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Daily news and analysis about the food tech revolution

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‘Just Do What Domino’s Did’ – Takeaways From The Spoon’s Ghost Kitchen Deep Dive

It’s our weekend restaurant tech news wrapup. You can subscribe to our newsletter here to get this delivered to your inbox.

And now for some final thoughts on The Spoon’s ghost kitchen event, which we held this past Wednesday.

For the (virtual) event, we gathered restaurant operators, tech companies, ghost kitchen infrastructure providers, and thought leaders together to discuss not just the promise ghost kitchens hold for restaurants, but also the realities those businesses must face when using this model.

Last week, I covered a couple of the major points made at the event around building a virtual restaurant brand and the risks of relying on a 100-percent delivery-only operation. 

To top that off, here are a few more noteworthy points raised by event panelists and attendees throughout the day:

Ghost kitchens and virtual restaurants are here to stay. Many of the developments in recent months have been in reaction to the pandemic, but the ensuing focus on ghost kitchens, delivery, and virtual restaurants will stay long after vaccines have been administered. Huge numbers of consumers have found new ways to interact with food via online channels. Even when it’s safe to dine inside a restaurant again , those new behaviors will continue driving the industry towards the off-premises model.

There is a lot of under-utilized kitchen space out there. From extra space in existing restaurant kitchens to hotel facilities to coffeeshops not open during dinner time, plenty of kitchen infrastructure already exists for restaurants to turn into a ghost or dark kitchen operation. The benefit of this route, versus renting space for a commissary, is that restaurants can leverage fixed costs that are already there. For example, if you are running a virtual brand out of an unused part of your own kitchen, you’re not paying for additional electricity, staff, or equipment. As restaurants plan for off-premises orders and virtual brands, they should consider the infrastructure assets they already have as an important factor in determining how to approach the ghost kitchen question. 

Third-party delivery: Love it or hate it, we still need it. More than one panelist felt that, despite high commission fees, restaurants need third-party delivery services right now. Some went as far as to say the industry would have been decimated over the last nine months without them. Others said restaurants need third-party delivery services in the initial stages of an off-premises/ghost kitchen strategy because of the visibility these services are able to provide via their online marketplaces. 

However, restaurants absolutely must invest in their own native delivery platforms. After a restaurant has attracted an initial following on a third-party marketplace, the big challenge is converting repeat customers to one’s own website and getting them to place orders there. A good deal of marketing and communication has to go into this process, not to mention investing in actually building out that direct channel. Technologically speaking, this is very expensive, but numerous companies exist that help power the back end of native storefronts without demanding 30 percent of each transaction.

Just do what Domino’s did. Quote of the day goes to Lunchbox’s Nabeel Alamgir, who said, “The best thing you can ever do is just do what Domino’s did—invest in it 20 or 30 years before everyone else did.” Of course, he quickly followed up with some actionable advice about delivery and ghost kitchens. But his half-joking, half-serious comment also serves as a reminder and a call to action to the entire industry to keep on innovating, even — nay, especially — amid the uncertainty that has defined the restaurant biz in 2020.

Data :Full-Service Restaurants Are Still Flailing When It Comes to Sales

Apparently it was the week for new data on just how badly the restaurant industry is struggling right now, especially when it comes to full-service restaurants. Payments company TableSafe just released data that found transaction volumes at full-service restaurants declined to 50 percent of pre-pandemic levels in November after recovering 60 percent of pre-pandemic levels in October. 

These numbers follow those from Black Box Intelligence, which found same-store sales growth at restaurants at -10.3 percent, a 3.8 percentage drop from October’s year-over-year sales growth rate. Black Box Intelligence called November “the worst month for the industry since August based on year-over-year losses in sales and traffic.” Sales may continue their decline in the coming months, too.

Both those reports coincide with the National Restaurant Association’s recent letter to Congressional leadership that detailed the rapid economic decline of the restaurant industry and more or less pled for restaurant relief from Congress. 

All this data is also coming at a time when cities around the country are operating under indoor dining restrictions and cold weather has made outdoor seating a non-option for many. 

We’ve said many times before that continued focus on off-premises channels — takeout, delivery, drive-thru (where applicable) — should be a priority for restaurants, both as a short-term response to the pandemic and as a longer-term play. Off-premises channels won’t provide the same level of assistance as, say, stimulus relief or a bailout, but they can provide an avenue to extra revenue that, judging from the above data, is badly needed right now.

