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The Spoon

Daily news and analysis about the food tech revolution

Square

Square Launches New Service So Restaurants Can Take Delivery Orders Directly

Payment processing company Square announced today the launch of its new On-Demand Delivery for its customers using the Square Online Store. The service allows restaurants and other sellers to take and fulfill delivery orders directly through their own websites, rather than going through a third-party delivery service.

Off-premises eating had been a growing portion of the restaurant industry’s revenue before the pandemic hit. Once restaurants were forced to close down dine-in operations out of COVID-19 concerns, delivery and curbside pickup became the only way restaurants could stay afloat.

But typically if restaurants want to offer delivery, they need to sign up for a third-party delivery service like DoorDash or Uber Eats. Those third-party delivery services charge high commissions and fees that basically gobble up most of the money a restaurant earns and drives up the price for consumers.

Square is letting restaurants bypass some reliance on those third-party delivery services by letting restaurants accept delivery orders directly on their own websites. From a Square blog post today announcing the new feature:

When an order is placed on the seller’s online store, a courier from the restaurant’s delivery partner is dispatched to the business location, picks up the order, and delivers it to the buyer. The buyer receives text updates with links to live maps to track delivery progress. Sellers pay a flat fee of $1.50 per order to Square, plus a fee to their delivery partner that is calculated in real-time based on distance and other factors. Sellers can pass this fee entirely to the buyer or offer custom delivery promotions. When applied across hundreds of delivery orders each month, sellers can save a significant amount on per-order costs.

There are some devils in these details. For instance, Square’s On-Demand delivery is now powered by Postmates, which itself a third-party delivery service (Square says more courier services will be added). Per Square, the restaurant is still paying Postmates a fee “based on distance and other factors.” The question then is, how much cheaper is it for a restaurant to take the delivery order directly and just use Postmates as a courier than it is to take orders via Postmates? Because part of what you pay for with a third-party delivery service is access to their large marketplace of customers looking for something to eat. Will abandoning third-party services save enough money?

Regardless, this is another example of the continuing evolution of the restaurant industry trying to navigate this pandemic and beyond. Third-party delivery services were a hero, then the villain. Restaurants that had once outsourced delivery are now looking to bring it back in-house, or create some type of hybrid solution.

Square’s On-Demand feature is more fuel for even more change.

OneDine Raises $5M for Its Front-of-House Restaurant Tech Platform

Dallas, TX-based startup OneDine has closed a $5 million funding round with a pre-money valuation of $90 million for its front-of-house restaurant tech platform. The new funding came from “a private family trust” along with participation from TMW Capital and Hidden Lake Asset Management of New York.

OneDine founder and CEO Rom Krupp told The Dallas Morning News last week that his company will use the money to “staff into fulfillment.” OneDine plans to grow its staff from 24 to 100 persons by the end of the year to help meet the growing demand for the product, which currently serves over 60 brands and has a waiting list of others lining up to implement the technology.

The solution itself is a SaaS-based platform that lets customers with a OneDine app and profile check in to the restaurant, set dietary preferences and restrictions, order from a digital menu, and pay at the table, all from their own mobile device. Guests can also receive customized recommendations and fill out post-meal surveys. The platform integrates with restaurants’ POS systems so that businesses don’t have to do a major tech overhaul in order to incorporate the technology into their day-to-day operations. 

OneDine told The Dallas Morning News that restaurants using the platform can operate with 20 percent less waitstaff. At a time when restaurants are facing a labor shortage and turnover is high, being able to automate certain front-of-house costs is something many restaurants are looking into. 

“Labor has never had so many options as they do now and the industry has to change because of that to stay relevant,” Rajat Suri, CEO of restaurant-tech company Presto, told us last year. Like OneDine, Presto makes a front-of-house-focused tech solution that automates certain tasks, including the order and pay process for guests. Toast, Square, and many others are also automating the front of house.

For its part, OneDine says it plans to hire support and client fulfillment staff as well as expand across the U.S. in the coming months.

