The Automation of the Food Industry

It was only a matter of time before tech took over the restaurant industry: from ordering kiosks to biometric employee clocking, the hospitality sector is learning to welcome the changes that come along with the digital age. The the automation of food is here - but how far will it go? Is the inevitable robot takeover upon us? As an industry that relies heavily on unskilled manual labor, do restaurants stand to be the most vulnerable to technological advancements?

Robots vs. People

Some restaurants have already stepped into the future and begun to look to technology to carry out basic tasks. In Pasadena, CaliBurger uses its burger-flipping robot Flippy to turn patties at the griddle rather than line cooks. Up the coastline, California pizzeria Zume uses robots to make pizzas. The Tipsy Robot, a bar in Las Vegas, features robots who can mix, pour, and garnish drinks for patrons in less than 90 seconds.

Automation draws attention and excitement, serving as a clear example of the vast applications of technology and perhaps a peek into the future.

Chefs

Robots performing basic tasks is one thing; they can easily be programmed to carry out a few different motions and repeat them indefinitely. But can robots replace chefs, the backbone of creativity in hospitality? The masterminds behind original recipes and concepts have remained superior thus far. IBM supercomputer Watson was used to collaborate on menu ideation at the Institute of Culinary Education in New York City. It was fed a bunch of recipes and asked to come up with new combinations of flavors and dishes based on their molecular compatibility and cuisine type. Watson provided lists of new ingredient combinations, but could not account for measurements, quantity, or presentation. It was up to chefs to turn the mix-and-match tastes into actual dishes.

Cookbooks

MIT recently announced the development of an artificial intelligence software that can offer recipes for a dish just by looking at a photo of it. The AI works by analyzing an image and searching its database of over a million recipes to find a potential match. It’s purpose is to eventually stand as an alternative to cookbooks, but the technology is still far from accuracy - it couldn’t even identify french fries!

Basically, there’s no way it can match the knowledge and accessibility of cookbooks or their authors for years to come.

Virtual Reality as a Training Tool

Virtual reality has been used primarily as an entertainment device, syncing with smartphones and video game consoles to provide an ultra high-tech experience to everyday consumers. But its business applications - like risk-free employee field training - are slowly being realized and capitalized upon.

VR training tools and programs can be integrated into restaurant operations to help new hires learn the ropes. Rather than watching training videos, employees gain hands-on experience in a low-risk environment, which has proven to be more effective than some traditional training methods. Google tested out its VR training device with a coffee-making trial, where a trainee used a simulated espresso machine. When compared to a group that trained using Youtube videos, the VR group was quicker and more precise.

Robots are Here to Help

At the end of the day, food service is something that is inherently human and personal. No type of automation can deliver the creativity, attention, and care that restaurant staff members do. Sure, it’s cool to have robot bartenders whip up cocktails, but rest assured, restaurant workers are far from being replaced.

The integration of technology in restaurants will more likely cause a shift in roles rather than a mass elimination of them. Automation can carry out menial, time-consuming tasks with tireless efficiency. This way, employees are freed up to attend to customers and other issues while automated systems take care of things like ordering and payment. Panera, for one, has been able to improve its service by offering table delivery and actually hire more workers since installing kiosk systems for ordering.

While robots may change the roles of hospitality workers, humans remain superior, and we have averted the robot takeover for now. Phew.

Are Meal Kits a Threat to Restaurants?

Let’s Unpack This

When it comes to food service, it’s all about providing a good meal in minimal time. Home-cooked meals are no exception, but on a weeknight after a long day at work, a nutritious dinner may have to take the backseat to takeout or frozen pizza. The meal kit offers a delicious, healthy home-cooked meals in 30 minutes or less. With a variety of online recipes and dishes to choose from, all the ingredients arrive at your doorstep in a neatly packaged box for you to assemble like Ikea furniture (with less confusing instructions).

Companies like Just Add Cooking and Plated provide dinners for $8-$10 a person, coming in a bit above the average expense for groceries. They have proven their popularity amongst customer groups like Millennials and working parents, who have expendable income and lack the time or skill to plan, purchase, and prepare dinner.

Impact of Wage Hikes

Wages have risen for restaurant workers in the past few years, and with more minimum wage hikes and declining sales (read more on how to be prepared here), restaurant profits are suffering. The natural response is to raise prices, but that move is proving a dangerous for some. Rather than paying elevated prices for takeout or delivery, diners are opting for groceries or meal kits, whose price point is steady and home cooked aspect is appreciated.

The cost of construction is also going up as hourly rates for workers rise. Chain restaurants seeking to break ground on new locations may have to hold off, while delivery-based meal kit services continue to thrive.

Profit Potential

The $4 billion dollar meal kit market makes up only a tiny fraction of the food and grocery industry, but several companies are pursuing it.

