Cloud Computing, Big Data Aid Struggling Restaurant Industry

To help them cope with a global pandemic, restaurants are cooking up new trends like ghost kitchens, robots and online ordering.

By Jacob Gedetsis

By Jacob Gedetsis November 03, 2020

With the right lighting, the perfect menu and attentive staff, a restaurant can transport its patrons to a new world of culinary possibilities. Chefs work to create the perfect bite while the front of the house hurries to provide a seamless guest experience.

“Restaurant operators don't go into this business to be technologists, MBAs or lawyers. They go into this industry for the love of food and community,” said Perry Quinn, senior vice president of business innovation development at the National Restaurant Association.

But restaurateurs can no longer afford to cling to their original intentions. Because COVID-19 has forced restaurants around the world to close their indoor dining rooms in the name of “slowing the spread,” they must replace the old ideas that brought them into the business with new ones that will help them stay in business.

To help them do precisely that, organizations like the National Restaurant Association held virtual conferences with industry leaders during which they compiled strategic plans for helping not only their members weather the pandemic but the entire global economy. After all, in the United States alone, the restaurant industry employs more than 16 million people who account for nearly 10 percent of the workforce. If restaurants fail, they could very well take the rest of the economy with them./p>

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Fortunately, restaurants have proven that they can serve their meals with a side of innovation: With margins tight even in normal times, they have embraced technology to cut costs while maintaining high standards. In fact, technology has proven so fruitful for restaurants during the pandemic that analysts are now urging the restaurant industry to permanently embrace solutions like cloud computing, artificial intelligence and machine learning to diversify their revenue streams, collectively bargain, and provide a safe experience for guests and employees alike.

Online Delivery Booms

In the last five years, restaurant delivery has grown 20 percent, according to Morgan Stanley. And while analysts disagree on the exact estimate, it predicts delivery sales could grow to $220 billion by 2023.

With its pervasive stay-at-home orders, mandated dining room closures and persistent labor shortages, COVID-19 has only accelerated this trend.

Services like DoorDash, Grubhub and UberEats dominate the market and provide turnkey tech infrastructure for independent restaurants that need it.

“At the start of the pandemic, there was a rush for every restaurant to do their own ordering app, which is like everybody trying to do their own internet,” Quinn said. “Restaurants quickly realized that their efforts were better spent elsewhere, and many opted into the larger ecosystems that third-party delivery services provide.”

Delivery partners have provided not only a coveted service but also valuable community support, according to Quinn, who in particular, lauded the community contributions of DoorDash, which was conceived in a dorm room at Stanford University and has since grown to serve diners in more than 4,000 cities. In response to the pandemic, the company suspended delivery fees and has donated more than $500,000 to support small businesses.

Shortly after its launch in 2013, DoorDash decided to migrate its IT infrastructure to a cloud-native solution, which allows it to quickly scale as it continues to grow. It also gives the company access to various cloud-based applications that help it collect, track and analyze data about its customers’ ordering habits — a trend that’s sweeping the restaurant industry and informing creative strategies for combatting losses due to COVID-19, according to Quinn.

Data-Driven Solutions Cut Costs

Because they recognize the power of big data and cloud computing, food industry giants like DoorDash and Starbucks have been harnessing them for years, noted Quinn, who said restaurants that previously invested in technology are having an easier time during the pandemic.

But data isn’t only for the big guys. The COVID-19 pandemic also has brought data to small and independent restaurateurs, who are uniting in an unprecedented way by using technology to share information and purchasing power.

For example, Quinn has seen smaller restaurant groups embrace data sharing as a means to collectively bargain with wholesale providers. Take companies like Simple, which has filled a crucial tech gap for independent restaurants that don’t have the time or know-how to monetize their data. It describes itself as a “marketplace and digital restaurant that streamlines the buying and selling process, using data at the core.”

“There are such little margins in this business that if technologies can knock one [percentage] point off [your costs] … it's material,” Quinn said. “New systems like Simple are tying together lots and lots of restaurants. The entire group will benefit from that network’s data as if they were larger providers. It allows them to go to suppliers and say, ‘Hey, can we get a discount?’ or pool together purchasing of garbage bags or food or whatever to cut costs.”

Quinn believes that sharing data and best practices using platforms like Simple will not only help independent restaurants survive the pandemic but also build a more collaborative industry in which to work after it’s over.

Ghosts, Robots Ready for the Dinner Rush

Less than a decade ago, the only place to find ghost kitchens and burger-flipping robots were in the poorly written plot of a low-budget science fiction film. In 2020, however, these once fantastic ideas are promising realities for the future of the restaurant industry.

Ghost kitchens — sometimes called virtual or dark kitchens — allow restaurateurs to cut costs by foregoing real estate, labor and dining room expenses in favor of small, focused operations that prepare food in shared commercial kitchens exclusively for delivery. Companies like UberEats use delivery data to help restaurants determine where market opportunities exist.

“When you take all of that data and you notice that delivery drivers have to go pretty far for Thai food, that means there's a market opportunity for Thai food — at least from a delivery perspective — in this region,” Quinn said. “So a company like Uber will encourage an investment in the area, and all of a sudden a ghost kitchen pops up that fulfills this demand that they realized was just outside of the convenience zone. Most people will just order because of that.”

In recent years, digital ordering kiosks and tablets also have become popular, and full robotic kitchens might not be far behind. This fall, for example, White Castle will deploy Flippy, its first robotic fry cook. Halal Guys and Applebees, meanwhile, are in the early stages of testing DrinkBot, a robot that mixes pre-set beverages in just 20 seconds. Even autonomous delivery robots have hit the streets in big cities and college towns across America.

In a recent study, researchers at Ball State University found that many restaurant owners are open to exploring robotic solutions to cut rising labor costs. Dina Marie Zemke, an associate professor and one of the study’s lead researchers, said that many focus groups she spoke with viewed robots in hospitality as inevitable. And they may be right, as the study found that robotic technologies not only cut costs but also attract customers.

“At this point, a lot of people have a positive impression of robotic technology that entices guests to visit the location at least once, although they were unsure whether the robotics would sufficiently overcome average food or service to entice them to return to the restaurant a second time,” Zemke said in a press release.

“This is consistent with past examples of restaurant concepts that provided a highly unique experience but suffered from the reputation that the guest would visit once because of the ‘experience’ but would not return because the food was too expensive and/or the food quality or service provided a poor value overall.”

Ultimately, innovations like delivery, big data and robotics will help push the restaurant industry forward, Quinn said, and help diversify revenue streams for every type of restaurant — big and small.

However, the National Restaurant Association is working hard to get diners back into their favorite restaurants and ensure a safe environment for food service workers.

Concluded Quinn, “We … work very diligently to preserve jobs, and to lobby for a safe return to the restaurants we all love.”

Jacob Gedetsis is a contributing writer. His work has appeared in The Kansas City Star, The Post Standard and The Plain Dealer, among others. Find him on Twitter at @JacobGedetsis.

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