Restaurant Tech ‘Round the Web

Hand-hygiene system PathSpot this week announced an ongoing partnership with Opus, which makes a text-based training tool for employees. Together, the two companies will provide a more comprehensive onboarding and training program for restaurants using PathSpot’s device in their stores. 

Can’t go out for a holiday steak? Restaurant chain Ted’s Montana Grill will deliver it to you via its new Butcher Shoppe service. Customers can buy bison and premium beef as individual steaks, fresh grind, and specialty boxes via the new e-commerce site. All orders arrive fresh the next day.

Guardian writer Oliver Holmes got a chance to head over to The Chicken, a restaurant in Israel that happens to be the world’s first location for testing cell-based meat in a restaurant setting. Check Holmes’ review of his experience and the food here for a meaty (sorry, not sorry) weekend read.

Squadle Launches a Thermal Scanner for Restaurants to Better Monitor Employee Health

With restaurant dining rooms now open under new restrictions and precautions, we’re seeing quite a few devices emerge that aim to better monitor the health of workers and customers. The latest of these is from tech company Squadle, which today launched its Sqaudle Sense Thermal Scanner that lets restaurants and other foodservice businesses quickly perform automated health checks on guests and employees, according to a press release sent to The Spoon.

Cambridge, MA-based Squadle is already known among QSRs for its hardware-software system that automates operational tasks in the restaurant. McDonald’s and Dunkin’ are among the chains that already use the company’s technology.

Squadle Sense is a 6”x6” device that mounts to the wall and uses Squadle’s patented ZeroTouch sensor technology. That tech has until now been used by restaurants to monitor equipment like coolers or refrigerators. As part of Squadle Sense, it can now be used to monitor humans’ temperature. 

Employees “sign in” with an app or keycard, then simply stand in front of the device while it performs a quick scan. When the system detects an above-normal temperature, it automatically alerts a manager via the accompanying app. The system can also be used in the front of house for restaurants that want to check guest health before customers enter the premises. Restaurant owners and managers can configure settings (e.g., define “above normal” temperatures) remotely via the app.

According to today’s press release, the device is available for pre-order and will ship in Fall 2020. A monthly fee (determined according to the restaurant’s needs) covers both the hardware and software.

Squadle joins the likes of PathSpot, Fujitsu, POPid, and ResQ in releasing devices and software that monitors employee and guest health and provides better tracking of restaurants’ efforts around sanitization.

One of the challenges restaurants have encountered during this reopening phase is that there is no one single set of standards when it comes to sanitization practices and employee health and safety. That gets especially tricky as regulations vary from state to state. While Squadle isn’t claiming to set any kind of industry standard with its new device, the remote monitoring aspect of the system at least allows multi-unit chains to adhere to the same standards across borders and locations. 

PathSpot Raises $6.5M Series A to Shine a Light on Unwashed Hands

PathSpot, which makes a scanner so restaurants can ensure their employees have properly washed their hands, announced yesterday that it has raised a $6.5 million Series A round of funding. The round was led by Valor Siren Ventures I L.P, which has an anchor investment from Starbucks. The round also included participation from existing investors FIKA Ventures and Walden Venture Capital. This brings the total amount of funding raised by PathSpot to $10.5 million.

PathSpot, as we have so eloquently written in the past, is a way for restaurants to prevent “poop hands” as a result of improper washing. Mounted on a wall in a restaurant’s kitchen, the scanner uses visible fluorescent spectroscopy to check washed hands for pathogens that may carry foodborne illnesses. After washing up, an employee puts their hand under the scanner and a screen tells them whether there are any contaminants remaining.

PathSpot charges a monthly fee starting at $175 a month, which includes the scanner and all the analytics.

As you are undoubtedly aware, hand washing has taken on greater importance during the past couple months of this pandemic. PathSpot’s fundraising comes at a time when restaurants are just starting to open under tighter guidelines and restrictions. An automated tool that monitors the cleanliness of employees’ hands could come in handy to ease at least some frazzled restaurant operator nerves around re-opening.

In addition to restaurants, PathSpot’s technology is used in cafeterias, packaging facilities and farms. The company says that its customers see an average 3x increase in handwashing, reduced instances of contaminant on hands by 75 percent within 30 days, and 97 percent reduction after six months. Plus there is more consistent compliance with FDA Food Code handwashing.

It’s been a busy week for PathSpot, which announced a partnership with Miso Robotics, which makes Flippy the burger cooking robot, earlier this week. Initially the partnership will be focused on cross-selling opportunities, but later on could include some technological integrations.