Three weeks ago, Amazon became one of those companies. With a huge new player in the game, we have yet to see if more revenue be snatched from restaurants and grocery stores. The delivery juggernaut has already given investors cold feet on market competitors like Blue Apron. Don’t let them take a bite out of your sales too!

Next Steps

(1) How can restaurants stay ahead of falling profit margins? Assess every aspect of your restaurant to see where you can save. Time is money, so it’s more important than ever to consider the efficiency with which tasks are carried out.

(2) Take a look at where you’re sourcing your materials and ingredients to see if you can find better options. Reduce your electricity and water bills by opting for energy-efficient appliances. Adjust your recruiting process to ensure that you’re adding the best candidates to your team. Well-trained, competent, and happy employees will reduce turnover rates and time spent on training new hires.

(3) Alternatively, if you can’t beat ‘em, join ‘em. Offering to deliver to your customers will increase the volume of orders and boost sales. Denny’s recently saw an uptick in off premise dining after offering on-demand delivery this May. Delivery is the biggest trend in hospitality, so if you’re not already using services like Grubhub and Seamless, it’s worth looking into.

Connecting to Gen Z

Move over, Millennials! Generation Z is here.

Who are they?

Born between 1996 and 2010, the oldest of the Centennials will begin to graduate college and enter the workforce in the coming years, and heads are turning towards these post-millennials. The question is, how will they change the playing field?

Not to be lumped in with Millennials, this younger generation is distinctly different, from their sense of identity to their use of technology. Unlike their older siblings, Gen Z is a more independent group of individuals while also being the most globally connected generation ever.

Having grown up during and after the Great Recession, this group of kids is set to be more realistic and hard working than their predecessors, with a more acute awareness of environmental and social issues. They are the largest and most diverse generation alive, outnumbering Millennials by about a million. The race to connect with them - as both consumers and employees - is on.

Technology as Communication

To these digital natives, technology is a second language. The dramatic changes brought on by the digital age are facts of life to them and have altered the way they think, learn, and absorb information. While Millennials created text-based interfaces like instant messaging and texting, Gen Z communicates through images. Opting for social media platforms like Instagram and Snapchat over Facebook, these young consumers pick up information in a matter of seconds.

For an effective marketing strategy, learn to speak their language.

If you’re not on social media, take the time to set up a few accounts - they are an invaluable tool, not to mention that they come at no cost! Instagram, Twitter, Facebook, and Snapchat are used by millions of Americans, primarily under the age of 30. This summer, McDonald’s used Snapchat to recruit and hire 250,000 employees via “snaplication,” where an applicant could submit a 10-second video to the fast food company explaining why they would be a good candidate for a job. The move was curated to target their largest applicant age bracket and social media users: 16 to 22 year olds.

5 ways to effectively build your brand and market to Centennials:

1. Entertain them - short bursts of information will grab their attention and allow them to instantly process what they’ve just seen. The average attention span of a person has dropped to 8 seconds, so make short and sweet to get your point across.

2. A picture is worth a thousand words! If you can get your message across using images or video rather than text, it’ll garner interest and have more of an impact in those few seconds.

3. Use multiple media channels - Gen Z’ers are pros at multitasking and using multiple screens at once. From LinkedIn to Pinterest, if they’re there, you should be too!

4. Appeal to their curiosity and emphasize the value of your product or service. Many of them grew up in a household that suffered from the financial crash, so they want to know that their money is being spent well.

5. Recognize their diversity and independence to make your content more relatable (and memorable) to Gen Z. Get to know your target audience and make it personal. If it feels more like a friendship rather than a producer-consumer relationship, you will be rewarded with their loyalty.

When it comes to staying relevant with the next gen, social media and tech are key. These teens take in information in a split second and lose interest just as fast, so having an impactful message in a few seconds is essential to your marketing brand.

Hospitality's Biggest Investments of 2017 (So Far!)

2017 may be halfway over, but it’s never too late to start thinking about business investments for the back half of the year. Today, we're reflecting on where people in the restaurant & hospitality industry have been focusing their time & money thus far (in case you're in need of a little inspiration!) 

Technology

From back-of-house to front-of-house, restaurants across the country are upgrading their tech. Expect to see more businesses investing in things like tableside ordering services, enhanced digital delivery and order tracking options, cloud-based employee scheduling, and mobile payment options (in fact, in a recent study, 67% of restaurants named mobile payments as their no. 1 innovation priority for 2017). Many businesses are also giving their BOH a facelift -- things like digital time clocking not only reduce wage and time theft such as buddy clocking, but it can also boost retention among employees (learn more about Harri’s digital time clock with facial recognition here).

