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Why are restaurants investing in robots and what does it mean for workers?

2022-12-29T04:20:38.446Z


Some food chains are experimenting with automation in the face of labor shortages, but are robots profitable? Will they be able to replace the workers?


By Amelia Lucas -

CNBC

Chipotle Mexican Grill is testing whether a robot can fry tortillas.

Sweetgreen plans to automate salad making at at least two locations, and Starbucks wants its coffee production equipment to reduce the workload on baristas.

This year has brought a flurry of automation announcements in the service sector, as employers scrambled to find solutions to shrinking workforces and rising wages.

But efforts have been patchy so far, with experts saying it

will be years before robots become profitable or replace workers

.

“I think there's a lot of experimentation that will eventually get us somewhere, but we're still a very labor-intensive industry,” said David Henkes, director of Technomic, a restaurant research company.

San Francisco seeks to bolster its police forces with robots capable of killing

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Even before the COVID-19 pandemic,

restaurants were having a hard time attracting and retaining employees

.

The global health crisis exacerbated the problem, as many left for other jobs and never returned.

According to the National Restaurant Association, three-quarters of business owners are facing a staff shortage that prevents them from operating at full capacity.

[Restaurants cope with worker shortage with robots that fry chicken wings and bring them to the table]

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

New automation companies are proposed as a solution.

They say robots will prepare burgers and pizzas more consistently than exhausted and overworked employees, and that artificial intelligence allows computers to take orders more accurately.

the year of the robots

In 2022, many of the most talked about automation announcements in the industry are coming from Miso Robotics, which has raised $108 million through November and has a valuation of $523 million, according to Pitchbook.

Tesla plans to use thousands of humanoid robots to alleviate labor shortages in its factories

Sept.

28, 202201:43

Miso's flashiest invention is

Flippy

, a robot that can be programmed to flip burgers or cook chicken wings and

can be rented for about $3,000 a month

.

Burger chain White Castle has installed

Flippy

in four restaurants and has committed to adding the technology to another 100 as it renovates its locations.

Chipotle Mexican Grill is testing

Chippy

, a tortilla-making kit, at a California establishment

[A robot breaks a 7-year-old boy's finger during a chess tournament]

“The greatest benefit that we bring to a restaurant is not to reduce its expenses, but to allow it to sell more and generate profits,” Mike Bell, general director of Miso, told CNBC, sister network of Noticias Telemundo.

At Buffalo Wild Wings,

Flippy

hasn't made it out of testing after more than a year.

Private equity parent company Inspire Brands, which also owns Dunkin', Arby's and Sonic, explained that Miso is just one of the partners he has worked with to automate the preparation of chicken wings.

Adam, a robotic bartender, at an exhibit in Las Vegas on March 23, 2022. David Becker / Getty Images for Nightclub & Bar

Another start-up, Picnic Works, offers assembly kits that automate adding sauce, cheese and other toppings to pizzas.

A Domino's franchise is testing this technology in a Berlin location.

Picnic rents its equipment starting at $3,250 a month.

Its CEO, Clayton Wood, told CNBC that subscriptions make the technology affordable for smaller establishments.

The company has raised $13.8 million at a valuation of $58.8 million, according to Pitchbook.

At Panera Bread, automation experiments have included

artificial intelligence software that can take orders at the drive-thru

and a Miso system that checks coffee volume and temperature to improve quality.

[USA.

develops robot dogs to patrol the border with Mexico]

“Automation is a word, and a lot of people think of robotics and a robot flipping burgers or making fries.

That's not our goal," said George Hanson, the network's digital director.

But success is not guaranteed

.

In early 2020, Zume shifted from using robots to prepare, cook and deliver pizzas 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.

What will happen to the workforce?

Automation frequently faces opposition from employees and unions, who see it as

a way to eliminate jobs

.

But the companies have been promoting their experiments as a way to improve working conditions by eliminating tedious tasks.

Rosie the Robot delivers food to customers at The Smoke Shop BBQ in Cambridge, Massachusetts, on December 16, 2021. Boston Globe / Boston Globe via Getty Images

In 2023, Sweetgreen plans to open two locations that will automate much of the salad-making process with technology acquired through the purchase of the Spyce company.

The new 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.

Once the machines are in place, they are not going to go backwards, especially if there are big cost savings.”

Casey Warman Professor of Economics

Jammet also cited improved employee experience and lower turnover rates as benefits.

A representative for Sweetgreen declined to comment for this article.

Casey Warman, an economics professor at Nova Scotia's Dalhousie University, predicts that the industry's drive toward

automation will shrink the job market permanently.

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Sept.

22, 202201:32

"Once the machines are in place, they're not going to go backwards, especially if there are big cost savings," he warned.

Warman noted that

the pandemic reduced resistance to automation

as consumers became accustomed to supermarkets and mobile apps for ordering fast food.

Dina Zemke, a professor at Ball State University who studies consumer attitudes to restaurant automation, also noted that consumers are growing weary of reduced restaurant hours and slow service due to shortages of workforce.

In a Technomic survey conducted in the third quarter, 22% of the roughly 500 restaurant owners said they were investing in labor-saving technology in the kitchen, and 19% said they had incorporated labor-saving technology into service tasks. to the public, such as orders.

long-term skepticism

For now it is unclear if or when the cost savings will materialize.

More than a year and a half ago, McDonald's began testing software that could take drive-thru orders after it acquired 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 develop the technology.

Real Madrid implements a robot system for its training sessions

Aug 31, 202200:24

Across the two dozen Illinois test restaurants, the accuracy of the voice-ordering software hovered around 80%, well below the 95% target, according to a report by BTIG analyst Peter Saleh published in June.

This summer, Chris Kempczinski, McDonald's CEO, questioned the feasibility of full automation.

“The idea of ​​robots and all that stuff, while it might be great to grab headlines,

isn't practical in the vast majority of restaurants

,” he said.

"The economy doesn't add up... It's not going to be a generalized solution in the short term."

[Tesla plans to use thousands of humanoid robots to alleviate labor shortages in its factories]

Meanwhile,

automation may have more potential on less noticeable tasks

.

Jamie Richardson, White Castle's vice president, said that less flashy changes, like the installation of Coca-Cola Freestyle machines, have had a bigger impact on sales.

“Sometimes the big investments in automation that we make aren't that impactful,” Richardson said.

Source: telemundo

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