Reinventing Restaurants: Healthy Fast-Casual, Robots, & Automation
When fast-food restaurants first came to market, convenience, not consumer health, was the driving force. But there’s a cultural shift underway attempting to knock the Big Mac off its pedestal.
The healthy fast-casual restaurant is something that Chipotle’s ethical sourcing and health-minded, assembly line-style operation arguably popularized. But a new wave of eateries have perfected it, fueling the rapid growth of the fast-casual restaurant market that’s expected to reach $67B by 2020.
And it’s not hard to see the appeal: fast-casual eateries offer made-to-order, customizable, and healthy food in a format that caters to an increasingly urban population in need of speed and convenience. But the next innovation is already underway: this streamlined service has shown the workforce the door, opting for a future where robots and automation define the fast-casual experience.
Fast-Casual Nation
The meteoric rises of poke bowls and $20 salads are being driven by a change in consumer tastes and a preference by younger generations for convenience, customization, and, above all, chef-driven, healthier choices. And despite denials from Applebee’s CEO that millennials are killing family dining, the writing is on the wall.
Sit-down chains like Applebee’s and Ruby Tuesdays have fallen out of favor. Instead, they’ve been replaced by options like Sweetgreen, Tender Greens, and Chopt, who peddle good-for-you, quick-service salads to the masses. And although becoming increasingly saturated, the fast-casual market is lucrative, especially compared to fine dining and casual sit-downs. As reported by Restaurant Business, fast-casual restaurants will grow by 7.5% this year. Meanwhile, fine dining and family restaurants will grow by a fairly flat 2.7% and 1.8%, respectively, over the same period.
The market’s reaction to this obvious disparity has been systemic, as everyone from fine dining chefs to deep-pocketed venture firms are aiming for the same sweet spot: healthiness and affordability.
Small-scale, once-independent concepts are being encouraged to expand rapidly by investors like The Kitchen Fund and EHI, who are writing multi-million-dollar checks to scale restaurants with as few as one successful shop. And while only one in 100 will find cult fandom like Sweetgreen, investors are ready to roll the dice on copycats. Evidence? Micro-customization is hot. So many of these concepts are finding more-than-favorable profit margins and lines out the door by serving their fare in DIY bowl form. Just look at the ride poke is on, where in Denver, we’ve found it to be at epidemic levels. Meanwhile, CoreLife Eatery, a clean-eating bowl concept with global flavors, posted triple-digit growth in both sales (241.4%) and US units (187.5%) in 2017.
But the fast-casual movement isn’t limited to eateries serving meals in a bowl. Organic, farm-to-table fast-casual spots like Flower Child, where 45% of orders are to go. And Mediterranean fast-casual player CAVA bought Zoë’s Kitchen for $300 million, expanding CAVA’s reach from 66 restaurants to 327 across 24 states.
It seems aggressive, but cash-strapped and time-poor consumers are clamoring for more. And they’re demanding the best of both worlds: quality ingredients and bargain prices — something that in the restaurant biz had been mutually exclusive until recently. According to David Strasser, managing director of Swan and Legend Venture Partners, the key is process. In an interview with The Washington Post, “the largest and most successful fast-casual chains are process-driven. They know how to manage complex — and massive — tasks without sacrificing the quality of their food or service.”
But one thing all restaurateurs—meaning more than just a lucrative fast-casual chain—will be keeping their eye on is a development that could completely blow up how the entire restaurant business operates: the rising minimum wage. In major cities like New York City, restaurateurs and chefs are claiming it will affect how they operate completely. Sebastien Muller, director of operations at Le District (a massive upscale food fall in NYC), said in an article:
“Do you think it is a coincidence that stores are eliminating cashiers and automating checkout?” he asked. “Airport restaurants are moving to electronic service, McDonald’s will figure out more ways to automate.”
It’s clear that speed, customizability, and precision preparation (along with quality ingredients) will rule food’s foreseeable future. And to save bottom lines, companies and investors have found someone who won’t picket the restaurant for higher wages: machines. Venture capitalists and pioneering restaurateurs are giving robots the foothold they need to start invading our healthy, grab ’n’ go lifestyle.
