RESTAURANTS GO HIGH-TECH
Innovations, adaptations cut costs in survival fight
Even before anyone had heard of the new coronavirus, restaurants were adopting new technologies to meet shifting consumer tastes, cut costs and deal with labor issues amid a highly competitive backdrop.
Now, technology is even more of a necessity as the industry reacts to the pandemic and hopes to recover from devastating job losses and business closures.
“In an environment like this, any activity to generate incremental revenue can be a lifeline,” said Hudson Riehle, executive vice president at the National Restaurant Association.
Roughly 2.5 million restaurant-industry jobs have been lost nationally since March, when economic-closing measures began in earnest to slow the virus, he said. An estimated 100,000 eateries — about one in six overall — have closed their doors at least temporarily. Even with improvement in sight, the industry is forecast to suffer $240 billion in lost revenues this year, he added.
Arizona hasn’t been spared, either.
The state has lost about 1,000 restaurants this year, or about 10% of the total, said Steve Chucri, president and CEO of the Arizona Restaurant Association. Employment in Arizona food and drinking establishments has plummeted nearly 24,000 over the 12 months through September.
And it’s not over: Restaurant owners and other businesses are bracing for a possible second COVID-19 wave as colder weather approaches.
These are some of the ways that restaurants are adapting and relying on technological innovations for a competitive edge, to cut costs or merely to survive.
Who says restaurants can’t share space?
Virtual restaurants are already here and will become more common ahead. Their proliferation will help eateries lower costs such as rent and ease other barriers to entry like needing to find a
trendy locale, predicted the National Restaurant Association in a report on how the industry might operate in 2030.
Kitchen United, one such virtual kitchen, allows customers to order meals from more than a dozen brands ranging from P.F. Chang’s and Baja Fresh to Boston Market and White Castle. Kitchen United offers a dining-hall experience at its Scottsdale location, one of four nationally, along with pickup and delivery options.
At Kitchen United, each restaurant partner has its own staff in the back, preparing food.
“We don’t do any cooking on their behalf,” said Joy Lai, Kitchen United’s chief operating officer. “But we have a general manager on site, making sure it’s all running smoothly.”
The Scottsdale location opened in December, shortly before the pandemic broke out. In normal times, table seating represents the majority of orders, though the Kitchen United restaurants were able to shift quickly to take-out and delivery orders entirely. (Sit-down service in Scottsdale is temporarily suspended during the COVID-19 outbreak, Lai said.)
The virtual-kitchen concept relies heavily on increased consumer comfort with smartphone and cellphone ordering, as well as third-party food-delivery services such as Grubhub. Other technological features include a conveyor belt that brings orders from each kitchen to the counter area.
But the virtual kitchen approach also is about flexibility and greater customer choice.
“We allow customers to have multiple restaurant orders on the same ticket,” said Lai. “Everyone doesn’t have to agree on what they want to eat.”
The restaurant business always has been, and will remain, labor-intensive. It just may not be humans doing a lot of the work in the years ahead.
Before the pandemic hit, 15.6 million Americans worked in the industry, and three in five Americans have been employed in restaurants at some point in their lives.
“Even in normal times, without a recession or pandemic, the top challenge for restaurant operations has been the recruiting and retention of labor,” Riehle said.
Restaurant owners will continue to strive to keep a lid on labor costs and employee turnover. Enter robots.
Robot technology already is here and could see much wider application in the restaurant industry, especially quickserve businesses, predicts a new report from Ball State University. Robots are capable of flipping hamburgers, making pizzas and mixing cocktails as bartenders, with more accuracy and less shrinkage.
“Imagine telling your problems to a robot instead of a human,” said Dina Marie Zemke, an associate professor at Ball State University who co-authored the report.
One California company, Miso Robotics, recently announced a pilot program to put grilling robots in White Castle kitchens.
Miso has a robot that can cook hamburgers, french fries, chicken nuggets, popcorn shrimp, corndogs and other foods, with an ability to add new ones. It also tracks food deliveries and inventories, and it helps to maintain social distancing by reducing the number of people in a kitchen.
White Castle has vowed not to lay off workers as a result of robotics but switch them to other positions.
The robot, named Flippy, sells for about $30,000 (which can be financed), and buyers pay a $1,500 monthly fee that includes software updates, maintenance and more. The $1,500 fee equates to about $4 an hour, assuming 12-hour shifts, seven days a week.
Robot prices have dropped with technological advancements, and the cost comparison will become more attractive as states such as Arizona continue to boost their minimum wages. Arizona’s minimum wage starting in January will increase to $12.15 an hour, compared to a federal minimum of $7.25 an hour.
