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Zume

A Food Tech Case Study: Four Lessons From the Demise of Zume

Late last week, news broke that Zume, the company famous mostly for raising a whole bunch of money for its pizza robot & cook-on-the-road food trucks concept, had shut down. The company’s demise, first reported by The Information, comes after burning through $450 million and a well-documented pivot away from its pizza robot and delivery technology products to sustainable packaging in 2020.

Here at The Spoon, we’ve followed Zume since its inception and even had its CTO speak at our event just months before the company laid off 500 employees and dropped its automation business.

When Zume inevitably shows up in business school case studies in years to come, here are a few lessons we can extract from the company’s journey:

Startups Should Pick One Thing To Be Good At

You always hear startup founders talk about how important it is to focus, partly because their first product needs to be really good, but also because distractions can keep a team from executing the way they need to execute. Zume was trying to reinvent both food making and food delivery, which meant they were basically running two highly capital-intensive startups in one. They were early enough at pizza automation to have a shot at success, but then they made their job infinitely more complicated by also trying to create an entirely new kind of delivery truck complete with built-in ovens. That’s a lot of time and capital to achieve marginally fresher pizza.

Creating Custom-Designed Delivery Fleets (with Built-in Cooking!) is an Expensive Fool’s Errand

We don’t just have Zume to prove this, but also Wonder, a company that decided they would differentiate by creating an entirely custom-built delivery fleet in which the food was cooked after it left the kitchen. Both of these companies burned through hundreds of millions of dollars and, in the end, realized that they probably should not have invested all that investor capital in something other companies are pretty good at (delivery) just to make sure the food was maybe a little fresher by the time it got to the customer’s door.

Pivots Should be Somewhat Adjacent to Core IP

After spending years and hundreds of millions of dollars to build a food automation and delivery tech business, the company pivoted to a completely different business in sustainable packaging. The company, which had developed a fairly interesting realtime delivery intelligence platform in addition to a food automation platform, likely could have pivoted to a less-capital intensive business in either of these areas and continued to maintain momentum. Instead, they started over in a fairly crowded vertical and never got enough traction to make a go of it.

Tech Companies Rarely Succeed in Creating Customer-Facing Restaurant Businesses

Time and time again, we’ve watched as startups try to build the “restaurant of the future” and fail because building a consumer brand requires focus and capital, capital they don’t have because they’ve spent it all developing technology. Zume, Eatsa, Wonder, and others have shown it’s probably best to choose between being a technology company or a restaurant business, but probably not both. Some may point to Sweetgreen as something of an exception, but even they had to acquire a company in Spyce which had tried and failed to build a consumer-facing brand for their own restaurant robot technology.

Jet.com’s Founder Launches Wonder, a Logistics-Driven Bet on The Future of Restaurants

Today Marc Lore, the ex-CEO of Walmart.com and founder of Jet.com, formally announced the launch of Wonder, a ghost kitchen-driven delivery brand powered by high-profile chef recipes and cook-en-route delivery vans. The company currently is delivering food to four cities in Union County in northern New Jersey and has plans to expand to New York and beyond in 2022.

Wonder has reportedly raised an eye-popping amount of money for a company that only formally announced itself today. According to reports, the company has already raised over $500 million in capital, which likely means a valuation in the multi-billion dollar range. The impressive raise is due to Lore’s track record of building highly successful and disruptive e-commerce businesses. Lore’s Jet.com effectively became the core engine of Walmart’s e-commerce efforts once the retail giant bought the company for $3.3 billion in 2016.

The company has partnered with several high-profile chefs to develop recipes and lend their names to virtual restaurants that Wonder will turnkey. Seventeen restaurants and chefs have partnered with Wonder, including Bobby Flay, Nancy Silverton, Daisuke Nakazawa, and Marcus Samuelsson.

The company was founded in 2018 by Lore and was initially run by his brother Chad. However, in 2019, former Diapers.com exec Scott Hilton took over in 2019, and now, Lore – who had mainly been acting in an advisory capacity – is stepping as the company’s CEO.