DoorDash Acquiring Caviar from Square for $410M

Food delivery startup DoorDash announced today that it has entered into an agreement to purchase Caviar from its parent company, Square, for $410 million dollars in a combination of cash and preferred stock.

The press release laid out the rationale for the deal, stating:

The acquisition underscores both DoorDash and Caviar’s strategic commitment to merchant selection. The addition of Caviar’s premium restaurants, with whom DoorDash will work closely to drive their growth, will enable the combined organization to cater to every food preference and occasion. Caviar’s complementary geographic footprint provides DoorDash with a significant number of new and unique customers, who will benefit from an even broader set of merchants.

Square acquired Caviar in 2014 for a reported $90 million, and reportedly tried to sell it just two years later but couldn’t find a buyer at the price the company wanted. A little more than a year ago Square acquired the assets of Zesty in a bid to bolster its corporate catering services.

But ultimately Square is in the business of transactions, not delivering the food itself, so offloading Caviar makes sense. Not having to deal with Caviar will help Square focus on the restaurant point of sale software platform that it launched last year that helped streamline orders from third-party services like DoorDash.

For its part, DoorDash has been making headlines all yearL raising a billion dollars in funding, becoming the first third-party food delivery startup to service all fifty states, and sticking by, and then ultimately caving in and changing a controversial tipping policy for its delivery drivers.

DoorDash’s deal to acquire Caviar is expected to close by the end of this year.

Toast Launches Real-Time Guest Feedback Tools for Restaurants

Real-time guest feedback is becoming the norm at restaurants, and today, restaurant-tech company Toast unveiled via press release a suite of new features meant to make it easier for customers to rate their meals and for restaurant managers and operators to understand and act on their feedback.

Toast Guest Feedback, as the new features suite is dubbed, lets restaurants collect guest feedback via the Toast Go and Toast Digital Receipts software. Toast Go is a handheld POS system made specifically for the restaurant industry. Both the hardware and software are Toast products. With the device, servers can take orders, receive real-time menu updates, swipe a customer’s credit card, and coordinate with the back of house so that cooks no longer have to scream “order up!” when someone’s food is ready.

With Guest Feedback, the Toast Go device also lets guests leave feedback about their experience via the touchscreen tablet in the form of thumb-up-thumb-down ratings. It also lets users type in comments on their experience. That feedback is processed in real time and, if they choose, managers can opt to receive SMS alerts every time a guest leaves a negative comment or review. Toast Guest Feedback can also run a report summarizing all reviews, so operators can see patterns and trends: what’s working, and what isn’t. Guest Feedback integrated into Toast Digital Receipts works much the same way, except for to-go food.

Right now, only about 2 percent of restaurant customers take the time to fill out a survey or comment card at the end of a meal. Having a digital, easy-to-use method for this could increase that number, and up the amount of information a restaurant can use to assess quality of service, popular foods, and other aspects of day-to-day operations.

Toast is hardly alone. Company Presto just raised $30 million, in part for its wearable tech that lets servers and managers see real-time feedback from guests. Square’s restaurant POS system allows the restaurant to communicate directly with a guest through the digital receipt and provides owners and managers a comprehensive summary of guest feedback.

Implementing real-time feedback brings a lot of obvious pluses to any restaurant operation. It’s easier to resolve a dispute or sooth an unhappy customer if said person is still in the restaurant when management is informed. The summary feature seems particularly useful, as it can alert managers to repeat issues in very clear terms. If five guests complain about the state of their after-dinner lattes, it might be time to retrain the staff on how to make those drinks. And Toast’s feature is already reportedly upping the amount of money individual servers bank each year, since the system as a whole makes it easier to tip, even suggesting tip amounts that might be higher than a guest might leave with cash.

One thing restaurant owners and managers will need to keep in mind with this brave new world of guest feedback: technology can’t communicate that some people are just assholes who take their frustrations out on servers. Not everyone, and not even most. My decade-long experience working in restaurants tells me the majority of people are reasonable, and that using real-time feedback as an alert, a manager could resolve an issue and therefore any negative tension before a guest even leaves the premises.