Compliments to the chef
Fast-casual spots, salad + bowl joints, and poke places are already so pick-and-choose that the exchange between “salad artist” and customer is pretty robotic already.
Starting with the most casual of innovations and automations, places like stir-fry hit honeygrow, the all-digital, food locker experience of Eatsa, and Guac Burger-slinging by CHLOE. have adopted touchscreen kiosk ordering that make your experience almost inhuman from the jump. The Washington Post cites speed, flexibility, accuracy, simplicity, and the ability to upsell items with a no-pressure prompt as reason enough for restaurants to take conversation (read: real people) out of the game. Even legacy giants have upped their R&D budgets.
But kiosks are just the start. If you take into account the amount of tech investment being made into the fast-casual space, all signs point to robot chefs as the next evolution in the fast-casual movement. And, if you think about it, the fast-casual money-making machine is actually well-suited for machines to man the stoves.
“Robots, of course, are great at repetitive, manual tasks, especially in high-traffic, high-volume establishments. They don’t call in sick, don’t get tired and don’t ask for a raise. And with new breakthroughs, robots are getting better at doing more delicate tasks, which is necessary when handling food,” says Chris Albrecht, writing for The Spoon.
Let’s first look at Boston’s Spyce Food Co., the brainchild of four MIT grads who have now raised $24.8M to date after a successful $21M Series A funding round bolstered by venture capitalists Collaborative Fund and Maveron. The 15-seat restaurant has replaced line cooks, dishwashers, and prep chefs with robots, effectively cutting the typical fast food restaurant budget in half. Most importantly, they’re serving high-quality, healthy food—like vegan, vegetarian, and gluten-free grain bowls—while making the food cheaper for customers. It’s a dynamic very few have been able to successfully achieve.
Meals-in-a-bowl—grain, poke, acai—are as popular as they are programmable, and if you have a machine that can harness the salad and the bowl trend in one well-oiled space, you’re going to see some success. That explains The Bay Area’s Chowbotics, who, after perfecting automated salad-dispensing, raised $11M in Series A funding to pursue bowls.
Even the hottest American comfort foods, and ways of life, are feeling the cold touch of a robot arm. We’ve already mentioned Eatsa, but the big news is SoftBank Group Corp.’s plan to invest between $500M and $750M in Zume, an automated, software-driven startup that “owns a patent for delivery trucks capable of cooking food while it’s en route to customers,” as described by Bloomberg. The California startup has ambitions to partner with UberEats and DoorDash in the future, which could usher in a whole era of pizza delivery… one that doesn’t rely on semi-effective insulated pizza bags.
The assembly-heavy process of burger-making seems poised for robot takeover, too. Creator, a San Francisco-based burger joint, has been able to offer a gourmet, artisan, sustainable burger for around $6 with the help of their patented machine that can make a burger in about five minutes. TechCrunch obtained SEC filings that report Creator raised around $18M in 2017. And thanks to a partnership with indoor vertical farming purveyor Plenty, everything you know about the American burger institution could change.
Baristas also have an X on their backs. We’ve seen it in the form of San Francisco’s Cafe X, who have found a way to enhance the modern-day coffee shop experience at scale. Their cafe reduces wait times and cuts workforce costs while providing the same local, craft coffee beans as their neighboring shops.
And for dessert, we have soft serve from an automated vending machine. Bar Moxy, in Manhattan’s Moxy Times Square hotel, has an on-demand ice cream vending machine that accepts cash, credit, and Apple Pay.
I, Robot
While automation isn’t without its glitches, the fast-casual market is poised to put robots to work. And while we all secretly fear the world Isaac Asimov painted in I, Robot, most people will admit that getting their food faster, cheaper, and healthier with no chance of attitude from their server is enticing.
Yet, human emotion—and fandom—cannot be automated. As Basu Ratnam, founder of popular Indian fast-casual restaurant Inday, explained in an article, “You need evangelizers, you need a tribe waiting on line for your food everyday, and you can’t reverse-engineer that.”
What do you think? Is the rise of machines fine for fast-casual or do you prefer your Buddha bowl with a human touch?
Want to get in touch? Email anthony@fitt.co with tips, questions, or to continue the conversation.