According to a detailed report in Yahoo News, Wonder will utilize a licensing model that pays a one-time fee to chefs and will then operate out of a 40 thousand square food commissary kitchen where meals are assembled. Each chef’s restaurant brand is assigned its own delivery van, which is operated by a dedicated employee who responds to orders in the app. Once an order comes through, the runner begins preparing the meal in the Mercedes runner van custom-equipped with special oven. Meals are expected to arrive at the customer’s door within 30-40 minutes.

In some ways, the Wonder business is reminiscent of Zume, a one-time restaurant tech darling that also used a centralized production facility and cooked the food (pizzas in the case of Zume) en-route to the customer in a delivery truck. However, unlike Zume, Wonder’s oven-equipped vans take the food all the way to the customer’s door (Zume used a two-stage delivery network where scooters would deliver the pizza to the customer). Another major difference between the two is much of Zume’s focus was on building a robotic pizza-making machine, while Wonder utilizes in-house chefs to prepare their meals.

Lore’s vision of highly-centralized food production combined with a logistics network to reach the end customer is an evolutionary step forward from Zume and others, combining many of the various advancements we’ve seen in e-commerce, food delivery and ghost kitchen/virtual restaurant models over the past few years. While other regions like China have been developing highly-centralized food production and delivery models over the past decade, the US is beginning to play catch up via interesting new models built upon high-tech advances and an accelerated appetite for food delivery over the past couple of years.

While it’s too soon to say whether Lore’s new company will be as successful as his past, it looks like he has the capital, culinary partnerships and logistics know-how to give it a good run.

Our Ghost Kitchen Future Will Be Automated

Back at the Smart Kitchen Summit in 2019, Adam Brotman, the CEO of restaurant tech startup Brightloom, suggested if he was a young entrepreneur and wanted to start a restaurant business, he’d create a ghost kitchen powered by a food making robot.

I haven’t stopped thinking about this comment ever since.

The combination of food produced via robots with a ghost kitchen model makes so much sense, in part because both are new approaches that help reduce two of the most significant cost drivers of the legacy restaurant business: real estate and labor.

Consider the real estate costs of starting a new sit-down restaurant. Some estimates put the typical down payment required for the commercial space somewhere between $150 to $350 thousand dollars in a market like LA. And that’s before you even get to the cost of renovation and installing a new kitchen, which can cost up to a quarter of a million bucks.

And then there’s labor. A typical fast-food restaurant has to factor in about 25% of sales will go to labor. A fine dining restaurant will pay even more, often up to 40%. For a spot that generates a million dollars a year in top-line revenue, this translates to $400 thousand annually in labor expenses.

That’s a lot of money, and no doubt a big part of the reason about one-third of restaurants don’t make it in normal times, let alone in an era ravaged by a pandemic.

And so, in 2021, it’s not that surprising to see several groups experimenting with ways to combine the idea of new dark kitchen models with automation. Here are just a few:

Pizza HQ: The founders of Pizza HQ are experienced sit-down pizza restaurant operators, but they are betting the future on a robot-powered dark kitchen model. The company is creating a centralized pizza production facility in New Jersey that will utilize up to four Picnic pizza robots and also develop a network of smaller fulfillment centers around the greater northern New Jersey area.

800 Degrees: Another pizza chain, 800 Degrees, is betting its future on a combination of ghost kitchens and automated pizza production. The company is working with ghost kitchen operator Reef to expand to up to 500 ghost kitchens over the next few years, many of which will include Piestro’s robotic pizza kiosks.

Cala: This French company has created a unique pasta-making robot that enables both customer pick up and third-party delivery of its dishes. This model of automated production via kiosk as well as delivery will be a popular hybrid model that enables operators to tap into multiple customer dining revenue streams.

Hyper-robotics: Hyper has created a containerized robotic pizza kitchen that can plug into a dark kitchen model or be used in a hybrid ghost and delivery/consumer pick-up restaurant.

Kitchen United/Kiwibot: While Kitchen United hasn’t announced any deals automating their food production via robotics, the ghost kitchen pioneer has started experimenting with the use of delivery robots to ship food produced in their kitchens to customers.