To be honest, a bigger problem than guests abusing the feedback feature is whether a constant stream of ratings will upset servers’ mental space during busy shifts and cause unnecessary tension. That’s one thing Presto has sought to address with its wearables: they only alert managers for super-important issues (as deemed by the restaurant), not every little gripe or hiccup.

Still, most owners and managers at restaurants worked their way up the ranks and have at one point or another stood in that server’s shoes. Real-time, tech-driven feedback has some horror stories to tell, to be sure. But I do think most folks working in the restaurant will be able to see the difference between a real problem and a high-maintenance customer, and real-time feedback will prove itself a huge help rather than make someone’s job miserable.

Coffee Survey: Lattes Reign, Oat Milk Soon to Be Top Alterna-Milk

Happy International Coffee Day! Technically, it’s tomorrow, but we’re so hopped up on caffeine right now that we can’t wait.

To give a little perspective on our worldwide daily addiction, the folks at the Specialty Coffee Association (SCA) teamed up with payment processor, Square to give us a sense of just how we like our java here in the U.S..

The Square Coffee Report 2018 uses data based on millions of anonymized Square transactions from thousands of coffee shops across the U.S. from June 2017 to June 2018. Here are some of their findings:

  • The latte is still by far the most popular coffee across the U.S., with more than 67 million ordered during data time period. The average price of a latte is $4.16.
  • Almond milk is currently top alterna-milk, but that could soon be supplanted by oat milk, sales of which have increased by 425 percent since June of 2017.
  • Sales of drop coffee peak at 8 a.m., iced tea at noon, and iced blended drinks at 2 p.m..
  • Cold brew coffee is hot. As of today, cold brew orders are 42 percent higher than ice coffee orders.

Of course this study should be taken with a grain of salt(ed caramel). Square doesn’t work with Starbucks, for instance, so that data is not included in this round up.

But it does provide a fun snapshot of our coffee consumption (and a bit of trivia to share) as you head out for your next cup.

Toast and BevSpot Want to Improve the Way Restaurants Use Back-of-House Data

Yesterday, restaurant-management software maker Toast announced a partnership with BevSpot, whose own software simplifies the order tracking and inventory process for restaurants. The new solution claims to save businesses time and energy collecting and making sense of data from sales, ordering, and inventory.

Toast’s Android-powered platform already combines a POS system, front- and back-of-house operations, and customer-facing technology (e.g., tabletop order kiosks) into a single cloud-based platform. The BevSpot partnership is a boost because it addresses the often arduous process of gathering and analyzing data from activities that happen behind the scenes: taking accurate inventory, checking the status of an order, and calculating things like pour costs. For a restaurant — particularly a large operation — a combined service like the Toast-BevSpot one could speed up and/or automate a lot of these tasks, not to mention make the numbers more accurate.

Inventory tracking alone is tough; screwing it up, even with a tiny miscalculation, can drastically change the sales numbers. With the Toast-BevSpot integration, businesses will be able to see exact numbers on what goes into the kitchen, what goes out, spillage, customer complaints, theft, and a whole bunch of other factors that affect inventory.

And by harmonizing the POS data with inventory and order data (which is all digitized, thanks to BevSpot), businesses will in all likelihood have an easier time spotting trends, whether it’s about which time of day sells the most fries to what days of the week the kitchen goes through more eggs.

The BevSpot integration is part of Toast’s API Partner Program, where companies can partner with Toast to integrate its system into their own software. Among many others, Grubhub, LevelUp, and Hot Schedules all participate.

Toast raised a $115 million in Series D funding in July and is currently valued at $1.4 billion. But’s a crowded market out there. TouchBistro is a popular competitor and raised a $70 million Series D in June, and Square launched its own POS system in May. This partnership with BevSpot is no doubt a way for Toast to further differentiate itself by dabbling in the data issue — a topic that’s only going to get more important as high tech becomes commonplace in restaurants.

Corporate Catering Service ezCater Raises $100M, Eyes International Expansion

Online business catering service, ezCater, has raised $100 million in Series D funding, the company will announce on Tuesday. The new investment is led by Wellington Management Company with participation from existing investors ICONIQ Capital, Insight Venture Partners and others. This brings the total amount raised by ezCater to $170 million.

