and in-depth look at how it’s not uncommon for fast food restaurants to lose more than 100 percent of its workers in a year. From that article:

The official Bureau of Labor Statistics turnover rate for the restaurant sector was 81.9% for the 2015–2017 period, but industry estimates are much higher, reaching 150%, and the problem has gotten worse in recent years.

How is it possible to lose 150 percent of a workforce? Because QSRs are losing not just one worker, but also the person that comes in to replace them.

CNBC outlines lots of reasons that turnover is so high: fast food jobs are so routinized as to make them disposable, low pay, no real career path, the societal reputation of having a “McJob,” and how gig economy jobs allow people to set their own schedules. You should definitely read the full article.

We wanted to highlight it here on The Spoon because in our previous coverage and fireside chats with restauranteurs and food robotics startups, we often hear these same sentiments about fast food labor — but they are delivered in pretty vague terms. Basically we are told that restaurants have a hard time hiring and keeping people, nobody wants to work at a restaurant, more people would rather drive for Uber. What CNBC’s piece does quite well is it provides some hard context around those issues with hard numbers.

Sloughing off more than 100 percent of your workforce each year is a crazy way to run a business. But this deep turnover is the reason we see so many robotics companies looking to fill that void. Brightloom (formerly Eatsa), Miso, Creator, Bear Robotics, Dishcraft, and Cafe X are just some of the companies looking to automate different parts of the restaurant workforce.

Creator is actually a good example of what could be possible for automating jobs in a QSR. It’s a restaurant built around a (delicious) cheeseburger making robot. As Creator CEO Alex Vardakostas told us, the idea is that if you take away the menial, repetitive work of flipping a burger, you can free up human workers to be more creative and ideally more fulfilled at their jobs.

Creator is just starting out and its thesis has yet to be proven at scale, but it could be a model for future QSRs. Vardakostas realizes that his employees won’t work at his restaurant forever, but he wants to make their time at Creator enriching and fulfilling. Creator employees even get “5 percent” time to learn a new skill.

While food robots and automation are going to take a certain number of human jobs in the fast food industry. Hopefully it can work to make those remaining jobs more attractive so people will stay in them longer.

Panera’s Hybrid Approach to Delivery Could Be a New Standard for Restaurants

Panera is one of those increasingly rare restaurant chains that’s not a pizza company and has still managed to successfully keep its delivery program an entirely in-house operation — until now, that is. Yesterday, the St. Louis, MO-based bakery and sandwich chain announced its first-ever partnerships with third-party delivery services.

Customers will now be able to order Panera goods from DoorDash, Grubhub, and Uber Eats along with the company’s own website and apps. However, these third-party delivery service partnerships are for online ordering only; Panera will still use its own fleet of drivers to handle the actual delivering of the food from restaurant to doorstep.

Panera has dubbed this the “bring your own courier” model, and the approach appears to be about maintaining quality and brand integrity throughout the whole of the delivery process — an issue more and more restaurants, large chains in particular, are now addressing.

Setting aside the ongoing concerns around commission fees a moment, one of the biggest benefits of working with third-party delivery services is that restaurants get easy access to a highly streamlined online ordering platform. Developing an in-house system that holds menus, processes orders and payments, and gives users status updates on their orders is an expensive, time-consuming undertaking. Third-party delivery services handle this work for the restaurant, and also offer the increasingly popular option of direct-to-POS integration with restaurant systems, where an order from, say, Grubhub, goes directly to the main POS system.

But restaurants get little in the way of branding when they’re listed on Grubhub et al. or, for that matter, where they show up in terms of users’ searches. And they get pretty much zero control over the quality of food and customer service once a meal leaves the restaurant in the hands of a third-party driver. For example, they can’t control that one out of four drivers apparently sample your food en route to your home. Sure, the risk of that or of an order being late/cold/incorrect doesn’t disappear when you bring delivery in house, but at least Panera has more control over who to hold accountable in those situations.

Continuing to use its own drivers as well as maintain an in-house ordering program also lets Panera exercise more control over branding and customer service while still giving the company access to a wider user base via Grubhub, Uber Eats, and DoorDash.

The nature of this new partnership also makes Panera an early adopter to what could become a major trend among national restaurant chains. Just yesterday, we looked at Toast’s “Restaurant Success in 2019” report, which suggests that having both a robust in-house online order system and a presence with all major third-party delivery platforms “could be a boon to your business” when it comes to major multi-unit chains.

Most brands, however, can’t or don’t want to incur the economic burden of maintaining a driver fleet, which is one reason we’re also seeing reverse versions of this hybrid strategy. Denver, CO fast-casual chain Teriyaki Madness is a good example: the company still works with third-party delivery services, using their drivers, but is trying to originate more orders through its own in-house app. A company called Shift-Pixy, meanwhile, acts as a middleman between restaurant and delivery service and provides its own drivers to drop the food.

Those approaches may help restaurants with brand credibility, but Panera’s approach is so far the only major one to both take advantage of the continued popularity of third-party delivery while still owning that last mile. “We believe this partnership model helps differentiate us from our competitors and will take our already successful delivery business to new heights,” Dan Wegiel, Panera’s EVP Chief Growth and Strategy Officer said in a statement.

This hybrid approach could indeed prove fruitful for Panera, though it would have to be yielding some pretty big returns to influence other chains to go as far as investing in their own drivers in order to adopt similar strategies.

Regardless of whether that happens, the industry will see plenty more of these hybrid approaches to delivery along with many more questions who should really own that last mile.