What’s happening (and is required) of organizations and leaders, both shaping and being shaped by these new and dynamic forces, is a necessary transformation and transition from what was to what will, can, and should be. In other words, what doesn’t kill you makes you stronger (so long as your intent is thriving, not stepping — avoidably — into an oncoming truck in busy traffic).
Reinvention is requisite for established companies to avoid disruption.
For those who have really good forecasts about where the market is headed — and are looking for more than just quarter-to-quarter returns — now is the best time to leapfrog forward and ahead of competitors of today and tomorrow. The following articles on restaurant technology and innovation are a starting point for championing technological change.
Champions of Change: Leaders Who Made Bold Bets on Restaurant Tech
Restaurant companies who have most successfully harnessed technology started their transformations while facing significant threats and went on to restore relevance and build incredible value.
Disruption and Restaurant Innovation
What will happen in the next 5 years will be as significant and transformative for a multi-trillion dollar global industry as was the inventions and evolutions of the last 50 years. But not everyone is moving with the same sense of urgency (and strategic planning wherewithal).
The Food Delivery Industry
With the ever-increasing pace of change, it can be hard to believe that just a few years ago we were limited to either pizza or Chinese food when it came to delivery options. And with the number of headlines that all-things-delivery have been making, it can be easy to become desensitized to (or overwhelmed by) what it all really means for the industry as a whole and operators, individually.
The Future of the Restaurant Delivery Industry
Tech-enabled delivery has already shifted billions of dollars to new platforms and channels. Companies that innovated in this field are still seeing incredible revenue growth: Grubhub is expected to grow at a 33% rate in 2019 and 25% in 2020 (based on consensus estimates) while the median growth for U.S. foodservice companies is only projected to be 4% in both years.
Restaurant Delivery Technology
Food and restaurant delivery tech is a hot industry. According to our estimates, some $3.2 billion in funding has poured into the restaurant delivery space — to put this in perspective, that’s just shy of the $3.79 billion that’s been earned by ALL restaurant IPOs in the last 10 years.
Many may have gotten to the point of being desensitized to what the potential of automation really means —for restaurants and for industries across sectors.
We published a post about how tech was killing off independent pizzerias back in 2016. It hit roughly 600,000 views — setting off global industry discussion and debate that continues to this day. More on pizza technology here.
Domino’s Pizza Technology
As one of the leaders to implement technological change across its operations, Domino’s top 10 innovations were key to drive the company’s stock from $60 per share back in 2013 to $250 in 2018.
We cover a handful of restaurant technologies leveraged mostly by QSR and fast-casual chains that are making a difference in guest loyalty and traffic.
Restaurant Industry Innovation Lessons Learned from a Famous Failure
Failure to modernize hurts sales, and further clinging to the stale status quo could result in a final curtain call. Some of the biggest lessons restaurants can take from the once-Greatest Show on Earth.
The Future of Foodservice
We’ve all seen the headlines about robots, digital ordering kiosks, and drones. 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.
Restaurant Technology in Menus
We cover how menu merchandising can benefit from digital menus, mobile app ordering, kiosks, interface design and other restaurant technologies.
Restaurant Technology Trends
Delivery, mobile ordering, reward programs, and bill-splitting are some of the technological trends changing every customer touchpoint in the restaurant.
Panera Tech Investments
Panera technological investments saved customers 10 lifetimes’ worth of waiting, improving the guest experience and fueling sales and foot traffic.
Restaurant Inventory Management Software
The more money a restaurant chain has tied up in inventory, the harder it is to get a handle on lowering food costs. Lately, though, a slew of restaurant inventory management software companies are improving the way to track food costs, budget menu items, and optimize inventory.
Restaurant POS Systems
Restaurant point of sale systems are becoming management platforms extending their capacity from POS systems to include digital orders and performance dashboards.
