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Yum Brands

A Few Thoughts on Yum’s Dragontail Deal

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Greetings from Eastern Kentucky, where I’m taking a quick breather from the restaurant world and am off to tour AppHarvest’s high-tech greenhouse.  

But first, a few quick thoughts on the recent Yum! Brands acquisition of Dragontail Systems, which was announced at the end of last week. In case it wasn’t clear already, Yum — parent company of Taco Bell, KFC, Pizza Hut, and The Habit Burger Grill — has big ambitions when it comes to its technology plans. The Dragontail deal suggests that a big chunk of that ambition is to enable better delivery at its restaurants. 

Australia-based Dragontail Systems is known around the restaurant biz for its AI-based workflow management system for kitchens. The system can process a restaurant’s incoming orders, manage each food item’s cook time so that it’s ready when the delivery driver arrives (not before or after), assist with managing and scheduling drivers, and provide real-time updates. In the past, restaurants have also used Dragontail’s AI-based camera to assess food quality and ensure safety and cleanliness standards in the kitchen. 

Dragontail is Yum’s third major technology acquisition so far in 2021. Earlier in the year, Yum acquired AI firm Kvantum to assist with its marketing campaign analytics, and Tictuk, which makes omnichannel ordering software that lets consumers place orders via social media, SMS, email, and other formats.

The Dragontail Acquisition, is hyper-focused on improving delivery operations, and pizza delivery in particular. Yum said it already has Dragontail installed in roughly 1,500 Pizza Hut stores across 10 countries. If a wider implementation of the tech is successful, Yum will eventually install the tech further around its Pizza Hut locations, and eventually across all its brands. 

Of course, Dragontail originally debuted its system at a Domino’s location in Australia, so Yum’s bid to buy the company is at least in part a way of competing. I doubt fighting Domino’s is the only motivator, though, as the deal seems aimed at a larger move to make food preparation more efficient at Yum restaurants.

Restaurant kitchens have always operated in a kind of orchestrated chaos, but with many businesses still struggling in the wake of last year’s events, efficiency is everyone’s favorite word right now. On paper, Dragontail’s capabilities sound easy: managing drivers’ arrivals and departures, determining more precise fire times for each food item, assessing the quality of the food more precisely. But as anyone who’s ever worked in a restaurant kitchen knows, getting one detail wrong can set off an entire chain of mishaps that lead to lower-quality food, unhappy customers and, in the end, lost money. With the Dragontail acquisition, Yum is placing its bets on tech to help the company avoid that scenario. 

Plant Power Fast Food Chain Raises $7.5M Series A – The San Diego, California-based all-vegan chain trying to redefine the concept of “fast” food said it will use its new funding to continue its expansion plans and focus on new corporate unit development.

7Shifts Raises $21.5M for Its Workforce Management Platform for Restaurants – The company will use its $21.5 million Series B round to add new features that simplify the process of managing, scheduling, and communicating with restaurant workers.

Square’s Back-of-House Display System Now Available for Delivery-Only Restaurants – Payments company Square recently made its restaurant software stack a little more versatile when it launched its Square KDS back-of-house display system as a standalone item available via subscription.

Yum Brands to Reduce Greenhouse Gas Emissions by ‘Nearly 50%’ by 2030

Restaurant operator Yum Brands announced today its plans to cut greenhouse gases 46 percent by 2030 in partnership with its franchisees, suppliers and producers. The company, which operates Pizza Hut, KFC, Taco Bell, and the Habit Burger, also said today it plans to achieve net-zero emissions by 2050.

In a statement, Yum said it is “working closely” with its brands, franchisees, and suppliers on these goals, with a plan to focus on emission reductions at both corporate and franchise restaurants, as well as throughout its supply chain. 

Its restaurant brands have already kickstarted a few different initiatives that support its goal. Right now those include:

  • Investing in green buildings: KFC is investing in green buildings in Malaysia, South Africa, and the U.K., with “promising results.” For example, KFC reported 18 percent overall energy savings in Malaysia. 
  • Accelerating renewable energy: By the end of this year, Yum will transition 1,000 of its restaurants to renewable energy. The company has not yet specified which restaurants and where, though it has piloted renewable energy programs at KFC Australia in the past, and in 2020, it moved corporate offices in the U.S. to renewable energy.
  • Collaborating with climate-forward partners: Yum said it joined the Renewable Energy Buyers Alliance (REBA), an alliance of large energy buyers, energy providers and service providers this year. 

