First it was digital. Then mobile. Then delivery. Now we’re on the ground floor of yet another major disruption in the restaurant industry – automation.
Automation is far from critical mass at this point, but it is an industry-wide narrative stoked by startups and stories like Flippy, the robot who turns burgers, and a San Francisco robot barista that creates up to 120 drinks per hour.
One startup is automating the pizza preparation process to alleviate repetitive work for employees and also keep them safer. Zume Inc., which was founded in 2015, added its new robot, “Vincenzo,” in June to remove pizzas from 800-degree ovens. Vincenzo joins Zume’s other robots that recognize when pizzas are done, spread pizza sauce and move pizzas to racks. The company has turned the heads of some investors and, according to Bloomberg, SoftBank is in talks to invest up to $750 million in Zume.
According to CEO and chairman Alex Garden, Zume’s Food Delivery Vehicle system can churn out about 120 pizzas per hour. For context, Domino’s claims to sell 2 million pizzas per day across its 15,100 global system, which comes out to an average of 132 pizzas per store per day. Because of these efficiencies, Garden believes automation will rapidly make its way into the restaurant industry.
“We’ll really start to see this in the next 12 months,” he said.
He notes that Zume is not a franchised pizza company, though there are plans to roll out more locations in the San Francisco market by the end of this fiscal year. The company is more focused on scaling its proprietary technology to make it available to any grocer, quick-service operator, convenience store, etc.
“We designed everything that Zume uses as a platform technology – not just automation, but logistics, infrastructure, operations. It’s all available,” Garden said. “I am up to my eyeballs in discussions with a number of companies about this technology who are starting to understand the applicability better. I wildly underestimated the market demand for this.”
The great labor debate
From a business perspective, automation seems like a prudent solution to rising labor costs. According to Restaurant Business, higher wages cost restaurant chains as much as $250 million in 2017. But when people’s jobs and livelihoods are on the line, the conversation runs much deeper than the bottom line.
According to 2017 research from Cornerstone Capital Group, between 6 million and 7.5 million U.S. jobs are at risk “in the coming years” due to automation.
However, Garden believes automation will complement – not replace – human labor, calling the concept “cobotics.”
“We are looking to leverage automation, not to eliminate human jobs, but to eliminate repetitive work and therefore free people up to do higher-value work,” Garden said.
Pizza was a good place to start, he added, because it entails much of that busywork and because his team could incorporate their robotics expertise into custom-built equipment. He is aware of the job-loss predictions that preoccupy conversations about automation, but he is adamant that the future is not a “machine-controlled dystopia.”
Garden points to the industrial revolution as a case study.
“Jobs were actually added during that time. Industries were disrupted and there was a shift in what jobs were no longer necessary, which caused people to find other, more meaningful jobs. The automatic loom got rid of weavers, but the economy then demanded more sewers,” Garden said.
Garden also notes that the incorporation of automation means companies will have to shift their mindset about employee roles. For instance, McDonald’s CEO Steve Easterbrook has been vocal about the rollout of self-order kiosks providing an opportunity to transition cashier positions to “more customer service roles such as table service.”
What is also lost amidst all of the “labor replacement” doomsday theories is the fact that the restaurant industry is navigating its lowest unemployment rates on record – at 6%. As University of Michigan labor economist Donald Grimes told the Wall Street Journal, “If businesses were just using machines to replace workers, you would see high unemployment in the industry. But you’re not seeing that at all.”
This nugget of information is Garden’s sweet spot.
“For the first time in 20 years, we have more job openings than jobless people. We have to solve that problem,” he said. “When we automate a dangerous, repetitive task, we don’t get rid of that person. We train them and promote them and allow them to do more meaningful work.”
Data from the National Restaurant Association also doesn’t indicate an impending wave of robot-induced mass layoffs. The restaurant industry currently employs 14.7 million employees in the U.S. The NRA predicts that the restaurant industry will employ 16.3 million Americans by 2027.
Automation is here to stay, and the good news for workers – so far, at least – is that cobotics seems to be consumers’ preference. Technomic research shows that 85% of consumers have used a self-service kiosk to order and pay in a restaurant, however 60% of consumers still prefer service from an actual human being.
“It is our responsibility to tell the story of what automation could mean. We have a responsibility to do the right thing and that doesn’t mean destroying jobs,” Garden said. “I believe artificial intelligence and automation will create more jobs in this industry than it will destroy. I believe that.”
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