Training & Development

Smart restaurateurs understand that your service is only as good as your people -- that’s why many businesses are turning to new and improved employee training programs as a means of improving their service, thus boosting return visitors and engagement. And with the talent market as competitive as its ever been, it’s crucial to retain good people and grow from within through a comprehensive development system. Whether it’s through a more streamlined onboarding process, partnering with third-parties to create updated training videos, interactive training sessions, or enhanced packages and growth opportunities, employers are getting creative about how they train and retain their staff. (Read more about Harri’s team management tools here.)

Customer Engagement

Many businesses gambled on rolling out a digital loyalty program in the first half of 2017, hoping that by personalizing communication to already highly-engaged customers, they could prolong the relationship as well as encourage them to organically spread the brand’s goodwill to new customers. (Read more about how to win over customers here.)

Environment

It’s amazing how big of an impact a little update can have. Whether it’s purchasing new furniture, artwork, or kitchen utensils and supplies, restaurateurs around the country are choosing to invest in their environment. This not only shows an audience that a business is able to stay with the times, it’s important for employees to take pride in their work space. (We’ve got the lowdown on the future of restaurant concepts - learn more here!)  

Data and Analytics

Restaurant operators who leverage software will have a competitive edge in the marketplace in 2017 and beyond. Using automated data and analytics, restaurateurs are able to understand on a deeper level what is truly driving their business. However, getting this type of specialized insight can be a challenge -- it’s hard to figure out the best way to view these numbers. Luckily, platforms like Harri’s Livewire are changing the game; allowing employers to view sales and labor side-by-side, gather important feedback from their employees, and make smart decisions about forecasting (learn more about Livewire here).

The Price of Payment Methods

The “cash-only” restaurant model once dominated the hospitality scene. Now, on the opposite end of the spectrum, the “card-only” model is taking rise. With the flexibility offered by mobile apps and payment methods, touting around bills is becoming a thing of the past. More people are carrying credit or debit cards rather than cash, and some eateries have wasted no time in adapting, leading the way for others to do the same.

The fast-casual salad chain Sweetgreen is one example, refusing cash payments since January of this year and accepting payment only by card or their app. With over 60 locations across the US, only the ones in states where it is mandated that they must accept cash are exempt from the policy. The restaurant Sunday in Brooklyn has been cashless since its opening last year, and many more are poised to follow suit.

Why should you consider making such a bold move? Here are a few reasons given by owners and operators themselves:

It’s faster - From tableside swiping to calculating tip share amongst staff, the entire payment process is automated. Rather than having a server make several trips between the register and the table, it gets boiled down to one streamlined transaction, saving time and clutter. For pay-at-the-register joints, having a card on hand is undoubtedly quicker than counting out change, allowing for more business during busy mealtimes. For crisis situations, you may want to keep a company credit card on hand for cash-carrying patrons.

It’s cleaner - Simply put, cash is dirty. The number of hands and places it passes through makes cash a breeding ground for germs. Needless to say, handling food at the same time is probably not the most sanitary move.

It’s safer - Unfortunately, restaurants are often targets for robberies. Whether it’s an employee on the inside or a midnight break-and-enter, avoid being burglarized by removing cash from the scene. If there’s nothing in the register, there is no reason to try to steal from it.

Focus on other things - With each card swiped and chip read, your system will record exactly what items were bought by that guest. Knowing that all transactions and sales are fully documented, you’ll be able to turn your attention to other matters - like your guests, employees, and operations.

This is not to say that paying with cash is obsolete. Yet. Going cashless is a big jump, and there are still many benefits to accepting payment in bills and coins.

Convenience - It may make more sense to pay for a cup of coffee with a few bucks than to charge it to a credit card. Most people still carry cash, and if it’s easier for them to pay that way, let them!

Include everyone - There are those who are not in a position to own a credit or debit card. Namely, the less affluent and children. If your fast-casual restaurant is across the street from a school, turning away cash payers may end your business.

Avoid fees - It is estimated that up to 5% of a restaurant’s revenue is spent to cover credit card fees. The number of card transactions in a given day can sway your profit margin over time - a few cents here and there on a sale may add up quickly for small local businesses and their customers.

No matter what you decide, let people know. Put it on the website, share it on social media, and post signs in the restaurant (not just on the cash register)! One of the worst feelings for customers is having to cancel an order because they don’t have an alternative payment type.

So when would it make sense to convert to a cashless system? Think about the circumstances surrounding your business and analyze the transaction trends. Who are your customers? What kind of area are you located in? Higher-end restaurants in more affluent neighborhoods will likely see the highest percentage of card usage. If over 80% of your transactions are done without cash, it may make sense to switch over.

Will there ever be a day when wallets won’t carry a few stray singles? It may be on the horizon.