Yum is just the latest high-profile restaurant company publicizing its sustainability goals. Back at the start of 2020, Starbucks announced its own plan to cut carbon emissions, water usage, and landfill waste in half by 2030. (The company is also trialing a reusable cup program in Seattle.) Chipotle just diverted 51 percent of its waste, according to the company’s latest sustainability report. It’s also tying sustainability goals to some executive compensation. Dunkin’, meanwhile, introduced food waste and composting programs in March of this year.

The sheer reach of Yum’s restaurant brands — over 50,000 restaurants in more than 150 countries and territories — means its efforts could have significant influence on the restaurant industry as a whole as sustainability becomes a more urgent priority to address.

Beyond Meat Going More Mainstream with McDonald’s, Yum Brands Deals

Beyond Meat announced global distribution deals yesterday with McDonald’s and Yum Brands (KFC, Pizza Hut, Taco Bell) that will help push plant-based meat further into the mainstream.

Beyond and McDonald’s had previously revealed that they were working together on the appropriately named “McPlant” sandwich back in November. The McPlant debuted in 2019 in Canada and is currently being tested in select markets around the world. The two companies will extend their collaboration beyond plant-based burgers, as the McPlant is actually a “platform” for a variety of different products. Beyond will work with Mickey D’s to create plant-based options for chicken, pork and egg.

Likewise, Beyond’s deal with Yum Brands builds on an existing collaboration between the two companies. KFC introduced the plant-based Beyond Fried Chicken in Atlanta in 2019, and has since expanded that pilot to other U.S. cities. Last year, Pizza Hut launched the Beyond Italian Sausage Pizza and Great Beyond Pizza nationwide.

Beyond has been on a bit of roll with high-profile partnerships this year. Last month Beyond partnered with PepsiCo to form the PLANeT Partnership joint venture that will develop plant-based snacks.

All of these deals are obviously huge news for Beyond Meat, specifically, as it looks to grow its plant-based empire. It also alters the competitive landscape with its plant-based burger rival, Impossible Foods. Throughout 2020, Beyond and Impossible made back-and-forth news announcements around expanding retail, launching direct to consumer channels, and restaurant partnerships. For its part, Impossible, which launched its burgers at restaurants, has deals with Burger King, White Castle and Starbucks here in the U.S.

But Beyond’s expanded partnerships with giants like McDonald’s, KFC, Taco Bell and Pizza Hut is perhaps even bigger news for plant-based meat in general. Though sales of plant-based meat are on the rise and steadily gaining traction, being on the menus of these huge, global QSR chains will help give the entire sector a massive boost both in terms of sales and recogntion.

Beyond Meat Deal Expands its China Footprint with KFC, Pizza Hut and Taco Bell

Yum China Holdings announced a deal yesterday to bring Beyond Meat’s plant-based burgers to select KFC, Pizza Hut and Taco Bell stores in mainland China for a limited time this month. The move expands Beyond’s presence in China, which has been a priority for the company.

As part of the deal, KFC and Pizza Hut will both offer the Beyond Burger, while the Taco Bell locations will offer a taco made with Beyond meat. All three restaurants are offering the plant-based alternatives for just a limited time.

The Yum deal follows a similar partnership Beyond announced in April, when Starbucks in China added three dishes made with Beyond’s meat product. Beyond has a particular focus on Asia and has a goal of producing its plant-based burgers in the region before the end of this year.

All of these QSR deals help Beyond establish a foothold in China before its rival, Impossible Foods has a chance to do the same. China is something of a holy grail for plant-based meat companies. As we explained last year:

  • China has the largest population in the world
  • China produces the most meat in the world
  • China consumes the most meat in the world, and its hunger for protein is growing

Additionally, pork is the most consumed meat in Asia, and earlier this year Impossible debuted its plant-based pork product at CES.

We can expect to see Beyond make more deals like the Yum one in the coming months. And for it’s part, Impossible has been ramping up production and its retail presence here in the U.S. over the past year, and seems to be prepping a direct to consumer sales channel.

Plant-based meal sales were already skyrocketing, and that trend isn’t likely to ease up as the COVID-19 pandemic has raised new questions about the health and safety of eating animal-based meat. The business of faux burgers is very much real.