EzCater’s marketplace connects businesses with catering services and restaurants across the county, as well as offering a suite of products to help restaurants receive and manage orders and deliver large scale meals.

In a press statement, ezCater says that it will use the new funding to “deepen its products, and expand internationally.” According to VentureBeat, ezCater has not announced which countries will will expand into first.

The money also makes a very public statement that ezCater is not going anywhere anytime soon. This could be important to winning new and keeping existing clients as the corporate catering sector appears to be entering a state of flux. In just the past few months, Square acquired Zesty, EAT Club acquired Farm Hill, and Peach laid off 33 percent of its staff.

Plus, the sheer size of the round could put added pressure on rivals such as Platterz ($21.7 million raised), ZeroCater ($17.6 million raised), and Forkable ($813,000 reported, but final amount raised unknown), all of whom can now be outspent by ezCater.

As we’ve said before, there isn’t much corporate catering services can do to differentiate themselves to customers. At the end of the day, companies are trying to keep employees happy and employees don’t care who delivered the meal, only whether or not the food is good and on-time. EzCater’s war chest will now tubocharge its scaling, and help it outlast (or acquire) its smaller competition.

Square Launches a Well-Rounded POS System for Restaurants

Square has long been the favorite of small businesses like hair salons and independent artisans. Now, the merchant-services company is hoping to make an impact in restaurants with its newly announced point-of-sale system (POS).

The software, which works for both sit-down and quick-service restaurants, is reportedly Square’s “most sophisticated software yet.” The system centralizes all a restaurant’s operations in a single place, from booking a table to placing orders and managing the check after the meal. Restaurant owners and operators can also do maintenance tasks, like changing table maps and updating menus on the fly, without the need of a service person.

Most important, Square’s new system promises to also solve an issue puzzling more and more restaurants nowadays: how to manage orders coming in from multiple different channels, both online and off.

Its POS system does so by integrating online and offline sales and centralizing them into one software system. In other words, sales from in-house diners as well as those ordering via Postmates, UberEats, and the growing number of other online services can all be viewed in the same place, giving restaurant owners and operators a better understanding of how each channel contributes to the overall sales picture.

As others have said, the acquisition of Caviar from four years ago makes more sense in light of this news. Add to that Square’s recent acquisition of “certain assets” of corporate catering service Zesty, which would help Square to further expand Caviar’s capabilities. Meanwhile, Caviar serves 18 different metro areas and counts Eataly, and Momofuku among its restaurant partners, presumably giving Square access to a whole new set of potential clients for this new POS platform.

Square isn’t alone in rethinking restaurant operations. Actually, that’s an understatement, because there are plenty of folks trying to centralize restaurant tasks, orders, and data into one place and also address the growing number of channels by which consumers order food. “Every restaurant is becoming an omnichannel business,” Gokul Rajaram, Caviar lead at Square, told Fast Company.

Toast is another big player in the space, offering similar features to Square, including the promise of integrating online orders with the rest of the operations. TouchBistro and Clover both offer “all-in-one” systems, and there are tons more options on the market, too.

Square puts a lot of emphasis on the online orders and delivery aspect of its system, even saying “delivery is in our DNA.” That’s a wise proclamation to make in this day and age, but it’s also only a matter of time before most restaurants will add the same thing to their DNA. Which means we can expect the battle for the omnichannel restaurant to get much bigger, sooner rather than later.

Square Gobbles up Zesty to Bolster Corporate Catering

Square, the merchant services company, announced today that it has acquired “certain assets” of the corporate catering startup, Zesty. This addition will help Square expand its food ordering service, Caviar. Terms of the deal were not disclosed.

Zesty is only available in the Bay Area, where it works with 150 restaurants to delivery corporate meals. The company had raised $20.7 million since launching in 2013, $17 million of that was in a Series A raised in 2015. Zesty will become part of the Caviar for Teams unit, which launched in 2016. The Zesty team will bring with it “full-fledged, white-glove corporate catering, allowing us to serve companies of all sizes,” Square said in a press announcement.

