From Bot to Burger

What does restaurant automation mean in the Farm-to-Fork Capital?

Back Longreads Dec 18, 2018 By Rich Ehisen

At the Golden 1 Center, farm-to-fork happens at almost breakneck speed. During a Sacramento Kings game, fans can place mobile orders for pizza from Selland’s or sausages from LowBrau, along with dozens of other menu items from several other vendors at the arena, and the food will be delivered without the fans ever leaving their seats — and potentially missing a buzzer-beating shot.

Opened in 2016, the Golden 1 Center has managed to merge its goal to be the most tech-advanced arena in the world with its commitment to the farm-to-fork movement for which Sacramento is known; the arena’s executive chef and restaurant partners claim to source 90 percent of their ingredients from a 150-mile radius. The Kings’ app makes these dining options available at the fingertips of up to 17,600 people on any given game night.

Ryan Montoya, chief technology officer for the Sacramento Kings, says the team is “constantly in conversations and exploring ways in which technology, including robots and automation, can continue to enhance the fan experience.” (Montoya declined to comment on any specific negotiations with automated food service companies.)

As the Kings show on a large scale, automation is changing food service in the U.S., although the industry is still grappling with how new technology will impact its workforce and the consumer experience. What’s become clear is that while fast-food chains are pioneering automation, small businesses and fine-dining restaurants still face a lot of barriers to embracing automation.

Sonny Mayugba, co-founder of The Red Rabbit Kitchen and Bar in Sacramento, notes that trends toward automation are only just recently taking hold and there’s more to come: “At its core, the restaurant industry is an old, archaic, inefficient system. It needs some automation.”

No matter the kind of operation, Mayugba says it will be successful only if operators keep one thing in mind: “What’s most important is that we look at how automation and AI enhance the customer experience. That’s the key.”

HUMANS VS. ROBOTS

Walk into a McDonald’s nowadays, and the savory aroma of their signature french fries will be just as you remember. But something else will be much different: Instead of ordering them from a person, now you can belly up to a kiosk to make your request.

McDonald’s began integrating kiosks in their U.S. stores in 2016 and plans to have them installed at all locations by 2020. Wendy’s, Panera Bread, Chili’s, Domino’s and a growing number of other fast-food and fast-casual eateries are following suit. As automation, machine learning, robotics and smartphone app-based delivery become more ubiquitous in the industry, it raises the question of whether food service jobs, once thought reasonably immune to automation, are actually as vulnerable as any other.

Mayugba likens the fears of dwindling employment opportunities in the food service sector to those over automated teller machines decimating bank teller jobs. That didn’t happen, he points out; instead, teller jobs actually increased.

Sharokina Shams, vice president of public affairs for the California Restaurant Association, says humans don’t appear to be losing ground to robots and technology yet. “What we have now are a lot of anecdotes and stories about what might happen, but there is certainly nothing to show that automation is costing any jobs right now.”

If anything, the tightest labor market in decades has led to a labor shortage throughout the industry, particularly among those aged 16-19, a demographic the industry has traditionally relied upon for much of its workforce. According to federal labor statistics, food service employment across California — the home of most cutting-edge automated food service technology — grew by 45 percent between 2001 and 2016. The California Department of Labor projects that trend will continue in the Sacramento region at least several more years, with employment in food preparation and serving in Sacramento, Yolo Placer and El Dorado counties growing by over 28 percent between 2014 and 2024.  

Meanwhile, U.S. Bureau of Labor Statistics data from August showed the industry has almost 900,000 unfilled positions, a 20 percent spike over the same month last year. That lack of workers has created what Panera Bread CEO Blaine Hurst calls “a war for talent” among restaurants.   

Panera added around 13,000 jobs nationwide since the start of 2017 to facilitate the company’s new app- and web-based delivery service. Most are delivery drivers, though the company says it has also added significant in-store personnel to manage additional sales.

McDonald’s and Panera stores throughout the Sacramento area have both implemented kiosks, but visit during a busy lunch hour, and plenty of employees will still be on hand to manage orders, serve food and answer questions. Managers all swear the kiosks haven’t changed staffing.

The Berkeley-based Restaurant Opportunities Center United — a staunch advocate for food service workers — thinks concern over automation costing jobs is overblown. “The research shows that the impact on jobs is going to be small,” says Teófilo Reyes, ROCU research director. “We know automation is going to change things in the industry, but how much is still a completely open question.”

AT THE FOREFRONT

In San Francisco, startup gourmet burger joint Creator uses a massive robot to create burgers filled with hormone-free chuck and brisket formed into a patty designed for the ultimate mouthfeel. But Creator also has plenty of human workers, and company founder and CEO Alex Vardakostas says that using the bot allows him to pay them $16 an hour.