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

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

Panera Launches Unlimited Coffee Subscription

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

NYC Introduces Six Bills to Regulate Food Delivery

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

Yum! Brands to Phase Out Polystyrene Packaging

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

Taco Bell Launches Nationwide Delivery With Grubhub

Today, Taco Bell announced an expanded partnership with Grubhub for nationwide delivery.

The news comes a year after Taco Bell parent company Yum! Brands bought $200 million of common stock in Grubhub and started testing delivery in a limited number of markets. With the nationwide expansion, delivery is now available at roughly 65 percent of Taco Bell locations (via Grubhub, of course).

For the nationwide rollout, the two companies reportedly worked for months to directly integrate Grubhub into Taco Bell’s POS system. An integration like that means (hopefully) fewer inaccuracies on delivery orders, since workers won’t have to take an order then manually rekey it into a Grubhub tablet, as is the usual process for restaurants. The integration is Grubhub’s largest to date.

It won’t hurt Grubhub’s ongoing expansion, which is currently stretching to second- and third-tier U.S. markets (aka smaller cities). Grubhub has reportedly increased its fleet of drivers to accommodate the Taco Bell deal, which will reach many of those smaller cities.

Taco Bell has some serious growth plans in the works. Besides expanding its delivery program, the Irvine, CA-based chain plans to grow to 9,000 stores worldwide by 2022. The company will also install self-service kiosks in every U.S. restaurant by the end of 2019. Two years ago, that might have seemed like a risky business decision. But kiosks are everywhere these days, it seems, from trendy food halls to McDonald’s.

Taco bell also plans to start testing vegan and vegetarian menus in 2019. While the chain already offers some vegetarian combos, this will be the first dedicated menu for meat-free and vegan options.

That will happen a little later in 2019. In the meantime, the chain will celebrate its nationwide delivery launch by dropping the delivery fee on orders of $12 or more for a limited time.

KFC Will Convert to Renewable Plastic Sources By 2025

KFC announced today it plans to eliminate non-reusable, plastic-based packaging from its supply chain by 2025, Nations Restaurant News reports.

To meet that pledge, the chain will work with suppliers worldwide to identify alternative plastic sources for items like lids, cutlery, straws, and plastic bags. Additionally, the chain said via press release it will conduct audits of its franchises current systems to find areas for reducing plastic waste. Though the chain hasn’t said what could potentially replace plastic, KFC franchisees will be able to create their own sustainable packing agenda, so materials could vary based on markets.

“With environmental sustainability as a core aspect of how we do business, this commitment represents a public acknowledgment of the obligation we have to address these serious issues.” KFC CEO, Tony Lowings, said in the press release.

Some KFC stores have already taken large steps in the direction of cutting down on plastics. In 2018, the company stopped offering lids and straws for drinks at 84 of its Singapore locations — though that only applies to customers eating at the restaurant. Locations in France and Romania, meanwhile, are looking to replace plastic straws with paper ones.

KFC’s pledge follows similar moves by the likes of McDonald’s and Starbucks to reduce single-use plastics. In January of 2018, McDonald’s announced its goal of having 100 percent of its restaurants use fully recyclable packaging by 2025. Also in 2018, Starbucks launched its open-source “Greener Stores” initiative, of which reducing waste is one part. Prior to that, the coffee giant had announced it would eliminate single-use plastic straws from more than 28,000 locations by 2020.

Like those chains, KFC’s reach is wide, as the company operates 22,000 restaurants in 135 countries across the globe. It’s also involved in the the NextGenCup Consortium, a partnership amongst food-service leaders to address the 250 billion cups produced annually that wind up, for the most part, in landfills. Working with partners like McDonald’s, Starbucks, The Coca-Cola Company, and KFC’s parent company, Yum Brands, the consortium fosters innovation towards finding a more sustainable cup design for quick-service restaurants.

Finding the perfect cup and then getting it into stores will be something of an uphill battle, given the dizzying inconsistencies over what can be recycled where, not just in the U.S. but worldwide. You also have to get consumers to actually recycle, which sounds like a no-brainer but will be a challenge, given that, in the U.S., 91 percent of plastic isn’t recycled.

Still, it’s nice to see mega brands signing on to make steps towards change. I expect we’ll hear more rumblings around this in the coming months, and 2020 so far looks to be the year major change starts happening when it comes to finding more sustainable ways to do quick-service food.