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Daily news and analysis about the food tech revolution

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Restaurant Tech News Pod: Web3 Restaurants, Sweetgreen Robots, Subway Smart Fridge

Last week I caught up with Expedite’s Kristen Hawley to talk about some of the recent happenings in the world of restaurant tech.

Some of the stories we talked about on this episode include:

And more! You can listen to the podcast below or find it on Apple Podcasts or wherever you get your podcasts.

Subway Debuts Smart Fridges To Sell Pre-Made Sandwiches

Can you ‘Eat Fresh’ from a vending machine?

Subway believes you can, and to that end, the sandwich franchiser has begun to roll out a new line of smart fridges in the US to sell premade Subway sandwiches. The new fridges feature “artificial intelligence and natural language processing” and are restocked daily with sandwiches from local franchisees. The new line of vending machines is a part of the company’s growing focus on non-traditional formats to target “on-the-go” customers.

Subway’s New Smart Fridge

The first smart fridge from Subway showed up this September at the University of California San Diego. According to the company, the initial feedback has been strong among franchises to install the new fridges near their stores.

While the UC San Diego fridge was the first Subway vending machine to show up in the states, the company began experimenting with vending machines last year in Singapore. The Singapore machines were also supported by Grab & Go but looked a little closer to a traditional vending machine than the newly introduced smart fridges.

In an interview with QSR Magazine, Subway’s senior VP of development Steven Rafferty said the franchisees drove the push into unattended retail solutions.

“The partner says, ‘Hey, how can we maximize our sales even in the hours when we’re not open?’” Rafferty said. “We had some success with limited trials of this in international markets, in some Asian markets specifically. But closer to home, as I said, travel plaza partners have really latched on to this and it’s really meeting the needs of our customers who are our franchisees who in turn want to meet the needs of our consumers.”

I like the idea of the Subway machines and could see them finding traction, especially in public spaces where no fresh options are available. I’d like to see the new machines offer non-sub menu options like their non-bread bowls, which could provide customers with a nice option beyond carb-heavy sandwiches.

While Subway doesn’t mention hardware partners in their announcement, I’d be surprised if they didn’t work with a technology partner to develop the fridges. If one of our Spoon readers knows who Subway may have worked with to build their fridge, drop us a line and let us know.

According to Subway, their new smart fridges will begin appearing at college campuses, airports, and hospitals. Interestingly, the company’s announcement emphasized Subway’s focus on exploring non-traditional formats, including ghost kitchens. If the unattended business begins to take off, I could see how some franchisee partners may forgo the traditional store format and build ghost kitchens to support a network of unattended offerings in their market.

Food Tech News: Virtual Restaurant Accelerator Progam Launch, Mycelium-Based Adidas Shoes

Welcome to our weekend wrap-up of food tech news from around the web.

Happy New Year! I am excited to both say goodbye to the most bizarre year of my life and share some Food Tech News with you. This week, some news pieces that stood out to us included a new accelerator program for virtual restaurants, Adidas shoes made from mycelium, a vegan-friendly Subway sub, and how you can support New York restaurants with a T-shirt.

An accelerator program for “pandemic-proof” virtual restaurants

The Melon Kitchen Food Entrepreneurship Accelerator will be opening a culinary program to Black and Latinx entrepreneurs to assist in the launch of new virtual restaurants. The program will begin in mid-January and take place at AMP (Artisinal Marketplace) in the tech district of Indianapolis. It is a free three-month program that will accept several cohorts consisting of five to seven participants. Through the use of ghost kitchens and delivery through DoorDash, the program aims to build “pandemic-proof” virtual restaurants. The marketplace will open to the public March 2021, and participants are eligible for start-up funding after the completion of the program.

Photo from Bolt Threads’ website

Adidas shoes made from mushroom leather

Adidas announced that they will be launching vegan-friendly shoes made from mycelium-based leather; mycelium is essentially the root system of mushrooms. To produce this new shoe, the company partnered with sustainable materials producer Bolt Threads, which created a mycelium-based leather called “Mylo“. It is currently unclear when the new Adidas shoes will be available for purchase.

Vegan chicken subs at Subway

Now available at Subways in the UK and Ireland, the T.L.C (tastes like chicken) Sub uses soy protein chicken strips to mimic the company’s classic roast chicken breast strips. The new sub will be fully vegan and will also use Violife vegan cheese. The new menu item was added on December 30th, and it is not yet determined if it will be a permanent menu item. Subways located in the UK permanently added a Beyond Meatball Marinara Sub this year, and last year the same sandwich was trialed in the US and Canada.