Nommi: Nommi is a new joint venture creating a bowl-food robot that can be utilized in a variety of ghost kitchen formats. According to company president Buck Jordan, the company also plans to work on technology that could eventually hand robot-produced food to a delivery robot to create an “end-to-end” food robot model from production to the customer doorstep.

These are just a few examples, and we haven’t even gotten to the dozens of food robot startups building systems that could power food production in a ghost kitchen space. Companies like Beastro, Mezli, Middleby and others are working on self-contained food-making robots that could serve as enabling platforms for an entire new industry built around centralized automated food production made exclusively for digital orders.

One could argue the first company to try a robot-powered ghost kitchen model was Zume. The once high-flying startup raised hundreds of millions to create a roboticized dark pizza kitchen model to deliver pizza around the bay area using its high-tech oven equipped trucks. The company eventually shut down its robot pizza business, in part because like many pioneering startups, Zume never figured out an operating model that works (in retrospect, developing custom-built delivery trucks was probably an unnecessary use of venture funding).

But now, many of the companies following in Zume’s wake are building interesting and what looks like more sustainable businesses, in large part because they are working in partnership with restaurant operators who know the business and are savvy in building virtual restaurant businesses optimized to use third party delivery. While some of these models may eventually fail, it’s pretty clear that robotics and ghost kitchens are a combination that will play a big role in the restaurant industry’s future.

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.

UPDATED: Zume to Lay Off Staff

UPDATE: CNBC reports Zume is laying off 360 people and shutting down its pizza delivery service.

Zume, the startup famous for its pizza-making robots, is set to lay off 400 people, or 80 percent of its staff, according to a report from Business Insider (subscription required) yesterday. (See update above.)

According to Business Insider, the layoffs come as the company has faced challenges securing more funding from Softbank. Zume had raised $375 million from Softbank in November of 2018, and part of that deal was reportedly an additional $375 million investment from Softbank at a later date. Zume has raised $423 million in total to date.

Business Insider writes that the layoffs follow a number of executive departures from the company, including its CMO, general counsel, and vice president of talent, as well as the president of Zume’s original pizza business.

While Zume’s robotic pizza has typically grabbed all the headlines, the company was actually more of a data play. It claimed to be able to take tons of data like weather reports, purchasing history, and local sporting events to predict how many pizzas and what kind it needed to make in an evening. From there it would parbake and assemble the pizzas and cook them in a mobile oven on the way to being delivered.

The cook-on-the-go concept was later abandoned by the company in favor of parking mobile kitchens in designated neighborhoods in more of a hub-and-spoke model that only relied on drivers to deliver the pies over the last mile.

Zume had also placed big bets in 2019, launching a packaging business with the acquisition of compostable packaging company Pivot Packaging in June of last year, and launching a new program that was in essence a mobile ghost kitchen that restaurants could license. The first customer for that mobile ghost kitchen was &Pizza on the East Coast.

However, it looks like the money is drying up and Softbank, still dealing with WeWork’s implosion, is probably less inclined to throw more money into Zume if the returns aren’t there.

Right now, we don’t know where all the layoffs will hit and where Zume will focus its resources. Will it abandon pizza making to focus on selling packaging and licensing out its tech stack? We reached out to Zume to find out more information and will update this post as we learn more.

Spoon Market Map: Ghost Kitchens in 2019

Just half a decade ago, the phrase “ghost kitchen” referred to restaurants that looked legit on Grubhub and Seamless but were actually digital fronts for unregulated kitchens. In other words, chicken tenders from what appeared to be a local restaurant might actually have been cooked in someone’s apartment.

Then the delivery boom went off, thanks largely to the growth of third-party services like Grubhub and DoorDash, and by the many digital channels through which customers could suddenly get food. Order tickets proliferated for restaurants, but so too did the stress around how to fulfill those orders without over-burdening the in-house kitchen staff.

The answer to the problem? Take the restaurant out of the kitchen.