According to some estimates, more than 80% of restaurant jobs, which would equate to 10 million or more positions, possibly could be taken over by automation.
A study by the Federal Reserve Bank of St. Louis cited food preparation/serving as one of the occupational areas most likely to be affected by robotics and automation, though the report’s authors emphasized that many displaced workers could be shifted to other roles.
But it is happening. “The incorporation of robotic technology is a question of when, rather than a question of if,” the Ball State report concluded.
Some restaurants already require employees and even customers to pass a temperature check before they can enter. Expect more of that down the road, with more comprehensive evaluations.
For example, Phoenix company ServRX has developed a “return to work” system to screen employees each day for COVID-19 symptoms.
It starts with a health survey sent electronically to employees, who can complete it in little more than a minute.
Those reporting symptoms are told to stay home and await further instructions, including a call from a supervisor. Those reporting good health are cleared to come in.
ServRX kiosks at the site of employment can recognize employee faces, even with masks on, and conduct temperature scans, said Breck Rice, the company’s chief revenue officer. Those in good health and with proper identification are admitted.
All information can be tracked for human-resources purposes, compliant to HIPAA and state regulations, and can be analyzed to spot trends. For example, “It can track if there’s an outbreak in a specific department,” Rice said.
The system can be customized to include vendors or other frequent visitors.
While suitable for many restaurants, the system can be used by “any small business that needs to get consumer confidence up and people back in the doors,” he said.
The National Restaurant Association study was released months before the coronavirus outbreak, but it too predicts more employee screening ahead.
Self-driving vehicles are becoming viable, with much of the testing conducted in Arizona. Among various examples, commercial food-service giant Sodexo last year tested robots to deliver meals (without alcoholic drinks) to students at Northern Arizona University.
Grocery chains including Fry’s also have tested automated deliveries around the Valley, while TuSimple has tested self-driving big-rig trucks that can carry food shipments on highways between Phoenix and Texas.
The trend to self-driving vehicles has had little to do directly with restaurants or food shipments, but it’s one on which the industry can capitalize.
One intriguing possibility, cited in the National Restaurant Association’s 2030 report, is the potential for restaurants to serve elaborate takeout meals, knowing that customers can consume them using both hands as their automated vehicles motor along.
And if you work at a restaurant’s drive-through window, it’s only a matter of time before driverless vehicles start pulling up for orders.
Watch out overhead, too. “I think you’ll see drones delivering food in the not-distant future,” Chucri said.
Technology also might allow restaurants to adjust menu offerings and tinker with prices, depending on the time or day of the week.
“Restaurants will be able to use new data capabilities to develop dynamic menus with real-time pricing that can respond to supply-and-demand changes,” the 2030 report predicted.
Other aspects of restaurant operations also will become more transparent to the public, including health inspections, safety training, staff certifications and food sourcing.
Shandee Chernow, a Scottsdale woman who suffers from a pork allergy, launched a software business a couple years ago, CertiStar, that helps restaurants inform customers of potential allergy issues on their menus.
The software gives alerts ranging from all-clear to caution on various dishes within a matter of seconds, greatly expediting a process that otherwise could take 10 minutes or more as the conversation shifts from customer to waiter and waiter to chef, then back again.
“Reducing that table turn-time is really important, especially now,” Chernow said, as seating capacity at most restaurants is restricted by social distancing, meaning fewer meals are being served.
More than 30 million Americans suffer from food allergies. Roughly 170 common foods are linked to allergies including peanuts, shellfish, wheat, dairy products and tree nuts. “We have computerized all that, making it fast and accurate,” Chernow said.
CertiStar’s software is sold to restaurants, which can list allergen menu ingredients on their websites for customers to peruse or make the information available through waiters and other staff members equipped with cell phones, tablets and so on.
There’s no question that technological advances have made a service such as hers feasible, Chernow said. “Ten or 15 years ago, some restaurants still didn’t even have a website,” she noted.
Off-premises restaurant sales — carryout, delivery and drive-through — was where most industry growth was expected, even before COVID-19 hit. Largely, this is because smartphones, tablets and other technologies increasingly are available to support it.
Pre-pandemic, restaurant traffic was 63% takeout, drive-through or delivery, with the rest sit-down service, Riehle said. But during the second quarter, when shutdown measures took hold, the non-table proportion shot up to 90%.
While there’s still much pent-up demand for traditional restaurant dining, automated ordering will likely accelerate as more consumers become comfortable with it.
“Many practices established during the pandemic will be carried forward,” Riehle said, citing more off-premise food consumption as an example. “The pandemic has been a great accelerator of adopting various restaurant technologies.”