Morning News clothing company launches T-shirt to support NY restaurants

Clothing company Morning News launched a T-shirt to help struggling local restaurants in New York. The back of the 100 percent cotton T-shirt reads “Support Your Local Restaurants” in hopes of encouraging residents of the state to remember to do so. Additionally, 40 percent of the proceeds from T-shirts will be donated to restaurant owners and employees through ROAR (Relief Opportunities for All Restaurants). Big cities like NYC have experienced a greater number of closures due to the high cost of rent, and over 1,000 restaurants have permanently closed here since March 2020.

Food Tech News: New Growth Medium for Cultured Meat, Pepsi’s Plastic-Free Promise

As winter quickly approaches, COVID-19 restrictions resurge and stay-at-home orders seem like they’re in the near future. If you’re like me, you might be trying to decide which new kitchen project you want to take on. I perfected my kombucha process in March and even experimented with alcoholic booch (it was terrible). Should I try my hand at vegan donuts or croissants this time around? Sauerkraut or kimchi?

With many of us being stuck indoors once again, it might be a perfect time to catch up on some Food Tech News. This week we have news on the development of a new growth medium for cultured meat cells, sustainable Pepsi bottle packaging, Good Catch’s expansion into Europe, and Subway’s new online catering platform.

Innovate UK funds development of new growth medium for cultured meat

Centre for Process Innovation and 3D Bio-Tissues, a start-up from Newcastle University, have partnered and received grant money from Innovate UK to make cultured meat animal-free while simultaneously reducing the cost of developing it. The project aims to replace the most common growth media used to culture animal cells, called fetal bovine serum (FBS). There is a morality issue with FBS, as it is extracted from slaughtered pregnant cows in the meat and dairy industry. The new serum will likely be developed from agro-industrial byproducts, which would then remove the use of animals and then solve the ethical issue that FBS poses.

Pepsi to go 100 percent plastic-free in several European markets by 2022

PepsiCo announced this week that it will be transitioning to use recycled post-consumer plastics for its Pepsi bottles in several European countries. By 2021, Spain, Greece, Poland, Germany, and Romania will have 100% rPET(recycled polyethylene terephthalate) Pepsi bottles. France, Luxembourg, Belgium, and Great Britain will make the switch by 2022. The company estimates that this change will save around 70,000 tons of single-use plastic a year.

Good Catch expands to Europe

Good Catch, producers of plant-based seafood, expanded its products into the European countries of Spain and the Netherlands this week. The company’s vegan tuna, fish burgers, and crab cakes are now available in 70 different stores throughout the Netherlands and in the specialty chain Sanchez Romero in Madrid. This news follows Good Catch’s recent expansion into Canada in October and the launch of the company’s D2C platform last month.

Subway launches online catering platform

Subway announced the launch of its new online catering platform that is provided by ezCater, an online marketplace for business catering. The new platform aims to offer a convenient way to place large orders for employee lunches and company events. This new feature is now available at every Subway located in the US.

Swipe Right for Double Guac, Chipotle Just Created a Virtual Assembly Line (Other Restaurants Should Too)

As restaurants slowly reopen with reduced capacity and more emphasis on takeout orders, one thing we will see more of is restaurant chains using tech to better customize meals purchased through mobile apps. So it should come as little surprise that Chipotle, a company known for its digital-forward business model, just released a bunch of new customization features to its app that effectively recreate the assembly line experience customers get in brick-and-mortar locations. The company announced today its Complete Customization Chipotle app, which lets customers get pretty granular about ingredient preferences and portions in their meals.

To be clear, Chipotle hasn’t released a brand-new app; all updates are to its existing one, and nothing’s changed about the way customers sign in and access menus, loyalty points, etc. Changes are more about the way customers select and customize their meals in the digital format, which Chipotle seems to hope will mirror the real world experience as much as possible.

Chipotle’s in-store format has always involved customers moving down an assembly line-style setup, dictating to staff what they want in their burritos and/or bowls, how much they want of each ingredient, and any other special instructions. The setup has always made it super-easy to customize a meal — at least, so long as you ordered that meal in the store. Up to now, the Chipotle app has been somewhat limited in terms of customization.

The features released today change that. Customers can now swipe left and right in the app to designate how much of each ingredient they want with their meal. For example, meat portions can be single or double and ingredients like salsa and sour cream can be “normal,” “light,” or “heavy.” In general, the app is now just easier to use.

