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Musings on the Foodservice Industry

The Robots are Coming, The Robots are Coming

Thanks to Cheese Market News for publishing this blog https://www.cheesemarketnews.com/guestcolumn/2017/27oct17_01.html

 

A friend of mine, not from the food business, said a few weeks ago, “I’ll bet the talk of $15 an hour minimum wage, is driving your restaurant customers crazy?” “Not at all”, I said, “they are actually happy, because at $15 an hour, the cost to implement robots starts to make sense.”

For those of us old enough to remember the robot from “Lost in Space” wildly waving its vacuum cleaner arms to warn Will Robinson, the world of robots has changed. The idea of a robot is an electronic tool that can perform repetitive operations. So, before you wave your own arms and warn that robots won’t happen, consider the kiosk, which you probably have used. It’s a robot.

The transition in foodservice to robots began innocently 20 years ago when the QSR workers handed consumers an empty cup and motioned them to fill their own at the fountain. Restaurant operators saw a way to outsource labor to the customer. This task even had some benefits for the customer, a few extra sips to top off refills and something to do while we waited for our cheeseburger.

Labor in many operations is the toughest element to source and manage. Finding lower-skilled workers willing to work long hours on their feet for low pay has produced marginal service for customers as well as training and turnover headaches for managers. The idea of incorporating robots to cook, clean, serve and approve transactions on debit cards, might be the greatest gift restaurant operators can get.

Hiring, training, scheduling and disciplining disappears. Surly cashiers replaced by electronic helpers lowers consumers’ expectations of courteous service.

Earlier in the year, Amazon announced the introduction of “Amazon-Go” locations – grocery stores stocked with barcoded goods that don’t require check out. Simply place items in your basket and walk out. Scanners in the store charge your account. San Francisco’s Café X is a high-end coffee shop that has no employees. Patrons approach a kiosk, select their drink order and a completely automated robot grinds, pours, foams and delivers a hot cup of coffee while you swipe your card to complete the transaction. Each day, a human visits to refill the water, milk and beans. https://cafexapp.com/

A New York City restaurant called Eatsa, built on self-serve – reminiscent of the “automat” – offers self-service meals to on-the-go customers. Consumers place an order from their smartphone, pay and pick-up from their personalized cubby at the location. The chain has expanded to seven locations in NYC, San Francisco and Washington, D.C. https://www.eatsa.com/

Sally Salads, also in San Francisco, is a robotic salad builder that assembles and serves. This robot is more like a salad vending machine – press a few buttons on a touchscreen and it drops neat portions of refrigerated ingredients into a bowl. Sally is the first product from Chowbotics, a Silicon Valley startup that develops robots for the foodservice industry. CEO and Founder, Deepak Sekar, spent two years creating Sally with help from Apple. The founder said, “I’ve always thought cooking was 20% creative work and 80% formulaic work like chopping.”

Also in New York, Shake Shack plans to open a cashless, kiosk-only location. CEO Randy Garutti says the newest digital elements allow the kitchen staff to focus on the food and the front-of-house staff to focus on the customer. Shake Shack won’t have cashiers. Instead, guests will use digital kiosks or their mobile phones to place orders. Manning these kiosks will be “hospitality champs,” Shake Shack employees who specialize in making customers’ time in the restaurant as seamless and enjoyable as possible. The company hopes to test many digital and hospitality innovations in this location before rolling them out elsewhere.

This innovation is the point of the robotic transition. Operators will use a combination of people and electronics where people can do the things that robots cannot. A mid-sized restaurant with 60 employees, may be able to run with 40 workers. Fewer people to hire and manage and better paid because they do higher skilled work.

To hire the best staff, Shake Shack said the company will pay workers a minimum of $15 an hour. They said it’s likely that in the next 15 to 20 months that areas like New York, California and D.C., will transition to a $15 minimum wage. Many of its locations already pay employees upwards of $13 per hour, with the aim of graduating workers to higher pay grades and positions within the company.

As I stated at the beginning, restaurant operators are nearly giddy with the $15 wage idea. Paying workers a better wage will eliminate their greatest headaches. Lower cost areas will transition faster, as the economics of robots over low-skilled workers will pay off quicker. Millions of “fast-food” jobs will be eliminated as Washington wage mandates will price low-skilled workers out quicker in the Midwest and Southeast. This is the free market in action. Economists have warned politicians that high minimum wage mandates would lower the labor participation rates – looks like they were right and Washington was wrong, as usual.

This transition in factories occurred years ago. Many of us have been in automated cheese plants with banks of Double-O’s operated by very few people managing sophisticated software that improves the efficiency and consistency of the cheesemaking process. A generation ago, large cheese plants teemed with workers stirring, shoveling, molding curds and moving 40# blocks along conveyers.

As robot sophistication improves, look for more automation to find its way into cheese plants. Commodity Cheddar and Mozzarella plants will be first, but even specialty cheese factories will see technology manage cutting, labeling and warehousing. These changes will enable American cheesemakers to better compete on the world stage. Our ability to produce high quality, cost effective milk converted in mechanized plants, will allow American ingenuity to penetrate more shelves and kitchen storerooms globally.

The push for the $15 minimum wage will displace millions of workers, but leave in its wake, a few, higher compensated workers, armed to win the global cheese battles. Now is the time for your organization to explore and embrace robotics for a more stable and profitable future.

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