As we pay more attention to who has touched our food, and under what conditions, it’s not hard to see tech like PathSpot’s becoming more common, if not table stakes for any facility where people handle our food. PathSpot definitely seems to have a path forward.

Miso Robotics Partners with PathSpot for More Automated Hygiene in Restaurants

If it’s one thing we’ve all learned during this pandemic, it’s the importance of hand washing. And one group of people in particular you want washing their hands frequently are restaurant workers.

To help restaurants ensure that the people handling your food are properly handling their hygiene, Miso Robotics announced a partnership with PathSpot today in a move the companies say will “advance sterile and healthy cooking environments.”

Miso Robotics is the company behind Flippy, the burger-flipping, fry cooking robot, while PathSpot makes a device that lets restaurants scan employees’ hands to ensure proper washing (i.e. no poop hands). The two might not seem like the most obvious bedfellows at first, but both companies are the in the business of automating kitchen processes.

At first, the Miso/PathSpot relationship will be around cross-selling. So any discussion Miso has with a potential QSR client could include the addition of a PathSpot device. But Dr. Ryan Sinnet, CTO of Miso Robotics told me by phone this week that the agreement is multi-stage and as it progresses there will be opportunities for dataflow and other technological integrations between the two systems.

Today’s announcement follows a partnership Miso announced in March of this year with PopID to install thermal imaging cameras at a Caliburger location (all three companies count Cali Group as an investor). These thermal cameras will take the temperature of customers, employees and delivery people entering the restaurant to detect if anyone has a fever. In addition to these fever scanning capablities, the PopID kiosks can be used for contactless payment which relies only on facial recognition.

While all of these technologies have been around for a couple of years, they could find accelerated interest in a post-COVID-19 world. As restaurants start to re-open in some parts of the country, they are doing so with new regulations meant to help prevent any potential resurgence of the virus. Scanning employees for fevers and their hands for cleanliness, using a robot to cook food and having customers pay with their face may have seemed downright dystopian just a few months ago. But in a post-pandemic world, they may be the new normal to try and protect wary customers and tentative businesses.

Video: PathSpot Helps Prevent Poop Hands in Restaurants

Poop hands. Fun to say, super gross to have, especially if you work in a restaurant.

We’ve all seen the signs in restaurants broadcasting that employees must wash their hand thoroughly before returning to work. But one person’s deep, lathery scrub is another’s gentle rinse, so how can restaurants (and consumers) be sure that the person handling their food actually has clean hands?

Minimizing foodborne illnesses is no joke. In 2018, The National Institute of Health estimated that “the cost of a single foodborne illness outbreak ranged from $3968 to $1.9 million for a fast-food restaurant, $6330 to $2.1 million for a fast-casual restaurant, $8030 to $2.2 million for a casual-dining restaurant, and $8273 to $2.6 million for a fine-dining restaurant.”

PathSpot has developed one tool to help. Its eponymous device is installed in restaurant kitchens as a means to assess whether or not an employee has indeed scub-a-dubbed enough. After washing their hands, employees stick them under the PathSpot, which uses fluorescent spectroscopy and special software to analyze and detect any pathogens like E. Coli, Salmonella and Norovirus.

PathSpot showed off its device at our recent Food Tech Live event in Las Vegas. Though I had spent the day traveling on a plane, through two airports and in a Las Vegas hotel, I stuck my hands under the PathSpot to see how well I cleaned up. What were my results? Watch the full video to see how it works and find out.

CES 2020: No More Poop Hands! A Conversation with PathSpot

PathSpot Raises Another $2M to Help Keep Poop Off Restaurant Workers’ Hands

PathSpot, which makes a scanner that ensures restaurant workers have washed their hands thoroughly (i.e. no poop hands), announced today it has closed an additional $2 million in seed funding. This brings the total amount of seed funding raised by the company to $4 million.

Restaurants can install PathSpot’s device in their bathrooms. The devices use visible fluorescent spectroscopy to examine washed hands for pathogens that could carry foodborne illnesses. As we wrote about PathSpot last year:

Once lit up, PathSpot can “see” any contaminants not visible to the naked eye still left on the hands. PathSpot looks for indicators behind 98 percent of all food borne illness types and protects against a broad range of food borne illness such as E.Coli, Salmonella, Norovirus, Hep A, Listeria, and many others. If contaminants are found, the PathSpot screen displays a red X and employees should re-wash and re-test their hands. Sites can choose whether they want people to identify themselves at the scanner or not. PathSpot then collects this data and gives it to restaurant management to determine where any breakdowns are in their sanitation procedures.