While on the surface these might appear to be small changes, they actually suggest how certain restaurant types could survive in a post-pandemic restaurant industry. Per state reopening guidelines, person-to-person contact should be minimal as possible, and long lines of people waiting for their turn at the assembly station will be frowned upon if not outright banned. Offering the digital equivalent will let customers order exactly what they’re used to getting from the chain while still satisfying the requirements for social distancing.

Digitizing the assembly line is also a way for Chipotle to drive more orders to its app, which is important for a company with a future tightly tied to its digital business. That digital business surpassed $1 billion in sales in 2019, and Chipotle has also recently introduced new store formats (walk-up locations, drive-thru lanes) that lend themselves to digital and off-premises ordering. The pandemic hasn’t slowed that growth. Chipotle reported its highest quarterly level ever for digital sales on its Q1 2020 investor call in April. “As people started to implement social distancing, we moved swiftly by driving further investments toward digital and delivery designed to reduce friction, while increasing convenient access,” Chipotle CEO Brian Niccol said on the call. 

Advanced customization tools at QSRs and fast-casual restaurants have been a priority for some time now, with some chains — McDonald’s, Starbucks — implementing AI tools to improve personalization. But using customization to recreate in-store experiences that might otherwise go the wayside could be where customization proves itself most valuable. It’s easy to imagine chains like Subway or Blaze Pizza increasing the customization capabilities of their apps to recreate their own assembly line experiences. It might even breathe a little life back into the buffet, which is dying a painful death at the moment, by making the self-service aspect of that format virtual.

All those things cost money, which restaurants don’t have a lot of right now. Any mobile restaurant app is expensive to build in house; including sophisticated customization tools would be prohibitive for most businesses, which creates an opportunity for restaurant tech companies looking to prove their own worth in these uncertain times. 

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

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Week in Restaurants: Regulators Are Coming for Delivery, Denny’s and Yelp Team Up

Happy Valentine’s Day, food techies. If you haven’t run away to Las Vegas yet to get hitched at a Denny’s, there’s still time.

But speaking of Denny’s, the chain announced a new pilot with Yelp this week. Elsewhere in the restaurant world, Subway is now using Olo’s technology to handle delivery orders, and if you want more intel on the demise of Zume’s vision for mobile pizza kitchens, read on.

Yelp Pilots a New Feature to Measure In-Store Visits

Yelp this week launched Yelp Store Visits, a metric meant to help restaurants and other stores measure how online activity on Yelp drives customer visits to physical locations. The opt-in tool is available to businesses with multiple locations and meant to help them increase foot traffic to their physical stores. The company also introduced Showcase Ads, which lets multi-unit brands highlight special deals and promotions via video ads to Yelp users. Denny’s piloted both tools in 2019 and saw positive results. 

Subway and Olo Partner for Integrated Delivery

Subway announced a partnership with Olo to integrate digital orders directly into its POS system, making it easier for the sandwich chain to process and fulfill off-premises orders coming from multiple sales channels. With Olo’s technology, orders coming from third-party services like Grubhub or Postmates go directly into the restaurant’s main POS system, removing the need for an employee to manually input the information into the ticket stream and lowering the risk of human error when it comes to order accuracy.

Regulation Is Coming for Third-party Delivery

It’s no secret that people are getting fed up with third-party delivery services’ Wild West tactics. Now regulators are stepping in, proposing legislation meant to check some of the practices companies like DoorDash and Grubhub employ that often don’t seem to benefit anyone but themselves. This week alone, California and Rhode Island introduced legislation, and Nation’s Restaurant News rounded up a few more states that are also taking third-party delivery to task, which could change the way the model operates in future. Read the full list here.

Inside the Fall of Zume’s Robot Pizza Delivery

Zume, a startup famous for its pizza-making robots, made headlines in January when it announced it was laying off 360 staff members and facing challenges securing more funding from investor Softbank. What happened to the once-promising startup? An article from Bloomberg Businessweek goes into the details of the startup’s evolution and how it landed in its current predicament.

A Snapshot of the 6 Biggest Fast Food Companies’ Sustainability Pledges

Environmental issues are no longer an invisible threat. With temperatures warming, oceans are heating up and extreme weather events such as hurricanes and forest fires, as we’re currently seeing in Australia, are happening more frequently.

There’s only so much individuals can do to lessen our impact on the warming planet, including flying and driving less and cutting back on meat. It’s on governments and businesses, especially corporations, to stave off catastrophe.

As we start off a new decade, let’s take a look at the sustainability pledges of the top fast food companies by revenues. As emissions that result from meat and dairy production are on track to contribute 70 percent of the total allowable greenhouse gas emissions by 2050, the BBC reports, fast food chains’ decisions have a lot of impact on the planet, although most pledges have centered around packaging. As some of the largest brands on the planet, these moves will not only cut back on climate change causing emissions and pollution, but provide an example to other businesses.

