“Software is eating the world” ~ Andreeson Horowitz

It's an irony of sorts that technology, which has transformed so many aspects of our lives, is now "eating into" the restaurant industry. But the truth is that tech and restaurants have been inextricably linked for centuries. From the introduction of cash registers in the 1800s to the advent of refrigeration, microwaves, and cars, restaurants have always been quick to adopt new technologies that help them operate more efficiently and offer better service to customers.

Today, the restaurant industry is as tech-savvy as any other, with a wide range of innovations that are changing the way we dine out. From online ordering and mobile payments to self-service kiosks and AI-powered chatbots, restaurants are embracing technology to improve the customer experience and increase efficiency.

As we move further into 2023, software and robotics are playing an increasingly important role in the restaurant industry. In this article, we will explore some of the latest innovations that are transforming the way restaurants operate and provide insights into how these technologies are shaping the future of dining out.

The Restaurant Market

Before we take a bite into the world of restaurant technology, let's take a moment to appreciate the immense size and scope of the restaurant industry. While precise figures are not publicly available, estimates suggest that in 2022, the industry generated around $898 billion in sales in the United States alone. And according to projections, by 2023, the industry is expected to reach a staggering $998 billion in sales, just shy of the trillion-dollar mark.

It's worth noting that the restaurant industry also provides employment for around 10% of the total American workforce, making it a significant contributor to the economy. In fact, it's estimated that around two in three Americans has worked in a restaurant at some point in their life. Additionally, the global food delivery industry, which is a rapidly growing segment of the restaurant industry, is estimated to be worth $190 billion, with an expected growth rate of around 10.8%.

These statistics paint a vivid picture of just how vital and dynamic the restaurant industry is. From the massive sums of money it generates to the millions of people it employs, it's clear that the industry plays a major role in our society. This makes restaurants, one of the most lucrative industries for tech companies

Introducing Restaurant Technology

To understand the relevancy of the technology, it is important to understand the overall structure of a typical restaurant. A typical structure of a restaurant is the following:

1. Owners: responsible for overall strategy, financial management, and legal compliance. They may operate the restaurant themselves or hire a management team to handle day-to-day operations.
2. Management: responsible for overseeing daily operations, such as hiring and training staff, managing inventory, setting prices, and ensuring compliance with health and safety regulations.
3. Chefs and Kitchen Staff: responsible for preparing the food served in the restaurant, with multiple chefs in larger restaurants specializing in different areas.
4. Front-of-House Staff: includes servers, bartenders, and hosts/hostesses, who greet customers, take orders, serve food and drinks, and ensure customer satisfaction.
5. Support Staff: responsible for maintaining the restaurant's cleanliness and supporting the work of kitchen and front-of-house staff, including dishwashers, bussers, and cleaners.

Owners

Business Intelligence

As a restaurant owner, it is important to have a clear strategy in place to achieve success and profitability. However, developing a strategy requires access to relevant and accurate information about the business, its customers, and the market.

Business Intelligence (BI) is a powerful tool that can help restaurant owners gather, analyze, and interpret data to make informed decisions. BI software can be used to collect data from various sources, such as sales transactions, customer feedback, social media, and website analytics. This data can then be transformed into visual reports and dashboards that provide insights into various aspects of the business, such as revenue, customer demographics, menu performance, and staffing.

Restaurant365

A SaaS-based BI service specialized for restaurants. It tracks information from various sources including store operations, vendor status, bank information, and workforce situation, to paint a comprehensive picture of the business. It would then give out an actionable plan for optimizing the business.

Restaurant365 is a series C startup that has been utilized by some of the most popular restaurants in the US including Taco Bells and Blaze Pizza.

Site Selection

"Location, location, location" is a common phrase used in the real estate industry to emphasize the importance of a property's location. However, this phrase is also applicable to the restaurant industry, where a restaurant's location can be a key factor in its success or failure.

With the help of technology and data analytics, restaurants can gain insights into the local market and consumer behavior to make more informed decisions about their location. For example, digital mapping tools can help restaurants analyze foot traffic and demographics in different areas, while social media and review platforms can provide valuable feedback on customer preferences and trends.

Carto

A SaaS-based Location Intelligence platform with tools to identify location effectiveness by mapping out several data points relevant to the location. It coordinates information like population, average income, demographics, competitors, number of events, etc. Owners can utilize tools such as these to make a more educated decision with deciding on the location of their restaurant.

Carto is a series C startup that has been gaining traction in recent years, acquiring companies like Geographica to improve its offerings. Major customers include T-Mobile, Coca-cola, and Vodafone.

Management

Labor Management

Labor management is a critical aspect of running a successful restaurant. Effective labor management can help managers optimize their staff scheduling, reduce labor costs, improve employee satisfaction, and ultimately enhance the overall guest experience.

One of the key challenges of labor management in a restaurant is managing employee schedules. A good labor management system should be able to accurately forecast labor needs based on factors such as seasonality, special events, and historical data. With this information, managers can create schedules that ensure adequate coverage during busy periods while avoiding overstaffing during slow periods.

