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The perfect storm: how technology is changing the food service industry

Take a look around. The world is changing with rapid steps. Literally 15 years ago we ordered pizza by phone call, we couldnā€™t imagine that we would be able to watch in real time how it was being prepared, and even more so on the map, how the courier was going to our house. Now it seems familiar and ordinary. To understand where the world is moving now, we decided to analyze and share with you technological trends in the catering industry.




How are technologies changing the food service industry?

Grandiose! Most likely, this word is suitable in this case. The impact of new technologies on the restaurant industry and the fast food industry has been just grand di lazy lately! The Internet and mobile phones have completely changed the approach to ordering, producing and consuming food.

Instead of procrastinating the menu in restaurants, customers use their phones to order delivery. Instead of asking their friends for advice, people study the reviews left by completely strangers on the Internet.

Software is eating the world - software devours the planet and more and more new industries. And today, any restaurateur wonders: what will be left of the traditional food industry?

This article is an overview of the most important (in our purely personal view) market changes that are changing the entire industry. So what else do technologies do?

1. Take the delivery market to a new level


I myself have never ordered anything at Deliveroo, UberEats and other similar venues. And honestly, I canā€™t understand why other people do it.

For me, lunch in a restaurant or cafe is a good reason to go out and see the world. To sit at home or in the office, eat out of plastic containers and pay more for it? Thank you but no.
And yet, I know that for the rest of humanity, delivery is almost a new religion. Someone worships her, someone wants to fight her. In any case, this is not easy: food delivery is a high-tech business, and creating your own IT solutions in this area is very expensive. In delivery, a lot depends on the scale.

Therefore, someone believes that the world of the future belongs to giant technology companies. By 2024, the global delivery market is expected to exceed $ 160 billion . And yet I donā€™t think the game is over. Aggregators have a problem: they pay little to restaurants and drivers and continue to be unprofitable. So let's see how it all ends.

2. Lower barriers to launching your restaurant


The growth of delivery, no matter how contradictory it may be, helps to develop a new business model: dark kitchen. And this is another ā€œhotā€ novelty in the fast food market.

The idea is simple: if people order delivery via applications on their smartphones, why pay for expensive rooms in the city center and invest money in the design of the room? Instead, you can rent a small corner in an industrial building and sell cheaper dishes exclusively through delivery platforms.

There are many startups (CloudKitchens, Karma Kitchen, Kitchen United, Taster and Keatz in Europe, Kitchen in an area in Russia) that seek to capture this market. And some delivery aggregators, such as Deliveroo, have launched their own dark kitchen project. And even McDonald's goes to this market.

Fedor Ovchinnikov (founder of Dodo Pizza), considers this model not very stable ( the ā€œdark kitchenā€ craze is nonsense ), because it depends too much on aggregators. It is almost impossible to make a big business only in a virtual restaurant.

Nevertheless, millions of dollars flow into such projects, and this allows people with almost no capital to start a restaurant business. Lower investment in launching a virtual brand compared to traditional restaurants is likely to stimulate the growth of this market in the near future.

3. Change the way people place orders


Thanks to the kiosks installed in many fast-food restaurants, now you can order a burger and french fries without saying a word (however it would be nice to say at least ā€œthank youā€ when you pick up your food from the dispenser).

No queues - and enough time to study everything on the menu. For business, these terminals are also convenient, as they increase efficiency.

But is this a long-term solution? Maybe a smartphone in your pocket will be the best "terminal"? You go to the cafe or restaurant application and place an order while you are on the go so that the food is ready for your arrival. Conveniently. And the application will remember your billing information, order history and preferences.

Chick-fil-A launched a mobile applicationfor ordering at a restaurant last year. This American brand is not the only one who is already using its application to improve its customer experience.

At Dodo, we also choose the app instead of self-service pizza stalls. We announced a new mobile solution for restaurants in July last year during the annual Congress of Partners. The release is scheduled for this spring.

4. Make us talk to robots


I want some coffee. You can just say it out loud, standing in the middle of your apartment, and get it. In about 30 minutes. If you have a smart speaker, of course. And if you live in the USA or in China.

While some brands give you the option to avoid talking to someone when placing an order, others want you to get rid of screens, clicks, and taps. They want you to talk to robots.

In 2019, Starbucks introduced voice orders in China through Alibaba's Tmall Genie smart speaker. The coffee brand is not the only one using the new technology. Domino's has been accepting U.S. orders through Amazon's Amazon from 2016. And Panera Bread since 2017.