The acquisition comes at a time when the concept of corporate catering is going through its own evolution. It’s no longer just dumping food in a main room at 11:00 and having people scrum to get it while it’s still hot (and having the worst bits sit uneaten). New types of competitors are springing up with new approaches to feeding hungry employees.

Forkable uses smart recommendations to let employees order individual lunches rather than partake in large buffets. Allset flips the script entirely and makes it easier for employees to get out of the office and pre-order and pre-pay for meals at nearby restaurants. And Byte Foods sets up fridges with healthy snacks and food right inside the office.

But until those become more mainstream, Zesty will keep bringing in chafing dishes and, in the short term, continue operate independently.

For Aspiring Food Truck Owners, Technology May Be More Important Than the Actual Truck

Food trucks as a concept date all the way back to ancient Rome, but most cite 2008 as the start of the current mobile-gourmet craze when Korean-American chef Roy Choi opened Kogi BBQ in Los Angeles. Now, these mobile restaurants exist all over the U.S., have their own Zagat category, and are set to generate an expected $2.7 billion in the U.S. in 2017.

So it’s an ideal time for entrepreneurs to climb onboard and fire up the grill for their next venture, right?

Sort of. But dropping $85,000 on a truck and equipment won’t guarantee you a successful business, just like parking said truck a prime location won’t automatically win you a following of devout foodies.

Yes, it’s a great way of starting a restaurant with minimal overhead. Even so, food truck operators often find themselves in a kind of hell on wheels where parking-lot space is a daily battle (PDF), the weather can ruin an entire day’s profits, and there’s no consistent set of followers because when and where your business operates is also inconsistent. Health-code mistakes and violations are rampant. Add on the various permits, licenses, and insurance policies needed—which vary from county to county across the U.S.—and it’s little wonder that around half of all food truck businesses fold within the first year.

Enter Bistro Planet, the brainchild of tech entrepreneurs Roie Edery and Aleksey Klempner. Edery previously helped launch the medical-marijuana-delivery app Eaze, and alongside Klempner, he believes Bistro Planet, and technology in general, can eliminate many of the frustrations food truck vendors face on the job.

How do they plan to accomplish that? Through a couple of apps, of course.

The consumer-facing Bistro Planet app is what you might expect: it saves customers time and guesswork by letting them locate trucks in real time, then places, pay for, and track an order all in one place.

The Bistro Connect app, however, is the real game changer, promising to unite a historically fractured industry riddled with inefficiencies. Through Bistro Connect, food truck operators can view all available lot space in their city, book a location, and pay for it then and there. That location then gets broadcast to customers via social media, eliminating, for example, any questions about where to find the chicken and waffles truck that day.

From there, vendors use the app to notify users on their orders, manage and update menus, and process payments through a POS system designed specifically for food trucks.

Bistro Planet launched in June of 2017 in Los Angeles—the birthplace of food trucks. It’s since served over 10,000 users and seen the number of participating trucks rise to around 250. A recent expansion into all of Orange County, California suggests both those numbers will rise very soon.

Part of the company’s success can be attributed to the holistic approach Edery and Klempner took when they decided to tackle this particular market. Rather than focus on improving individual trucks, they designed Bistro Planet to change the entire market.

And they’re not alone. A growing food truck industry has attracted entrepreneurs looking to make trucks more tech-savvy and solve problem areas of the business. Square is the obvious competitor of Bistro Planet when it comes to POS systems. Tursus Software’s Food on a Truck (FOAT), in addition to offering schedule management and analytics, helps protect businesses from being held liable for fraudulent credit card charges.

Meanwhile, mobile reporting platform FreshCheq tracks temperature consistency and other food-safety tasks, then automates a report operators can share on the inevitable health department visit.