7Shifts

Provides an AI-powered auto-scheduler for labor management. It also comes packaged with time-tracking, in-app messaging, as well as hiring assistance. For hiring, submitting a hiring position into 7Shift will automatically upload the job posting onto Indeed. It also has the ability to put training tasks for new employees for them to easily track their own progress in the training.

7Shift is a series C startup that was able to secure 83 million in funds in 2022.

Customer Feedback Analysis

Feedback is crucial for restaurants to identify areas that need improvement, enhance the overall value they offer, and gain a deeper understanding of their customer's interests and expectations. However, obtaining high-quality feedback can be challenging as it can inconvenience customers.

To overcome this challenge, it is important for restaurants to leverage feedback technology that allows for seamless and convenient feedback collection. Such technologies can include customer feedback surveys, online reviews, or feedback kiosks placed in the restaurant. By using these tools, restaurants can gather valuable insights from customers without disrupting their dining experience or making them feel pressured to provide feedback.

Zonka

Zonka allows you to make customer feedback surveys on websites, tablets, email, and even SMS. Surveys from all of these sources are then aggregated into one response inbox so that you can quickly and easily take action. Survey answers are also automatically put into graphs so that you can soon understand trends, customer sentiment, and team performance.

Chefs and Kitchen Staff

Robotic Chefs

Over the past few years, there has been a significant increase in the adoption of machines and robotics in the culinary industry. Initially, machines and robotics were primarily used to assist chefs in preparing ingredients, such as meat grinders, vegetable slicers, and advanced ovens. However, with advancements in technology, we are now seeing more advanced robots that are capable of cooking alongside chefs.

Miso Robotics

Miso Robotics is a company based in Pasadena California that is focused on building robots that eliminate dull, dirty, and dangerous tasks in restaurant kitchens. Some of the robots they have made include:

• Flippy 2: A robotic arm that is able to operate a fryer with multiple different baskets.
• Flippy Lite: A robotic arm that is able to operate a smaller fryer.
• CookRight:An AI system for brewing the perfect cup of coffee.
• Sippy:A POS-integrated automatic beverage dispenser and sealer.

Quality Assurance

Ensuring the quality of food is crucial for the success of any restaurant. In the past, chefs and restaurant managers would rely on visual inspection and their experience to ensure that the food served to the customers is of high quality. However, with the advancement of technology, the quality of food can now be assured with greater accuracy and efficiency.

One example of this is the use of food quality sensors, which are capable of detecting the freshness and quality of ingredients. These sensors can detect the temperature, humidity, and other environmental factors that can affect the quality of the ingredients. Another example is the use of food safety management systems, which are designed to prevent food contamination and ensure food safety. These systems use data analysis and monitoring tools to track the food from the supplier to the restaurant, ensuring that it is stored, prepared, and cooked in a safe and hygienic manner.

Agot.ai

Agot AI utilizes computer vision and machine learning to alert workers when they make a mistake while preparing an order, and can dynamically forecast orders so that the kitchen can prepare enough ingredients while not having too much food waste, and also can identify bottlenecks in the cooking pipeline such that they can be rectified.

Work Efficiency

One way that restaurants have improved communication is through the use of technology. The Kitchen Display System (KDS) is a prime example of this. When an order is placed, it is sent directly to the kitchen staff through the KDS, eliminating the need for paper tickets and reducing the chance of errors. Other examples are the use of headsets to allow servers to communicate with each other and with the kitchen staff.

Overall, technology has played an important role in improving communication in restaurants. By using tools like the KDS and headsets, restaurants can ensure that orders are processed quickly and accurately, leading to happier customers and more efficient operations.

Oracle

Oracle has made a Kitchen Display System that not only tells the cooks what orders are coming in, but also can show ticket priority, and cook timing, and alert the staff if an order is taking longer than average.

Front-of-House Staff:

Since this is the customer-facing side of the restaurant, there will probably be a few technologies that you would recognize. Most tech in this section revolves around customer service, satisfaction, speed of order, and efficient planning.

Online Ordering

Platforms that enable restaurants to directly interact with customers, such as social media and food delivery apps, have become increasingly important. These platforms allow customers to view menus, place orders, and leave reviews. As a result, customers have come to expect easy access to information about restaurants through their mobile devices.

Overall, the online presence of a restaurant is now a key factor in its success. It is no longer enough to simply have a physical location and rely on word-of-mouth recommendations. Restaurants must actively engage with customers online and provide easy access to information and ordering options in order to stay competitive in the market.

Bluedot

Geofencing in the case of online ordering allows restaurants to prioritize customers in order of their time of arrival and could allow staff to greet customers by name. Otherwise, it could allow the restaurant to push notifications to consumers when they are close to the restaurant.

POS System

Point-of-sale (POS) systems have become one of the most crucial tools for restaurants to achieve efficient information gathering and distribution. These systems serve as the foundation for gathering valuable statistics such as sales, inventory, and customer data. With a POS system, restaurant managers can easily monitor and manage the daily operations of their establishment, track employee performance, and make informed decisions based on the data gathered. Overall, the implementation of a reliable POS system is essential in ensuring the smooth operation of a restaurant.

