Is automation of food service likely to become mainstream?
On January 19, 2023, the U.S. Chamber of Commerce (Chamber) released its analysis of the current state of the workforce in the United States. While it appears that the country is welcoming a healthy number of individuals into the workforce, the Chamber’s data proves out that the numbers are still lagging behind pre-pandemic numbers. This is not necessarily industry-specific, and one industry that continues to be impacted significantly is food service. Simply stated, without a stable workforce to rely upon, the food service industry, particularly in the fast food and fast casual sector, is experiencing a seismic change, with several suffering through distress at a level not felt previously. A recent example is TOMS King (Ohio), LLC (TOMS), a Burger King® franchisee.
TOMS operates 90 Burger King® locations in Illinois, Pennsylvania and Ohio. On January 2, 2023, TOMS and certain of its affiliates each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Ohio. Although not the only reason for seeking bankruptcy protection, it was noted that the lack of labor to staff and operate the locations contributed to TOMS’ distress. It is not hard to imagine, based upon the Chamber’s data and analysis, that for the foreseeable future, other entities similar to TOMS will be put in the difficult positon of considering restructuring initiatives if, among other circumstances, the available workforce remains lacking.
In an effort to overcome current workforce shortages and, potentially, a more permanent change to the operation of fast food restaurants if workforce levels do not return to pre-pandemic levels, it may seem reasonable to consider a conversion, in whole or in part, to autonomous operations. This is not necessarily revolutionary as automats were first introduced at the end of the 19th Century. However, we have come a long way from vending machine-style dining. With technological innovation, including robotics and artificial intelligence, machines exist that can complete both menial and advanced tasks.
Advantages to automation in restaurants
There are several advantages to automating certain tasks in a restaurant. Not only can robotics be utilized for kitchen tasks such as cooking, food preparation and dishwashing, but automated systems can increase efficiency in the processing of orders and payments, reducing wait time for customers. They can also reduce the likelihood of errors in orders, leading to fewer mistakes and greater customer satisfaction. Further, they can operate 24/7, allowing customers to place orders and make payments at any time. Most importantly, however, and in response to the current environment, automated systems can replace tasks that would otherwise be performed by employees, potentially reducing labor costs and the uncertainty of a stable workforce detrimentally impacting a restaurant’s operations. There are several examples of restaurant concepts currently utilizing robotics, including Wing Stop, Chipotle Mexican Grille and White Castle.
Disadvantages to automation in restaurants
With such innovation, however, comes cost. In addition to the initial investment, the introduction and installation of sophisticated autonomous systems, particularly those that are meant to replace employees, would undoubtedly involve operational downtime. Further, once installed and operating, continued maintenance would need to be considered. Restaurant owners, including franchisors and franchisees, need to consider if the implementation of autonomous systems outweighs the possibility that the workforce will return to pre-pandemic levels.
Undoubtedly, the future of restaurants, generally, including franchised concepts, will include some level of focus on technology and automation to streamline operations, increase efficiency, and improve the customer experience. Digital ordering, contactless payment, and mobile apps for ordering, and loyalty programs, are likely to continue in popularity. Additionally, the trend towards delivery and takeout services is expected to continue growing, as more people turn to online ordering post-pandemic. Overall, restaurants will likely continue to adapt and evolve to meet the changing needs and expectations of consumers.