The Future of Foodservice Is Already Here

The Future of Foodservice Is Already Here

We’re currently in the midst of a fourth Industrial Revolution — one that’s bringing together digital, biological, and physical systems. What might have seemed Orwellian 25 years ago — sending a self-driving car to pick up a pizza, or wearing contact lenses that allow a maitre’d to immediately know your dining preferences — is in many cases a reality today. Starbucks is mastering the art of AI (Artificial Intelligence), Domino’s is digitizing nearly every aspect of pizza delivery. The future of foodservice, as cliché as this might sound, is here and now.

The notion of robots running entire restaurants is no longer science fiction. In fact, Yum Brands CEO Greg Creed recently said that he believes robots and automation could replace human foodservice workers sometime in the next 15-20 years.

We’ve all seen the headlines about robots, digital ordering kiosks, and drones. But few restaurant operators are actually doing anything about it — taking the time to educate themselves about advances that will completely change the way they do business. What’s more is that recent technological advances aren’t just making it easier to do business — they’re completely changing the way consumers interact with brands, the way people eat, and how guests interact with a restaurant.

It’s easy to dismiss with a “we’ve got plenty of time to figure it out,” but the truth is — these changes will come faster than anyone can predict. More than 100 years ago, a group of French artists produced works depicting life in the year 2000: 87 images printed on paper cards to be inserted in cigar boxes and turned into postcards. Their visions of “the future” turned out to be a fairly accurate representation of what would transpire over the next 100 years.

future of food

Okay, so we still don’t utilize personal aircraft for mail-delivery — but both Domino’s and Chipotle have been testing drone delivery. In fact, the use of delivery — be it by drone, autonomous vehicle, or old-fashioned cars — is already beginning to fundamentally alter the restaurant landscape.

future of food

Many of the other images — like one depicting chickens being bred at a rapid rate, via a machine — are startlingly accurate. In fact, today’s broiler chickens have been bred selectively since the 1950s to produce meat quickly, a full 50 years earlier than the French artists predicted and proof that what seems far in the future could be just a few years off.

In many ways, the food and hospitality industries are playing catch up to recent technological advancements. The next five years will be a turning point for the industry — which means restaurants need to start preparing today. Below, some “futuristic” trends that we’re already seeing crop up:

SPACE FOOD IS ABOUT MORE THAN TANG 

The population of Planet Earth is currently near 8 billion. According to researchers at Yale University, we’ll likely exceed 9 billion people by 2050. Once that happens, the planet’s resources — food, water, or living space — will naturally start to run low. It’s a startling reality, one that some food companies are already working to combat.

Soylent, for instance, is a meal replacement startup launched by a group of engineers whose powders, shakes and bars provide all the nutrients a body needs to survive. It sounds Willy Wonka-esque, sure, but the drinks are hugely popular in Silicon Valley, where coders often don’t have time to leave their desks for lunch. It’s got a lot of VC interest, too — in fact, Soylent snagged $20 million from Andreessen Horowitz for its drinkable meals.

The company has run into a few problems already (including a major recall last year), but there’s no doubt that theirs and similar meals-in-a-bottle/tablets/bars will gain more mainstream popularity as agricultural spaces begin to dwindle. It’s about more than being on-trend, like the Dippin’ Dots and freeze-dried ice cream sandwiches of yesteryear. Companies like Soylent are injecting convenience

DEMAND FOR NEW PROTEINS IS GROWING

If VC interest is any indication, the slew of new faces in the food-tech space is proving to be more than just a flash in the pan — in fact, food startups are increasingly taking share from restaurants.

When you look at the pressures we’re putting on the food system, coupled with a growing acceptance of 3D-printed foods and meal replacements, the leap to eating different proteins (i.e. not just poultry and beef) isn’t likely that far off. Over the next few years, farmers will be forced to adapt, in order to be more productive with their agricultural space. This is a lesson some cultures are far more acquainted with than the U.S. According to the Food and Agriculture Organization of the United Nations,  20 percent of the world’s consumers eat insects. Some estimates put that figure at closer to 80 percent. Either way, insect tacos haven’t exactly taken off in the U.S. Yet.

image Via Jaiprakashsingh at English Wikipedia

image Via Jaiprakashsingh at English Wikipedia

There are a couple of American companies, like Exo and Bitty Foods, that are currently making and producing cricket products such as protein bars and baking flour. The bugs produce fewer greenhouse-gas emissions than beef and — a plus for farmers — they require a lot less space and water. Plus, they have nearly as much protein, according to scientists.