The Center for Disease Control “estimates 48 million people get sick, 128,000 are hospitalized, and 3,000 die from foodborne diseases each year in the United States.” So it’s not hard to see why limiting the number of vectors of attack for these pathogens is important. And for restaurants operating on thin margins, installing technology to help prevent food poisoning could aid against the kinds of liabilities that cost restaurants millions of dollars.

PathSpot’s total seed round has been led by FIKA Ventures and Walden Venture Capita. The company says it will use the new money to build out its development, sales and marketing teams as well as ramp up production.

Three CEOs on How Tech is Transforming the Restaurant Experience

When the famed L.A. institution Canter’s Deli opened an outpost in the first Kitchen United (KU) location, the first visitors were two elderly ladies. They had read about the new Canter’s location in the paper and stopped in for some piping-hot matzo ball soup. “That’s when I thought ‘Uh Oh,’” said Jim Collins, CEO of KU.

What these ladies didn’t understand is that restaurants operating out of KU commercial kitchen spaces are delivery-only, meant to give kitchens a low-cost way to serve the growing demand for food delivery without having to open up a new location.

The advent of cloud kitchens is just one of the trends is just one of the topics tackled during the Future of Restaurants panel at our L.A. food tech meetup yesterday. Also onstage was Alex Canter (yes, that Canter), CEO of Ordermark (and heir to the aforementioned deli), which helps restaurants streamline delivery order fulfillment, and Christine Schindler, CEO of Pathspot, which makes a device that uses visible fluorescent spectroscopy to scan restaurant employee’s hands to check for foodborne illness. Here are a few of the most salient points (and questions) the speakers raised about the evolving restaurant world — where we are, where we’re headed, and what has to change to get us there.

Restaurants need to adapt fast, or prepare to fail
Not all restaurant owners are tech-savvy — they’re incredibly busy, and some think that technology is just one more thing to add to their overly-full plate. But in a world where more and more people expect their favorite joints to offer services like delivery and online reservations, resistance can prove fatal.

“Brick and mortar businesses are learning to become digital businesses,” said Canter. Which isn’t always an easy transition — or one that restaurants one to take. He said that while there are 800,000 restaurants in the U.S., only 12 percent of them offer delivery. Part of the reason for this is because they don’t want to have to take on the tricky task of managing multiple delivery ordering services.

For Schindler, it’s critical to get adoption from both restaurant owners and workers. And she has a lot of out-of-the-box ways to get people to use PathSpot. “We put a lot of games in our device,” she said. Employees can win prizes for getting clean hand scans, and they also encourage friendly competitions between stores to see whose hands are cleaner.

Collins, however, isn’t willing to spend as much time encouraging restaurants to adopt. “My job isn’t to convince someone that the future is coming, my job is to help someone face the future they already recognize is upon them.” Deep, yes; dramatic, yes — but in a world where the majority of restaurants fail and the remainders survive off of razor-thin margins, survival will most likely mean embracing technology.

Where is there room for innovation?
For Collins, the answer is simple: personalization. He compared restaurants today to the search engine marketplace of 30 years ago. Search engines used to display results based on who paid them the most, then “The Big G” (as Collins called them) came in and started showing results based on what was most relevant to the user. (Full disclosure: Google is an investor in Kitchen United.) “These days, we serve a consumer that’s interested in their own dietary preferences,” he said. “If you’re gluten-free, why do you see menu where 80 percent of the items have gluten? Why don’t you see one that only shows the 20 percent that’s not? That’s what I’m looking for.”

Canter pointed to the gig economy, but not in food delivery. “I’d like to see more [on-demand economy] for labor,” he said. While companies like Pared are leveraging the sharing economy to provide short-term BOH workers, like dishwashers and line cooks, “it’s pretty nascent,” said Canter.

Schindler, unsurprisingly, had her eye on food safety. “We need a holistic sanitation solution,” she said. “It’s crazy that the best solution now is an Employees Must Wash Hands sign.”

Do you have to be from restaurants to help transform them?
“If you don’t understand restaurants, you can’t be in the business of serving restaurants,” said Collins. His point was that restaurant management is just too complex: if you don’t have a deep understanding of what it means to work in a restaurant — from busboy to bartender — it’ll be very difficult to successfully run a restaurant.