1. McDonald’s

The world’s biggest restaurant company in 2018 was the first fast food company to commit to sustainability. McDonald’s pledged that by 2025, “100 percent of McDonald’s guest packaging will come from renewable, recycled, or certified sources,” and also “to recycle guest packaging in 100 percent of McDonald’s restaurants.” For this year, it also set a goal that “100 percent of fiber-based packaging will come from recycled or certified sources where no deforestation occurs.” The company has also invested in a wind farm and a solar farm that it said will produce “more than 2,500 McDonald’s restaurants-worth of electricity.” As far as plant-based options, the Golden Arches is expanding its Beyond Meat test in Canada.

2. Starbucks

According to the coffee giant, “an estimated 600 billion paper and plastic cups are distributed globally,” and Starbucks accounts for an estimated 1 percent of that total. It has set a goal to “double the recycled content, recyclability and compostability, and reusability of our cups and packaging by 2022.” It plans to phase out straws this year. (A small competitor of Starbucks, Blue Bottle, plans to eliminate disposable cups entirely.) Starbucks, which said it has invested in renewable energy, has also set a goal to design, build and operate 10,000 “Greener Stores” globally by 2025. Starbucks offers several plant-based milks, and is expanding its lineup of non-dairy drinks.

3. Subway

The sandwich company hasn’t made any specific pledges, and pins a lot of the responsibility of energy conservation on its franchise operators. Subway offers a meatless Beyond Meat meatball sub. The company says its paper products, including towels, tissues and napkins, are made from 100 percent recycled material. As for the rest of its materials, including cups, wraps, bowls and lids, Subway makes no further commitments to make them more sustainable.

4. Chick-fil-a

The popular chicken restaurant that closes on Sundays also hasn’t issued any major sustainability pledges. The company said last year it is “thoughtfully searching for sustainable design solutions that are recyclable, compostable or contain recycled content — starting with new bowls” made of recyclable PET plastic. Chick-fil-a has committed to reducing construction waste for its new locations. The chain offers no plant-based options.

5. Taco Bell

The Mexican-inspired food chain is the latest to issue a big sustainability pledge. It has committed to “making all consumer-facing packaging recyclable, compostable or reusable by 2025 worldwide,” as well as adding recycling and/or composting bins to all restaurants, “where infrastructure permits.” Last year, it committed to more sustainable beef. Taco Bell has long featured vegetarian and vegan options, and recently made them more prominent on its menu.

6. Burger King

The other burger chain also hasn’t set any firm sustainability commitments for the decade. Rather, it said it will “continuously review our policies on animal welfare, sourcing and environmental impact to ensure that we remain good corporate citizens in the communities we serve.” The company, responding to a Change.org petition, said it will stop giving out plastic toys, but only in the U.K. At least you can get the Impossible Whopper at every U.S. store.

Of course, the companies who did make pledges are not beholden to them. It’s up to investors and consumers to hold each company responsible to do their part to reducing their contributions to climate change.

If any company updates their pledges, we will revisit and update this article.

Subway Partners With Beyond Meat for Plant-Based Meatball Sub

Subway joined the growing number of QSRs offering plant-based meat options this week, announcing a new partnership with Beyond Meat.

The two companies will start testing the Beyond Meatball Marinara sandwich, a plant-based take on one of Subway’s classics, in September, according to a press release. The sandwich will be available in 685 Subway restaurants for a limited time in the U.S. and Canada. Subway didn’t specify how limited that time would be or what happens afterwards. Presumably, the Beyond Meatball Marinara will be available as long as supplies last, and its expansion will depend on how popular the sandwich proves during this testing phase.

Subway is the latest fast-food outlet to start offering a plant-based option on its menu. At the end of last month, Beyond added a partnership with Dunkin’ to sell plant-based breakfast sandwiches in NYC. Beyond also has menu items at chains like Del Taco and Carl’s Jr., as well as a strong retail presence in grocery stores. The company even launched a new ground-beef-like product at Whole Foods earlier this summer.

Impossible, meanwhile, is set to do a nationwide rollout of its Impossible Whopper at Burger King this week. The company, who is Beyond’s chief rival, already works with White Castle as well as some non-burger chains like Qdoba and Little Caesar’s. Impossible is also (finally) heading to retail stores this September.

Given the surging popularity of both Impossible and Beyond, we can expect the list of QSRs testing out plant-based options like these to keep growing throughout the rest of the year.