So far, even tech-savvy brands have focused on customer retention and repeat orders. The customer selects their favorite dish, and then order it again and again using voice commands. But there is no doubt that soon robots with AI will be able to maintain full-fledged dialogs with customers and accept even the most complex orders.
A number of startups - Bensen AI, Clinc, Inc. and Valyant AI are already moving in that direction, not to mention Google, Amazon and Apple, which are constantly improving the capabilities of their voice assistants.

5. Make customization painless


The ability to repeat the order in the application is a small but eloquent example of the trend towards personalization. With the help of new technologies, restaurants and fast-food cafes can store data on the preferences of their guests and quickly deliver dishes that are ideal for each client.

Most of this magic, of course, happens on phones and on the Internet. You can repeat your previous order in just two clicks or get an individual, attractive offer based on the history of your orders.

And that's not all.

Identifying customers who are having lunch at your restaurant right now has always been a problem. Modern AI can easily recognize faces, but the law and the public are categorically against it. This is probably why in 2019McDonald's bought the Dynamic Yield AI -based personalization platform .

Dynamic Yield technology is especially useful for drive through: it can identify license plates, match them with orders and store this data for further analysis and personalization. Other brands of fast food in the United States, where drive through is very popular, also invest in such technological solutions.

6. Change the way orders are processed


As has been done in the restaurant industry for decades: you accept an order, print, attach it to a wall or shelf next to other orders, while the team in the kitchen processes them one by one.

Digitalization has brought something new to the familiar process. A tablet in the kitchen can instantly show all orders coming from customers through different channels. He can also track the degree of order availability while he goes through different stations in your kitchen. At the same time, you can track the moment the preparation of the order begins and the moment of issue.
Eliminating chaos is not the main advantage of the system. Digitalization allows restaurants to collect important data, such as workload and speed at any given hour. Such knowledge is crucial for forecasting and planning shifts.

For example, we can measure how long a pizza lies on a heat shelf before it is picked up by a courier. A useful metric that, among other things, shows how effective our delivery operations are.

7. Improve the take-away customer experience


Although now everyone's attention is focused on delivery, I put on the market "takeaway food."
Now you can make an order via phone on the way from work and get ready-made food for your appearance in the restaurant. A separate queue for pick-up orders ensures that you donā€™t have to wait long to pick up the order.

Recent development experiments make this area even more interesting: companies are testing self-service solutions that allow customers to pick up orders from automated kiosks on their own.

Starbucks has its own Starbucks Now project. Pizza Hut is testing the same approach in Hollywood. Finally, Little Caesers has the so-called Pizza Portals, a self-service station with a pick-up function.

This new approach is not only very attractive to customers, but also makes sense from a business point of view. While delivery operations increase costs and make it difficult for a restaurant to make a profit, automated stations reduce costs.

8. Turn everyone into cooks


If you think about it, many now-popular technology business models could appear without any advances in technology. For example, the market for ready-made food packages.

The idea is this: if you are lazy, then you do not cook food, but order food for delivery. If you are lazy, but not quite, then you can subscribe to the delivery service of ready-made food packages, such as BlueApron or HelloFresh.

You still need to cook, but without the usual hassle. You get the required amount of ingredients and clear instructions for their preparation. Everyone can cook!
Technically, you do not need an application or website to use the service. A printed catalog could handle the choice. But for some reason, it was only with the advent of delivery companies and online services that people began to think that food packages could become indispensable.

Is it so? Major players are participating in the game, and experts predict that by 2025 the global market for the delivery of cooking sets will reach $ 9 billion. However, it is not yet clear whether this business model is sustainable.

Many brands in this market struggle to retain customers and remain unprofitable. Some of them started selling their kits at grocery stores or looking for other partners.

9. Help fight fast food waste


We throw out 30-40% of the products we grow. It has been established since time immemorial. However, with the help of modern technologies, we can do a lot, at least in the field of fast food and restaurant industry.

For example, we can sell surplus food at a reduced price at the end of the day. There are online markets for this (for example, Karma or Too Good To Go).

You can analyze your workflow and improve it with AI. Place the scales connected to the computer under the bin. Place the camera over the bucket. Use computer vision to track exactly what is being thrown and analyze this data. Several companies are working in this direction, for example, Winnow and Leanpath.

Finally, we can make more accurate forecasts on our own or with Fourth, Tenzo, and other startups. If you can accurately predict demand, you can buy the optimal amount of food (which means that the amount of waste will tend to zero).

Now you can make forecasts based on many complex factors (day of the week, weather, city events, salary days, etc.) as long as you provide your software with data. That's why the digitalization of all your processes is so important - even for restaurants.

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