But sometimes an outsider’s perspective is valuable. Schindler had never worked in the restaurant industry before founded Pathspot. But while working in rural Tanzania, she saw a problem (food-borne illness) that could be solved by the pathogen-spotting technology she was working on in her healthcare job. By applying tech previously silo-ed in the healthcare world, she could help prevent an issue that has been plaguing food companies — especially as of late. Maybe more technologies developed for other markets (blockchain, anyone?) could have a lasting impact on the restaurant world, too.

Thanks to all who came out to ToolBox LA for our food tech meetup yesterday! Keep an eye out for future meetups on our events page.

We’re Taking Our Food Tech Meetups on the Road to Los Angeles!

On November 27th we’re taking our food tech meetups on the road to the sunny Los Angeles area! We’re teaming up with hardware VC firm Make in L.A. for this a half-day event highlighting innovative makers, startups, and investors that are leveraging technology to shape our relationship with food. Here’s what we have in store:

  • Short talks and Q&A’s from the founders of Ordermark, Pathspot, and Kitchen United, plus a panel with all three companies on how they’re shaping the future of the restaurant.
  • The founder of Somabar will talk about how robots can help us live, eat, and drink better.
  • DishDivvy’s CEO will discuss how her company is democratizing home food businesses and bringing the sharing economy to dinner.
  • We’ll wrap things up with a VC panel on strategies for investing in companies disrupting food industries with leaders from Make in L.A., Upfront Ventures and Valley Oak Investments.

Oh, and there will be plenty of time for networking and lunch from a taco food truck, of course.

If you’re in the L.A. area and are interested in the food tech space we’d love to have you join us. The event will be from 10am-2pm  at MiLA’s innovation hub Toolbox LA in Chatsworth, CA. Registration is free thanks to our sponsors Fenwick & West and the Silicon Valley Bank. See you there!

No More Poop Hands! PathSpot Checks How Well Restaurant Employees Wash Up

In every (decent) restaurant bathroom, there is a big bold sign that reminds employees to WASH THEIR HANDS. Exactly how well they wash those hands is a bit less definitive. And poorly washed hands touching your food after a trip to the bathroom, well, I’m getting nauseated just writing this.

You’re supposed to scrub your hands for as long as it takes to hum the “Happy Birthday” song twice, but life, work and general antipathy towards that horrible song often cut that time short. And dirty hands can be a big problem.

According to the Center for Disease Control, 48 million people get sick, 128,000 are hospitalized, and 3,000 die from foodborne diseases each year in the United States. To put it in cold, monetary terms, a single foodborne illness outbreak can cost a fast casual restaurant anywhere between $6,330 to $2.1 million.

To help restaurant employees and owners get a handle on clean hands, PathSpot has developed a special scanner that uses visible fluorescent spectroscopy to check washed hands for pathogens that may carry foodborne illnesses. After an employee washes their hands, they stick them under the device (installed in the back) which shines a purple light on them.

Once lit up, PathSpot can “see” any contaminants not visible to the naked eye still left on the hands. PathSpot looks for indicators behind 98 percent of all food borne illness types and protects against a broad range of food borne illness such as E.Coli, Salmonella, Norovirus, Hep A, Listeria, and many others. If contaminants are found, the PathSpot screen displays a red X and employees should re-wash and re-test their hands. Sites can choose whether they want people to identify themselves at the scanner or not. PathSpot then collects this data and gives it to restaurant management to determine where any breakdowns are in their sanitation procedures.

Right now, PathSpot is running pilots in forty food-related sites such as packaging locations and restaurants. According to Christine Schindler, CEO & Co-Founder of PathSpot Technologies, early results show that on average, 20 percent of workers (that’s one in five!) fail the hand wash scan during the first week of using PathSpot. As they use the scanner more, the number of failures drops by 75 percent over the course of the first month.

PathSpot joins a number of companies using light in clever ways to improve the food chain. ImpactVision is using hyperspectral imaging to determine food quality. SomaDetect uses light scattering analysis to determine milk quality and detect cow disease. And the handheld SCiO device uses near-infrared spectrometry to analyze cow feed for dry matter.

Based in New York City, PathSpot has raised $2 million in seed funding. The company charges a subscription fee for the service ranging from $100 – $150 per month and includes the PathSpot scanner as well as access to all the analytics.

Schindler’s sights are set beyond the bathroom sink, however. She said using light and their algorithms, future PathSpot devices could scan for allergens like peanuts, or be installed on a conveyor belt to scan plates or even food for contaminants.

But those applications aren’t even in development yet as the company focuses on scaling their current product. And if it works as promised, hopefully more restaurants find a spot for PathSpot in their kitchens.