In the last few years, restaurants have been moving many of their operations around delivery and to-go orders to dedicated kitchen spaces outside the main restaurant location. The name “ghost kitchen” has stuck around, but now it’s a health-department-friendly term for these spaces that act as hubs for off-premises orders.

But actually, there are many names nowadays for the concept: ghost kitchen, virtual kitchen, cloud kitchen, the (slightly nauseating) description “kitchen as a service.” All those phrases amount the same thing: a kitchen facility that exists solely for the purpose of helping restaurants cook and fulfill to-go orders and get them into the hands of delivery couriers. There is no dining room or front-of-house staff in a ghost kitchen, the tech-stack is more streamlined than that of a full-service restaurant, and, increasingly, the location is completely separate from a restaurant’s dine-in location(s). Now, too, there are also kitchens on (literal) wheels, which add yet-another piece of mobility to the business model. 

To help you navigate the evolving world of ghost kitchens, we’ve created a market map for your reference. This market map is intended to be a snapshot of the current ghost kitchen landscape in 2019. It’s not comprehensive, and we expect both it and the overall landscape to change drastically over the next 12 months. That means you can expect to see this map updated regularly. As always, we welcome suggestions for additional companies and players in this space.

Have suggestions? Drop us an email.

1. Kitchen Infrastructure Providers

The largest category in ghost kitchens right now, Kitchen Infrastructure Providers can be likened to cloud computing providers: they rent companies the space and tools needed to run a business, either as a flat-fee model for on a pay-as-you-go basis. 

Kitchen United, for example, charges a monthly membership fee that includes rent, equipment, storage, and services like dishwashing. Reef, which originally made a name for itself reinventing the concept of the parking garage, offers these things as well as direct partnerships with major third-party delivery companies like DoorDash and Postmates.   

Normally these facilities are large, warehouse-like buildings that hold multiple “restaurants” under a single roof. For large restaurant operators with multiple chains looking to fulfill extra demand brought on by delivery or test out new concepts without incurring too much risk, these are ideal.

Multi-unit chains can also use these spaces to reach customers in areas where they might not have a brick-and-mortar store. Chick-fil-A is widening its reach in the SF Bay Area by working out of DoorDash’s newly opened facility.

2. Restaurant-operated Kitchens

For some restaurants, running a ghost kitchen operation themselves makes more sense than teaming up with a third-party kitchen provider. This is often the case with smaller, independent restaurants, whose ghost kitchen might consist of nothing more than an area of the restaurant’s existing location(s) dedicated to fulfilling off-premises orders. Or it might apply to multi-unit chains who simply want to expand to new areas and don’t have the capital or inclination to deal with the burden of a full-service restaurant. Colombian chain Muy is one such company, having started as a dine-in restaurant before expanding its ghost kitchens to serve more areas of Latin America.

The most notable of all the companies in this category right now is Starbucks. In addition to building out “to-go” stores that exist solely for the purpose of fulfilling off-premises orders, the company has also partnered with Alibaba to turn parts of the latter’s Hema supermarkets into ghost kitchens in China.

The boundaries around this category are especially fluid. In other words, just because you operate your own ghost kitchen in one part of the country doesn’t mean you can’t team up with a third-party provider in another, as The Halal Guys and Chick-fil-A have done.

3. Virtual Restaurant Providers

This is where the lines really start to blur between restaurant, kitchen provider, and delivery company. Anyone can make a virtual restaurant, and as the category in our map shows, more than just restaurants are trying their hand at food concepts that can only be ordered through digital channels and are prepared in a ghost kitchen. Whole30, for example, is a diet concept better known for its cookbooks than its dealings with the restaurant industry. The folks behind that brand teamed up with Grubhub and restaurant company Lettuce Entertain You to create a virtual restaurant offering meals with Whole30-approved foods. 

On the other hand, a company like Keatz runs a network of virtual restaurants it houses beneath the roof of its own ghost kitchens. Taster, based out of France, creates native restaurant brands for food delivery companies like Uber Eats and Deliveroo. Food is cooked in Taster-run kitchens.