Insects aren’t the only alternative protein on the horizon. A slew of companies are currently racing to be the first to offer lab-grown meat (yep, you read that correctly) to the masses. Meatballs and burgers that originated in a petri dish, “born” from animal stem cells, have attracted the attention of several big-name investors. Google founder Sergey Brin provided some $330,000 to fund the world’s first test-tube hamburger, while tech titan Peter Thiel’s foundation is said to have donated $350,000 to Modern Meadow’s bio-printed meat efforts. Currently, no lab-grown meats are available to the masses, but Memphis Meats (which streamed a live taste-test of its lab-grown meatball in 2016) expects its products to hit stores within five years.

As alternative proteins grow in popularity, consumers will become more accustomed to eating them. After all, kale wasn’t always the sexy vegetable it is today.

YOUR LATTE WILL SOON COME WITH A SHOT OF ARTIFICIAL INTELLIGENCE  

 In January, Starbucks unveiled its latest tech advancement: Voice ordering powered by groundbreaking AI technology. But AI won’t be limited to grande half-caf lattes. Already, Domino’s allows customers to place orders via voice-technology, like Amazon’s dot. But in the (near) future, AI will be just about everywhere.

How can we be so sure? Just follow the money. Since 2011, some 150 AI technology companies have been acquired — many of them by big names like Apple, Google, and Yahoo. The sheer amount of money flowing into the AI space signals that the technology will eventually make its way through every facet of the marketplace. In 2016 alone, more than 500 AI startups raised $5B in funding. Below, just a few examples of companies already on the forefront of AI in the restaurant business:

Screen Shot 2017-03-29 at 5.01.18 PMAUTONOMOUS VEHICLES WILL DRIVE CIRCLES AROUND THE INDUSTRY 

At this point, drones and self-driving cars aren’t anything new. But increasingly, those in the food and beverage industry are turning to the technology. In November, Domino’s officially launched pizza delivery-via-drone in New Zealand; Chipotle offered a test run of drone delivery at Virginia Tech in the fall of 2016. And Budweiser made headlines in October when it announced it had officially completed a 120-mile beer run, delivering 2,000 cases of Bud in a self-driving semi.

Drones will become de rigeur soon enough. Amazon, continuing its quest for world domination, will deliver just about anything in them, including groceries. Fast food and fast-casual chains will jump on the bandwagon, too. Even average citizens will one day use their drones to pick up groceries, or a takeout order (remember: it was just a few years ago that not everyone had a smart phone).

And if we continue on this self-driving track, it’s pretty clear where that road will take us: One day, probably not too far off, we’ll be able to program our self-driving Toyota to leave early in the morning and be back in time for dinner — along with a trunk full of Joe’s Stone Crab from Miami or Nobu Malibu’s crispy rice with tuna. Depending on which coast you’re on, of course.

PREDICTIVE ANALYTICS IS MAKING ITS WAY TO RESTAURANTS 

One of the big holes in the hospitality industry is analytics and big data. Restaurants struggle with the application of data but analytics and mass personalization will prove revolutionary in the foodservice industry. Disney World has been successful with its use of predictive technology for years, though even that is evolving. The MagicBand is a microchip-embedded bracelet that serves as a ticket, credit card, hotel key and FastPass, which debuted in 2013. Guests wearing them throughout the park even experience personal greetings from characters and can pay for their meals with the flick of a wrist. Eventually, the theme parks plan to utilize mobile technology via smart phones instead of the bands. Smart technology, in the hospitality world, allows for productivity improvements, efficiency gains, and translates to an enhanced customer experience.

But the future goes far beyond what Disney’s Imagineers have dreamed up. Samsung has been granted a patent for a smart contact lens, one that offers a visual display — think of it as a less-bulky, less-obvious version of the Google Glass. When you take that and add facial recognition to the mix, the technology could translate to maître d’s immediately recognizing a restaurant guest upon entry, knowing his food preferences, allergies, etc.