Toast

Toast is a Boston-based company that has created a POS system that most websites online claim to be the best. Their starter kit includes a self-service terminal, a payment device, data security hardware, and software that includes menu management, real-time analytics, and reporting. They also have systems to help with deliveries and takeout.

Delivery

The pandemic has certainly accelerated the adoption of food delivery services, with many people preferring to stay at home and order food rather than dining in at restaurants. As a result, food delivery services like GrubHub, Uber Eats, DoorDash, and Postmates have seen a significant surge in demand. These platforms have made it easy for people to order food from their favorite restaurants with just a few clicks on their smartphones.

With this increased demand, there has been a focus on the logistics of food delivery. Companies are exploring new and innovative ways to get food to customers as quickly and efficiently as possible. One of the most interesting developments in this area has been the use of drones for delivery.

Flytrex

Flytrex is a technology company that specializes in autonomous drone delivery systems. Their drones are designed to deliver packages, including food orders, to customers within minutes of placing an order. Flytrex has been testing its drone delivery service in several suburban neighborhoods across the United States, with a focus on delivering food from local restaurants. It is marketing itself as being able to deliver in less than 5 minutes.

Support Staff:

Facility Hygiene

Smile Robotics

Currently developing an autonomous robot that can pick up plates or trays that customers have finished eating. It automatically places the objects into the designated location for further cleaning.

Consideration

One of the most important considerations when selecting the tools for a restaurant is the ability for it to work with other techs. A business intelligence system that does not work with a POS system can leave a gap in the type of data you can collect. When planning the technology stack of your business, make sure they are compatible with each other.

Market Driver

Over the past decade, the restaurant industry has increasingly adopted technology to improve its services. However, the COVID-19 pandemic has greatly accelerated this trend, leading to the adoption of new technologies that are still widely used today. The pandemic has demonstrated that restaurants that embraced online ordering and contactless payments were better equipped to weather the storm than those that did not.

As a result of the pandemic, many restaurants were forced to pivot to online ordering and delivery services to stay afloat. Additionally, contactless payment options like mobile payments and QR codes were adopted to reduce physical contact and mitigate the risk of spreading the virus. The use of technology has allowed restaurants to streamline operations, improve efficiency, and enhance the customer experience. The pandemic has also brought about new types of technology that were scarce in the past. An example of this would be a startup like DayMark that would monitor employee health from various sensors to alert the manager about possible health concerns. Even to this day, this kind of tech is still used by restaurants to manage the hygiene of their employees.

It's worth noting that the adoption of technology in the restaurant industry has been driven by more than just the pandemic. Consumer demand for convenience and personalization, as well as the need for data analytics and cost savings, have also contributed to the growth of restaurant technology. Nonetheless, the pandemic has certainly accelerated the pace of adoption, and it's likely that many of these technologies will continue to be widely used even after the pandemic is over.

Future Development

There are several future developments for restaurant tech that are already gaining traction and are likely to become even more widespread in the coming years. Here are a few examples:

• Automation: Automation is becoming increasingly popular in the restaurant industry, with robots and other machines being used to automate tasks such as food preparation and cleaning. This technology can help reduce labor costs and improve efficiency, while also allowing restaurants to maintain consistency in their food and service.
• Artificial Intelligence (AI): AI is being used in the restaurant industry to improve everything from ordering and payment processing to personalized recommendations for customers. AI can also be used to analyze data and provide insights into customer behavior, which can help restaurants make better decisions and improve their operations.
• Virtual and Augmented Reality: Virtual and augmented reality are becoming more prevalent in the restaurant industry, with virtual menus and augmented reality experiences being used to enhance the dining experience. These technologies can allow customers to visualize their food and drinks in new and exciting ways, while also providing valuable information about ingredients, nutrition, and more.
• Blockchain: Blockchain technology is being used in the restaurant industry to improve supply chain transparency, reduce fraud, and enhance food safety. Blockchain can be used to track ingredients and other food products from farm to table, allowing restaurants and customers to know exactly where their food is coming from and how it was produced.
• Sustainability: Sustainable practices and technologies are becoming increasingly important in the restaurant industry, with many restaurants adopting eco-friendly practices such as composting, reducing food waste, and using renewable energy sources. As consumers become more environmentally conscious, sustainability is likely to become an even bigger priority for restaurants in the future.
• Specialized Technology in Restaurants:Currently many of these companies are releasing general solution technology that works with a wide range of food type. However, we might start seeing more niche tech that is specialized in certain food sectors, such as for Italian or Japanese restaurants.

These are just a few examples of the many future developments for restaurant tech. As technology continues to evolve, it's likely that we will see even more innovations and advancements in the restaurant industry that will help improve the dining experience for customers and the operations of restaurants.

Lastly

While restaurants are not seen as a place where tech can thrive, now more than ever, there has been a major digital transformation within the restaurant industry that is growing daily. Currently, the space is largely being occupied by startups, but as the market grows, we will probably see major companies starting to enter the market as well. Since bigger businesses would target general-use technology, mid to small-scale businesses may need to consider more specialized tech that can be made use of in a smaller market to maintain relevance.