4. Mobile Kitchens

In slightly more its own category, companies like Ono Food Co. and Zume are creating robotic, self-contained kitchens on wheels that offer restaurant experiences that can be tailored to specific neighborhoods in a city and also plug into third-party delivery services.

Restaurants can also partner with these kitchens on wheels to expand their reach into new markets, as &Pizza has done by teaming up with Zume.

What’s Next for Ghost Kitchens

Ghost kitchens will become the norm for multi-unit chains. With off-premises orders expected to drive the majority of restaurant sales growth over the next decade, multi-unit brands (think Panera, Chipotle, etc.) will find ghost kitchens a cost-effective way to meet this demand without overburdening existing restaurants. The majority of them will rent space from kitchen infrastructure providers, as Chick-fil-A is currently doing with DoorDash. 

There will be an explosion of delivery-only brands. Since ghost kitchens provide a cheaper, faster way for food entrepreneurs and small restaurants alike to test-drive new concepts, we will see an influx of delivery- and pickup-only brands come out of these kitchens over the next year. Many will be born inside the walls of facilities like Kitchen United or CloudKitchens. Meanwhile, the number of virtual restaurant networks like that of Keatz will increase. 

Artificial Intelligence will be designed into the kitchen. AI is a really broad term that’s often misused. That fact aside, its presence in the restaurant industry is here to stay, and in ghost kitchens, it will prove itself valuable for everything from tracking ingredients to helping staff curb food waste. On the consumer end, we expect to see the technology more deeply integrated into the apps and websites from which customers order, improving recommendations and upselling opportunities.  

More non-restaurant food brands will launch virtual restaurants. In keeping with a trend recently made popular by Whole30 and Bon Apétit, food brands, diets, celebrity chefs, and other non-restaurant businesses will team up with third parties to launch delivery and pickup concepts. Grubhub and Uber Eats are two such third parties already doing this. Expect many more such partnerships — soon.

Bonus: The tech stack will get pared down. No front of house means no POS, right? Quite possibly. With less (or no) customer-facing technology like digital menu boards, self-order kiosks, and tabletop ordering, much of the restaurant tech on the market today becomes irrelevant in a ghost kitchen setting. As the folks at Reforming Retail noted recently, “under this scenario the POS is just an ordering node in the cloud that outputs your menu to a consumer and sends orders to your kitchen.”

That doesn’t mean restaurant tech is going by the wayside. Some ghost kitchens, like those of Muy, have a walkup option where customers order at kiosks onsite, and there will doubtless be new solutions created that are specifically for the ghost kitchen. But the tools of tomorrow’s ghost kitchen won’t look a thing like today’s bloated restaurant-management tech stack. For everyone involved, that’s a bonus.

SKS 2019: Think of AI as Augmented Intelligence, and is the Future Just-in-Time Farming?

Artificial intelligence (AI) is a vague, slightly tech-y term that is overused by marketing departments trying to show some bona fides. But if you want some real insights on what artificial intelligence is and what it can do, then you should check out these talks that Chris Satchell of Zume and Erik Andrejko of Evolv (the venture arm of Kraft-Heinz) each did onstage at our recent Smart Kitchen Summit.

But before you can begin talking about AI you must understand the importance of data. Not just plenty of it or the right kind, as Satchell points out in his presentation. Before you can get into algorithms you need clean, tagged data that is centralized. He recommends that you don’t spread out your data teams across the company, and instead cluster them together to get the best results.

With your data organized and your models in place, then you can start to analyze and gain insights. For Zume, that means making the food supply chain more efficient. When we talk about last mile delivery, we’re actually talking about the last five or seven mile delivery. Zume is using predictive analytics to know ahead of time what food will be ordered, when and where. From that information they can place mobile kitchens directly in those neighborhoods to make the delivery process more efficient for the cooks, the couriers and the consumer.

Satchell wants to take this type of AI-based prediction up the food stack to improve supply chains and even create predictive farming. This type of just-in-time farming would help farmers understand what types of crops to grow and when in order to help reduce food waste.