It could go a step further, too, specifically if technology would allow facial recognition to calculate sentiment. In other words, that same maître d’ could spot an irritated customer in the dining room and interfere before the situation gets out of hand. Similarly, eye-tracking technology will allow restaurants to examine their menus in a new way — through the eyes of their customers.

AN EMPHASIS ON LOCAL IS GIVING RISE TO TRACEABILITY TECH 

As always, the best predictor of the future is the past. Over the past 100 years, we’ve made great advances in technology, allowing people to buy tomatoes at any time of year, in any part of the country. But somewhere along the way, we’ve lost touch with the real root of the food system: where that tomato comes from.

Moving forward, traceability will become more important than ever before. Chipotle is often credited with igniting the trend of “food with integrity,” though it’s safe to say the company has lost sight of that with its rapid expansion. Other companies like Sweetgreen and Tender Greens will take Chipotle’s place as the kings of healthful, quick meals with ingredients that can be easily traced to the farm in which they grew. Think of it as Fast Casual 3.0: Brands that offer food with a sense of source, a sense of place, and a sense of season.

Soon enough, the Internet of Things will make its way onto cucumbers and tomatoes — making it easier to track the source of foodborne illnesses before they get entirely out of hand.

RESTAURANT ROBOTS WILL REPLACE (SOME) HUMAN WORKERS 

We’ve discussed before how technology — specifically, robots and automation — is transforming foodservice. Restaurant automation makes a lot of sense for an industry filled with players who are struggling to remain relevant and find themselves bogged down by high labor costs. Already, we’ve seen most major chains (the successful ones, at least) moving away from cash, and replacing traditional transactions with mobile payments. Soon, though, tech will take over other facets of the industry — most notably, labor.

A move from human workers to robot workers could save the QSR industry approximately $12.2 billion in annual wages. Automation helps streamline back-of-house operations, too — so it’s unsurprising that many chains are turning to technology these days. Wherever man-hours can be reduced (or replaced) by automation, technology will find a way.  

In a March interview with CNBC, Yum Brands CEO Greg Creed said “I’m not sure we’re going to have robots replacing humans soon [but]…I think it’s the beginning of robotics. I believe — having listened to the people in the Artificial Intelligence area, and we’re starting to work with them in that area…I do believe that probably by the mid-‘20s to the late-‘20s we’ll start to see a dramatic changing in the way machines run the world.”

THE WORLD IS CHANGING. RESTAURANTS WOULD BE WISE TO TAKE NOTE. 

We consult on trends and their implications for the industry with brands that span the globe, and we’ve seen firsthand how far behind some segments of the industry lag. In a highly competitive industry, only the strong survive and it seems that some brands are fading into obscurity faster than you can say “endless appetizers.”

Those who wish to ensure relevance will need to adapt with the rapid pace at which technology (and society) is moving — and invest resources (both human and financial) toward adding a new pace and dynamic into their business. The chains who are early to adopt the latest advances will reap the largest benefits.

Those in the food industry are quickly realizing their impact on the world at large. Forty percent of all the food we’re making is going to waste. Within the next 30 years, we could potentially hit the Earth’s capacity limits for agriculture. The current system is unsustainable and the question becomes: What might manifest from that in 2017, and beyond? As we speculate, it’s easy to dismiss some technological endeavors as science fiction. But equally important is to remember the illustrators of 100 years ago, who drew their visions of the future — many of which, at the time, seemed outlandish. Today, technology is moving at an even faster pace. What took 100 years then, now may only take a few. The question remains: Who will move forward with a vision for the future, and who will find themselves relegated to the history books?

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ABOUT AARON ALLEN & ASSOCIATES:

Aaron Allen & Associates is a leading global restaurant industry consultancy specializing in growth strategy, marketing, branding, commercial due diligence for emerging restaurant chains and prestigious private equity firms. Aaron has personally lead boots-on-the-ground assignments in 68 countries. Collectively, his clients around the globe generate over $100 billion annually and span six continents and more than 100 countries.

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