Additional Insights on Restaurant Technology from our Library
With the ever-increasing pace of change, it can be hard to believe that just a few years ago we were limited to either pizza or Chinese food when it came to delivery options. And with the number of headlines that all-things-delivery have been making, it can be easy to become desensitized to (or overwhelmed by) what it all really means for the food and beverage industry as a whole and operators, individually.
Unlike in restaurants — where, in the U.S. and other mature markets, the industry has reached a point of saturation such that any one company’s growth is coming at the expense of another — the delivery sector has not been a zero-sum growth game over the last few years. The entire industry is accelerating, and many restaurant operators are still battling with both the ups and downs of delivery.
On the one hand, there’s the low-hanging fruit of incremental sales (particularly for the casual dining sector, which has net neutral on same-store sales growth over the last decade). On the other, there are the added operational logistics that many operators feel underprepared or ill-equipped for.
Restaurant Tech Set to Improve Productivity
While other sectors have seen significant increases in productivity historically, many of which are attributable to the adoption of technology, productivity growth in the foodservice industry has been minimal over the last 30 years.
With the Second and Third Industrial Revolutions not having much of an impact on restaurant operations, the sector is now in a prime position to make modernization efforts and, in doing so, becoming ideal investment targets.
Investment Flowing to Foodservice Technology
Automated kitchens are attracting a lot of investment, from Miso Robotics, creator of Flippy, to Spyce, where robots cooks the entire meal (though they still employ humans to help customers figure out the system). For many restaurant businesses the pace of adoption is slow, so consumers shouldn’t expect that their next meal will come from a robot.
Foodservice Technology Mergers and Acquisitions
Pointing out that technology is revolutionizing the foodservice industry is now about as prescient as predicting that the sun will rise in the morning. Knowing that restaurant technologies matter is less useful than knowing which technologies can improve customer experience and loyalty while also increasing efficiency and building the bottom line.
M&A activity for foodservice-related tech companies continues to intensify, and the buy-side team is tasked not only with going through the due diligence checklist (and finding and quantifying hidden risks and opportunities), but also post-merger integration. How well a particular technology can be integrated to a larger platform is often what makes a big difference in how successful the transaction is. When the right components are combined within a platform, the whole can be much greater than the sum of its parts (and this is reflected in valuations).
Alternative Foodservice Formats Incorporating Technology Rapidly
Ecommerce giant Amazon is converging several weapons it has built or acquired into something that’s more deadly than any one component (Amazon Go, Amazon Restaurants, Amazon Basics, Amazon Fresh, Prime Now, one-click ordering, voice ordering, Whole Foods) is, independently.
And though the unit models for grocery stores or C-stores are different than those for restaurants — though we see these categories as competitors for share of stomach and wallet of the same consumer; only a handful of restaurant chains surpass Amazon Go and Whole Foods in sales per square foot. The convenience and customer experience implemented in Amazon Go will influence restaurant technology trends.
The Future of Restaurant Technology
It’s a fascinating time for restaurants around the world. The $3.1 trillion global industry is relatively predictable in terms of growth, but what was already one of the most complex businesses in the world is becoming even more so following the arrival of the Fourth Industrial Revolution.
The evolution of the marketing technology landscape sets a precedent for the evolution of technological forces in the restaurant industry. The number and complexity of the subsectors (either for Front of House or Back of House tech), as well as the competition among players in each of them (especially for cloud-based technology), will likely continue to increase exponentially, until reaching a point of saturation where consolidation will take over. The sector is now in a prime position to make modernization efforts and identifying partners becomes essential to incorporating cost-effective, brand-centric, and even proprietary technology suites.
Between 2016 and 2017, Quick Service restaurants McDonald’s, KFC, Arby’s, and Taco Bell increased the number of items in their menus, and all but Taco Bell experienced longer wait times in drive-thrus. McDonald’s, the most extreme case, grew its menu by 34%, and drive-thru speed of service for restaurant customers deteriorated by 15%.
Though menu complexity is not the only factor affecting speed of service, it’s a major influence. Menu engineering needs to take a holistic approach, weighing the balance of offering guests more options and making transactions quick and convenient.