As Andrejko pointed out in his talk, agriculture is already changing thanks to analytics and AI. Though Andrejko would like people to think of AI as “Augmented Intelligence,” not “Artificial Intelligence.” On the farm, this means that data and algorithms can be used to optimize how fertilizer is applied, using more on acres that need it and less where it doesn’t. Or with emerging fruit-picking robots that can use computer vision to automatically harvest at peak times for ripeness.

Andrejko also sees augmented intelligence at our kitchen tables, giving us more human connection at dinner time. Say you want to cook a butternut squash chili for dinner. Eventually you’ll be able to say that request to a voice assistant, which will break down the list of ingredients and place the order, which will be brought to your house via a self-driving delivery vehicle, which also uses AI to travel to your door.

These talks, along with the panel discussion with Satchell and Andrejko afterwards, are great deep dives into AI for anyone curious about the trendy term or for any company looking to add that arrow to their quiver. At least have the marketing department in your life check it out.

SKS 2019: How AI Will Reshape Food Markets

Pizza Hut Partners With Zume and MorningStar to Put a Plant-based Pizza in a Round Box

Pizza Hut is following the footsteps of dozens of other major restaurant chains and joining the movement for plant-based meat. The Plano, TX-based company announced today that it has partnered with MorningStar Farms’ Incogmeato label to top one of its pies with plant-based sausage.

Dubbed the Garden Specialty Pizza, said pie will be available starting October 23 for $10 per pizza for a limited time at the 3602 E. Thomas Road Pizza Hut location in Phoenix, AZ, according to a press release sent to The Spoon. “Limited supply” in this context means until supplies last, which, given the current craze for plant-based meat products among consumers, could be mere hours.

For both companies, releasing a pizza topped with plant-based meat is a way to ride the coattails of the alt-meat craze. The partnership allows Pizza Hut to compete with the likes of Little Caesars, who tested a plant-based sausage pizza with Impossible earlier this year. For Kellogg-owned MorningStar, promoting its new plant-based brand via a major restaurant chain could help the company’s ongoing efforts to reinvent itself as an innovative alt-meat company on par with Beyond Meat and Impossible, rather than a decades-old peddler of first-generation meat alternatives.

A pie topped with plant-based meat isn’t the only pizza innovation that particular Phoenix Pizza Hut location will see. The Garden Specialty Pizza will be served up in a round box The Hut has developed with pizza-tech pioneer Zume, which recently acquired a company to manufacture its own line of more sustainable packaging.

For Pizza Hut, Zume designed a box that uses less packaging than its traditional square counterpart, takes up less space in a customer’s fridge, and, most importantly, keep the pizza hotter in transit. It’s also industrially compostable. Pizza Hut says once the limited run in Phoenix is over, it will look at ways to distribute the box more widely in future.

All proceeds from both initiatives will be donated to Arizona Forward, an organization that brings businesses and civic leaders together to develop sustainability goals for the state.

Move Over Virtual Kitchens, Zume Shows Off Mobile Kitchen Model with &Pizza

Sometimes there is a difference between the news and the story. For instance, the news today is Zume, Inc., the parent company of Zume Pizza, announced that its mobile kitchen technology will be used by the &Pizza chain.

Technically, &Pizza has already been using Zume’s mobile kitchen at one location in Washington D.C., but that is just the beginning of the partnership. According to the press release sent to The Spoon, the mobile kitchens will be used to expand &Pizza’s brand in new markets and test new products before adding them to &Pizza’s brick and mortar location menus.

So that’s the news. But the story here is actually how Zume is creating a new category of kitchen, one that exists somewhere between the traditional restaurant, virtual kitchen and food truck.

To recap: Zume’s mobile kitchens are pretty much what you would imagine: big trucks outfitted with appliances that can be parked in neighborhoods, closer to customers, to ideally make food delivery faster. Place a food order and the WiFi enabled devices on board the mobile kitchen guide the cooks, make the meal, coordinate delivery pickup and keeps you up to date the entire time.