How all these different technologies will work together in the future remains to be seen. What is clear, however, is that technology’s role in the food truck business is only going to grow more important as demand for food truck cuisine increases. Maybe the biggest challenge business like Bistro Planet face is getting owners and operators to understand why they should shift their approach towards a more tech-savvy business model, be that automated health department reports or more secure POS systems. Owning a food truck is always going to have its challenges and roadblocks. But for those who join the efforts in using tech to unite the industry, that $85,000 spent on a truck looks to be a solid investment for the future.

The Year in Food Delivery

Despite a distinct cooling off of investment in the food delivery space this year, some big names like Uber, Google, and David Chang threw their hats in the ring.

That’s because the online food delivery market is estimated around $210 billion, with companies like FreshDirect raising $189 million in the past 12 months. It’s become such a pervasive part of our way of life that Google even added a food-delivery shortcut to Maps. And there are plenty of food-delivery crowdfunding projects to go around.

But enough with the numbers. Here are the highlights in this space over the past 12 months.

More Big Players Joined the Party

This year everyone wanted a piece of the pie. Google started to ship fresh food to customers in California through Google Express. Instacart and the Food Network launched a meal-kit delivery service, and Square acquired startup Maine Line Delivery in Philadelphia to boost Caviar. Meanwhile Facebook and Foursquare made it easier to order food from within their apps through Delivery.com.

NYC darling chef David Chang decided to blow up the entire idea of a nice restaurant by launching Ando, a restaurant that only does deliveries, and he raised the bar on delivery food everywhere by launching Maple, his own delivery service that promises a daily delicious menu.

Plus, where would the year be without a few gimmicks? Taco Bell and Whole Foods both came up with ChatBots that help you order food or suggest recipes, respectively, solely through the power of emojis. And Domino’s will now let you order pizza with one tap on your Apple Watch.

The Year of UberEats

So far I haven’t mentioned the biggest player, though: Uber. The company has had quite the year in food delivery. It shut down Instant Delivery in New York City, then launched UberEats in both the U.S. and London. Next UberEats drivers staged protests over the way the pay structure has been changed, and in November a courier filed a lawsuit against the company for missing food delivery tips. Yikes.

All of this commotion from big names and turmoil within UberEats suggest that the food delivery space is still young enough that no one has solved some of the primary problems within it. Companies are grabbing on to any stronghold they see (emojis! self-driving trucks! drones! more drones!), without regard to the longevity of the solution. Uber has faced the brunt of this fast-paced growth, but we expect to see more struggles in the coming years for other players as well.

Eat Local

This year the quest to eat healthily expanded even more into food delivery. Whole Foods hinted at a “meal solution spectrum” with some sort of delivery component in the future. Good Eggs, which many thought was defunct by this point, rose from the ashes with a $15 million round of funding to help it deliver local, quality food.

And Amazon, never one to be shown up, expanded its Amazon Fresh program to Boston, among other major cities. The difference here is that Boston customers can shop from local markets, a feature that we imagine will be implemented elsewhere if it’s successful in Beantown.

You Say Potato, I Say Share Economy

In such a young and moneyed space, different business models are flying around faster than those drones I mentioned earlier.

Some want to deliver fresh ingredients to customers to help simplify cooking at home. Juicero, for example, delivers prepackaged ingredients for green juice, made in its blender that doesn’t even require cleaning. Similarly, Raised Real wants to deliver ingredients for homemade baby food, thereby making it that much easier to make your baby’s food from scratch (sounds ambitious to me).

Speaking of raising babies and tapping new markets, Drizly raised $15 million for its liquor delivery service, among other parts of its ecommerce model. And DoorDash added alcohol to its food delivery options in California (what about the rest of us?!).

Meanwhile Foodhini calls itself a “for profit social enterprise” and delivers ethnic food made by immigrant chefs: Foodhini and the chefs each receive $2.50 from each meal, after costs.

And BringMe wants to out-Uber Uber by combining delivery with the share economy in Fairfax, VA, enlisting regular folks to deliver food as “bringers.” There are already a few models out there like this, such as Favor in Texas and Tennessee, and we expect to see more too.

Of course, while all of these business models are innovative and interesting, none of them beat the ultimate and original delivery food: pizza.