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Restaurant chains are investing in robots, bringing changes to workers

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A member of the White Castle team next to Flippy from Miso Robotics.

Courtesy of Miso Robotics

Chipotle Mexican Grill tests if a robot can make tortilla chips in stores. sweetgreen plans to automate salad making in at least two locations. And Starbucks wants its coffee-making equipment to reduce the workload of baristas.

This year has brought a flurry of automation announcements in the restaurant industry as operators scramble to find solutions to a shrinking workforce and rising wages. But efforts have been spotty so far, and experts say it will be years before robots pay businesses or replace workers.

“I think there’s a lot of experimentation that’s going to get us somewhere at some point, but we’re still a labor-intensive, workforce-driven industry,” he said. said David Henkes, director of Technomic, a restaurant research company.

Even before the pandemic, restaurants were struggling to attract and retain workers. The global health crisis has exacerbated the problem, as many laid-off workers have left for other jobs and have not returned. According to the National Restaurant Association, three-quarters of restaurateurs face staff shortages that prevent them from operating at full capacity.

Many restaurateurs raised wages to attract workers, but that put pressure on profits at a time when food prices were also rising.

Automation startups present themselves as a solution. They say robots can flip burgers and assemble pizzas more consistently than overworked workers, and that artificial intelligence can allow computers to take steering wheel controls more accurately.

The year of the robot

Chipotle is getting automated

Most of the industry’s hottest automation announcements this year have come from Miso Robotics, which raised $108 million in November and has a valuation of $523 million, according to Pitchbook.

Miso’s flashiest invention is Flippy, a robot that can be programmed to flip burgers or make chicken wings and can be rented for around $3,000 a month.

Burger chain White Castle has installed Flippy in four of its restaurants and has pledged to add the technology to 100 as it revamps its locations. Chipotle Mexican Grill tests equipment, that he calls “Chippy”, in a Californian restaurant to make tortilla chips.

“The most important benefit we bring to a restaurant is not reducing expenses, but enabling them to sell more and generate profits,” Miso CEO Mike Bell told CNBC.

At Buffalo Wild Wings, however, Flippy hasn’t made it past the testing phase after more than a year. Parent company Inspire Brands, which is privately held and also owns Dunkin’, Arby’s and Sonic, said Miso is just one of the partners it has worked with to automate the frying of chicken wings.

Another startup, Picnic Works, offers pizza assembly equipment that automates the addition of sauce, cheese, and other toppings. A Domino’s franchisee tests the technology at a Berlin site.

Picnic rents its equipment, with prices starting at $3,250 per month. CEO Clayton Wood told CNBC that subscriptions make technology affordable for smaller operators. The startup raised $13.8 million with a valuation of $58.8 million, according to Pitchbook.

At Panera Bread, automation experiments have included artificial intelligence software that can take steering wheel controls and a Miso system which checks coffee volume and temperatures to improve quality.

“Automation is a word, and a lot of people are going straight for robotics and a robot that flips burgers or makes fries. That’s not our goal,” said George Hanson, the channel’s chief digital officer.

But success is far from guaranteed. In early 2020, Zume moved away from using robots to prepare, cook and deliver pizza to focus on food packaging. The startup, which did not respond to a request for comment, received a $375 million investment from SoftBank in 2018 that reportedly valued it at $2.25 billion.

The question of work

Automation often meets with reluctance from workers and union rights advocates, who see it as a way for employers to cut jobs. But catering companies are touting their experiments as ways to improve working conditions by cutting out tedious tasks.

Next year, Sweetgreen plans to open two sites that will largely automate the salad-making process using technology acquired by acquiring startup Spyce. The new restaurant format will reduce the number of workers needed for shifts, Sweetgreen co-founder and chief concept officer Nic Jammet said at the Morgan Stanley Global Retail and Consumer Conference in early December.

Jammet also cited an improved employee experience and lower turnover rates as secondary benefits. A representative for Sweetgreen declined to comment for this story.

Casey Warman, an economics professor at Dalhousie University in Nova Scotia, expects the restaurant industry’s push toward automation to permanently reduce its workforce.

“Once the machines are in place, they don’t go back, especially if there are big cost savings,” he said.

And Warman noted that Covid has reduced the pushback against automation as consumers have become more accustomed to self-checkouts in grocery stores and mobile apps for ordering fast food.

Dina Zemke, an assistant professor at Ball State University who studies consumer attitudes toward automation in restaurants, also noted that consumers are fed up with the reduced dine-in hours and slower service that’s getting worse. accompanied by labor shortages.

In a Technomic survey conducted in the third quarter, 22% of nearly 500 restaurateurs said they were investing in technology that would save them labor in the kitchen and 19% said they had added labor-saving technology. room tasks such as ordering.

Long-term skepticism

At this point, it is unclear if or when cost savings will materialize.

More than a year and a half ago, McDonald’s began testing software capable of taking drive-thru orders after acquiring Apprente, an artificial intelligence startup. Several months after revealing the test, the fast-food giant sold the unit to IBM as part of a strategic partnership to advance the technology.

In the roughly two dozen test restaurants in Illinois, the voice command software had an accuracy of around 80%, well below the 95% target, according to a research report by BTIG analyst Peter Saleh. in June.

McDonald’s throngs to the self-service kiosk.

Jeffrey Greenberg | Universal Image Group | Getty Images

And in an earnings call this summer, McDonald’s CEO Chris Kempczinski threw cold water on the feasibility of full automation.

“The idea of ​​robots and all that stuff, while maybe great for making headlines, is not practical in the vast majority of restaurants,” he said. “The economy is not in pencil … You’re not going to see this as a large-scale solution anytime soon.”

Meanwhile, automation may have more potential in less noticeable tasks. Jamie Richardson, vice president of White Castle, said less conspicuous changes like the installation of Coca-Cola Freestyle machines had a bigger impact on sales.

“Sometimes the biggest automation investments we make aren’t as earth-shattering,” Richardson said.

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