Right now, &Pizza is just using the Zume’s mobile kitchens, but Zume also offers a full-stack solution that includes predictive analytics and packaging. In theory, this should bring a new level of efficiency to a restaurant looking to expand its operations. Here’s how:

A mobile kitchen requires less investment than a traditional brick and mortar restaurant because you don’t have to build out and maintain a permanent location. This is also the pitch of virtual kitchen spaces like Kitchen United, which lease out commercial restaurant infrastructure for delivery-only restaurant concepts. But while virtual kitchens remain static in one location, a mobile kitchen can park out in different neighborhoods for closer proximity to a restaurant’s customers. A food truck has the mobility, but they are based around nearby foot traffic, so their potential market size is limited.

Even with all promised flexibility around its mobile kitchens, the main hook with Zume has always been its predictive analytics. As we wrote previously:

Zume takes into consideration hundreds of data points, such as day of the week, weather, school calendars and more to develop predictions around how much pizza and what types of pizza will be ordered in a given location. From there a food delivery vehicle cooks up the pizza on the move and delivers it with precise timing.

Zume Inc. subsidiary, Zume Pizza, knows which neighborhoods will order pizza (and gets the proper permitting to set up camp), what types and how many pizzas will be ordered. From there, it can pre-make those pizzas in a central facility and store them in the mobile kitchen so when the orders come in, they just need to be baked and delivered. The limited space of mobile kitchens can be stocked efficiently, delivery drivers can make more dropoffs because they aren’t driving around town, and the food arrives fresher for the consumer because it hasn’t traveled very far. Zume even offers special compostable packaging that restaurants can use.

And it’s not just pizza. Zume opened up its data platform to all types of cuisine last year so Thai or Chinese restaurants or whatever can be outfitted with custom mobile kitchens with the necessary equipment to do the same.

Zume already got $375 million from SoftBank last year, with another potential $375 million more as part of that deal. So the company has the money to scale out operations to different restaurants and regions. &Pizza and Zume may have made news today, but the story to watch over the coming year is how many other restaurants license Zume’s technology.

Zume Inc Acquires Pivot Packaging, Launches Plant-based Alternative to Plastic Food Containers

Zume Inc announced today that it is launching a new plant-based packaging system that rivals plastic in both use and cost. The new compostable food container technology comes via the acquisition of Pivot Packaging, and Zume will open a 70,000 sq. ft. manufacturing plant in Southern California to create the packaging. This is Zume’s first acquisition and terms of the deal were not disclosed.

The fact that Zume is getting into the manufacturing of sustainable packaging isn’t a huge surprise. The company has always been on a mission to increase efficiency throughout its food production through robots, data-driven logistics, high-tech appliances, and applying its knowledge to other restaurants.

The addition of making and selling its own eco-friendly packaging extends the control over their product further down the delivery stack, provides another source of revenue, and comes at a time when there is a definite anti-plastic sentiment rising around the globe

Zume packaging works with a number of different fiber products like bagasse (sugarcane fiber), bamboo, wheat, and straw. According to Zume, Pivot’s technology allows these fibers to be molded in a way that acts like plastic, and at scale, is at a price parity with plastic (more on that in a moment). After use, the Zume Packaging is fully compostable.

This isn’t the first time Zume has gotten into the packaging game. In 2016, Zume launched its Pizza Pod, which was made with sugarcane and developed with Pivot. This new packaging is a part of Zume Source, the division of the company that deals with inputs (ingredients). The other divisions of Zume are Zume Culinary, which includes Zume Pizza, and Zume Foward, which handles all of the logistics, trucks and appliances.

Plastic packaging is a huge problem that the world is (slowly) waking up to. Various cities, states and countries around the world are banning various forms of single-use plastics like straws and grocery bags. But the problems in combating plastic are that it works, it’s cheap and it’s already manufactured at scale.

I spoke with Zume Co-Founder and CEO, Alex Garden, who said Zume Packaging alleviates those problems. First, Garden said that Zume Packaging achieves price “parity” with plastic at scale. He didn’t fully explain exactly what metrics he was using, what the actual cost of Zume Packaging is or how he was defining scale, but said customers large and small would be able to afford it.