Elsewhere in San Francisco, the robotic barista at Cafe X can make you anything from a basic espresso to a perfect flat white or a nitro cold brew. But every Cafe X also has at least one human on duty at all times to help customers with their orders, keep things tidy and ensure the robot never runs out of artisanal beans.

“We are elevating the role of the traditional barista, allowing them to focus on the human aspect of the job, which most of them really enjoy,” says Cynthia Yeung, chief operating officer at Cafe X. “The idea is to let the robots do what robots are good at, things that require a high level of precision, and have humans do the part of the job that humans are best at.”

Shams, of the California Restaurant Association, says that these operations are pioneering more than just a new way to make food. “More and more we’re seeing operations created and run by people who are primarily tech entrepreneurs like … Cafe X, who choose to operate in the food service space — not the traditional culinary people who take the step of opening a restaurant to showcase those skills,” she says.  

“About 85 percent of our members are independents …If I tell them all the great things the big chains are doing with automation, they’re going to say. ‘That’s nice, but I can’t afford that.’” Sharokina Shams, vice president of public affairs, California Restaurant Association

But novelty may not equate to quality. And is a city like Sacramento, that prides itself on being on the leading edge of the farm-to-fork movement, the kind of market that would embrace the Cafe X robotic barista the way San Francisco has? Mayugba thinks the success of something in a tech-heavy place like San Francisco doesn’t mean much for how it would be received in other locales.

“If something works in San Francisco, we actually red flag it because that’s utopia right now,” says Mayugba. “San Francisco and Boston and San Jose are places where true innovation happens, but to grow those ideas they need to work in Anywhere, USA. You want something to work in Sacramento because it is Anywhere, USA.”

Cost is also a major hurdle. Yeung declined to confirm the cost of Cafe X’s robotic baristas, but it has been widely reported that each runs at least $25,000. The “Flippy” cranks out hundreds of perfectly grilled patties a day for the hamburger chain CaliBurger, aided by human workers who lay out the patties and put the burgers together — and is reported to cost between $60,000 and $100,000. Shams says in an industry where profit margins often fall in the 3-5 percent range, that is cost prohibitive for most small operations.  

“About 85 percent of our members are independents, either as franchisees or as truly independent mom-and-pop operations,” Shams says. “If I tell them all the great things the big chains are doing with automation, they’re going to say. ‘That’s nice, but I can’t afford that.’”

THE HUMAN TOUCH

At the 2018 State of Sacramento County luncheon this past November, keynote speaker Larry Kosmont — CEO of Kosmont Companies and an expert on economic development — spoke about the impact of automation on the workforce and efforts to court the U.S. millennial consumer, which at 80 million strong represents $600 billion in buying power. He said the jobs at risk are physical ones in predictable environments; for example, fast-food workers. And while many jobs will be replaced by automation, this shift will also create new jobs.

A city like San Francisco may be on the cutting edge of automation, but elsewhere, where the appeal of a robotic chef may be lost on consumers, ordering food from a delivery app that is then delivered by a self-driving car is more feasible. Consumers throughout the Sacramento area have several apps through which to get food delivered to their doors, including DoorDash, Postmates and the Sacramento-based FoodJets. (The self-driving car part isn’t yet on the radar.)

During Kosmont’s presentation, he said the new millennial consumer is attracted to a sense of place and to an experience. That’s what will get them out of their houses and into brick-and-mortar businesses — like entertainment centers, breweries and, in Sacramento, the farm-to-fork restaurants for which the city prides itself.

For Patrick Mulvaney, owner of Mulvaney’s B&L in Sacramento and a nationally recognized chef at the forefront of the farm-to-fork movement, automation is not likely to be key to his operations anytime soon. He says automation’s advantages — the ability to produce the exact same product in the exact same way every single time — are lost on a restaurant with a constantly changing menu irrevocably tied to seasonal availability. Even something as simple as tomato soup would be problematic, he says, “because the tomato soup I want to make changes all the time.”

Kurt Spataro, executive chef for the Paragary Restaurant Group, agrees, saying automation lends itself much better to fast food or fast casual than higher-end fare. But he can see where the right technology would work for other tasks. “Robotics could do a lot of the tedious or time consuming prep work, like prepping artichokes or cutting vegetables,” he says, noting that his kitchens serve about 1,000 salads a week.

Mayugba thinks there is a role for automation even in fine-dining restaurants focused on the farm-to-fork mantra, perhaps in food prep or cleanup. For food service with a captive audience like at the Golden 1 Center, it makes sense to prioritize speed over charm, because who wants to miss a game-winning shot while ordering a hot dog? But for smaller brick-and-mortar establishments and sit-down dining, a human touch is essential.

“Every restaurant has to understand what makes their specific customer experience work for them,” Mayugba says. “Most people want that human experience from a food place — they want to know the servers and owners, and they like that those people know them.” 

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