When the famed L.A. institution Canter’s Deli opened an outpost in the first Kitchen United (KU) location, the first visitors were two elderly ladies. They had read about the new Canter’s location in the paper and stopped in for some piping-hot matzo ball soup. “That’s when I thought ‘Uh Oh,’” said Jim Collins, CEO of KU.
What these ladies didn’t understand is that restaurants operating out of KU commercial kitchen spaces are delivery-only, meant to give kitchens a low-cost way to serve the growing demand for food delivery without having to open up a new location.
The advent of cloud kitchens is just one of the trends is just one of the topics tackled during the Future of Restaurants panel at our L.A. food tech meetup yesterday. Also onstage was Alex Canter (yes, that Canter), CEO of Ordermark (and heir to the aforementioned deli), which helps restaurants streamline delivery order fulfillment, and Christine Schindler, CEO of Pathspot, which makes a device that uses visible fluorescent spectroscopy to scan restaurant employee’s hands to check for foodborne illness. Here are a few of the most salient points (and questions) the speakers raised about the evolving restaurant world — where we are, where we’re headed, and what has to change to get us there.
Restaurants need to adapt fast, or prepare to fail
Not all restaurant owners are tech-savvy — they’re incredibly busy, and some think that technology is just one more thing to add to their overly-full plate. But in a world where more and more people expect their favorite joints to offer services like delivery and online reservations, resistance can prove fatal.
“Brick and mortar businesses are learning to become digital businesses,” said Canter. Which isn’t always an easy transition — or one that restaurants one to take. He said that while there are 800,000 restaurants in the U.S., only 12 percent of them offer delivery. Part of the reason for this is because they don’t want to have to take on the tricky task of managing multiple delivery ordering services.
For Schindler, it’s critical to get adoption from both restaurant owners and workers. And she has a lot of out-of-the-box ways to get people to use PathSpot. “We put a lot of games in our device,” she said. Employees can win prizes for getting clean hand scans, and they also encourage friendly competitions between stores to see whose hands are cleaner.
Collins, however, isn’t willing to spend as much time encouraging restaurants to adopt. “My job isn’t to convince someone that the future is coming, my job is to help someone face the future they already recognize is upon them.” Deep, yes; dramatic, yes — but in a world where the majority of restaurants fail and the remainders survive off of razor-thin margins, survival will most likely mean embracing technology.
Where is there room for innovation?
For Collins, the answer is simple: personalization. He compared restaurants today to the search engine marketplace of 30 years ago. Search engines used to display results based on who paid them the most, then “The Big G” (as Collins called them) came in and started showing results based on what was most relevant to the user. (Full disclosure: Google is an investor in Kitchen United.) “These days, we serve a consumer that’s interested in their own dietary preferences,” he said. “If you’re gluten-free, why do you see menu where 80 percent of the items have gluten? Why don’t you see one that only shows the 20 percent that’s not? That’s what I’m looking for.”
Canter pointed to the gig economy, but not in food delivery. “I’d like to see more [on-demand economy] for labor,” he said. While companies like Pared are leveraging the sharing economy to provide short-term BOH workers, like dishwashers and line cooks, “it’s pretty nascent,” said Canter.
Schindler, unsurprisingly, had her eye on food safety. “We need a holistic sanitation solution,” she said. “It’s crazy that the best solution now is an Employees Must Wash Hands sign.”
Do you have to be from restaurants to help transform them?
“If you don’t understand restaurants, you can’t be in the business of serving restaurants,” said Collins. His point was that restaurant management is just too complex: if you don’t have a deep understanding of what it means to work in a restaurant — from busboy to bartender — it’ll be very difficult to successfully run a restaurant.
But sometimes an outsider’s perspective is valuable. Schindler had never worked in the restaurant industry before founded Pathspot. But while working in rural Tanzania, she saw a problem (food-borne illness) that could be solved by the pathogen-spotting technology she was working on in her healthcare job. By applying tech previously silo-ed in the healthcare world, she could help prevent an issue that has been plaguing food companies — especially as of late. Maybe more technologies developed for other markets (blockchain, anyone?) could have a lasting impact on the restaurant world, too.
Thanks to all who came out to ToolBox LA for our food tech meetup yesterday! Keep an eye out for future meetups on our events page.
I love this pragmatic response from Jim Collins; that he isn’t willing to spend as much time encouraging restaurants to adopt. “My job isn’t to convince someone that the future is coming, my job is to help someone face the future they already recognize is upon them.” Perfect answer. There are just too many laggards in the restaurant industry all looking for an immediate ROI to their technology investments and need months, even years of coaching and convincing. Convincing non-forward thinking restaurant CEO’s the earth is round is just too costly. Resttech companies have ROI considerations too. Rather, far better to focus on the early adopters, the believers, the forward thinkers that believe they must at least keep pace with how consumers [their customers] use and will use technology today.