Zume Packaging will be available to Zume customers around the world. In addition to the Southern California plant, Zume is opening up manufacturing facilities in India and China. Zume Packaging is available to Zume Culinary customers and those customers would be making announcements about their use of the product over the coming months.

One of the reasons Zume is able to make both the Pivot acquisition and aggressively ramp up the manufacturing of its new packaging is because it got a $375 million investment from Softbank towards the end of last year.

Zume isn’t alone in re-thinking traditional packaging. The Loop is a partnership among a number of different CPGs like Pepsi and Unliver to ship products in re-useable containers. And over in the UK, grocery chain Waitrose introduced compostable packaging for its ready to eat meals in May. Israeli startup TIPA has also created fully compostable, flexible, plastic-like packaging.

We’re all for any company fighting plastic waste here at The Spoon, and we are interested to see how Zume Packaging stacks up against plastic.

Here’s The Spoon’s 2019 Food Robotics Market Map

Today we head to San Francisco for The Spoon’s first-ever food-robotics event. ArticulAte kicks off at 9:05 a.m. sharp at the General Assembly venue in SF, and throughout the daylong event talk will be about all things robots, from the technology itself to business and regulatory issues surrounding it.

When you stop and look around the food industry, whether it’s new restaurants embracing automation or companies changing the way we get our groceries, it’s easy to see why the food robotics market is projected to be a $3.1 billion market by 2025.

But there’s no one way to make a robot, and so to give you a sense of who’s who in this space, and to celebrate the start of ArticulAte, The Spoon’s editors put together this market map of the food robotics landscape.

This is the first edition of this map, which we’ll improve and build upon as the market changes and grows. If you have any suggestions for other companies or see ones we missed you think should be in there, let us know by leaving a comment below or emailing us at tips@thespoon.tech.

Click on the map below to enlarge it.

The Food Robotics Market 2019:

Zume Brings Its Robot and Data-Driven Pizza Delivery to the East Bay Area

Zume Pizza, which uses a combination of robots, predictive analytics and mobile ovens to deliver pizza, further expanding its operations by heading into the East Bay of San Francisco’s Bay Area. According to Eater (and Zume’s service area map), Zume is now delivering pizza to areas around Dublin, Pleasanton and Livermore.

While Zume’s pizza robots garner most of the attention, the company’s bigger play is around data. It hoovers up tons of data points — weather, sporting events, school schedules, etc. — to determine exactly how many and what types of pizzas it will sell in a given evening. From there, Zume parbakes pizzas (with robots!) at a central facility, adds toppings. Pizzas are then loaded and stored in vans with ovens where they finish cooking on the way to a delivery. UPDATE: Zume, as noted below, has been pretty quiet lately, and called to tell us that they have updated their delivery model. Instead of baking pizza on the way to a delivery, they park mobile kitchens in different location and have delivery drivers pick up pies from those. Additionally, the company is now using DoorDash for some of its deliveries.

Up until recently, Zume had only serviced neighborhoods in the South Bay, from San Jose to San Mateo, so the expansion into the Dublin/Pleasanton area is the company’s first move into the East Bay. Zume’s president, Rhonda Woolf told Eater, “We are trying to expand in a way that makes sense for our commissary. This is further than our trucks have historically traveled, so we’re putting a toe in the water to see how that works operationally, working through how to open a central kitchen.”

Zume’s been quiet since it got a $375 million investment from Softbank in November of last year. The company als opened up its data analysis and AI platform to form consultancy that helps other restaurants replicate the Zume model for different types of cuisines. The company even enlisted the help of Welbilt to develop different types of mobile cooking vehicles.

Pizza is a hotbed (pardon the pun) of innovation. Domino’s will let you order pizza from your car, Little Caesars has its Pizza Portal for faster pickup, and Pizza Hut is employing FedEx robots for delivery.

If you want to see how technology like robots are changing the pizza game, get one of the very last tickets still left for our ArticulATE food automation summit happening next week in San Francisco.