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The Spoon

Daily news and analysis about the food tech revolution

Square

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.