Restaurant Staff Shortages Pique Appetite For Automation

With pandemic restrictions loosening and vaccination rates rising, dining out is once again topping Americans’ list of favorite leisure activities.

But while more of us are flocking to restaurants, we’re not seeing a proportional rise in people showing up to prepare and serve our food.

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Across the country, restaurant operators are reporting steep staff shortages, and are struggling to hire both cooks and wait staff. While some of the hiring crunch may be temporary, alleviated with time or more enticing pay and perks, industry insiders also see potential for challenges to persist as restaurant expansion exceeds workforce growth.

“There is a temporary labor issue because everyone is hiring at the same time. But the bottom line is there aren’t enough people in the labor pool,” said Buck Jordan, co-founder and president of Miso Robotics, a restaurant automation startup best known for its burger-flipping robot Flippy.

Miso is one of several funded startups in the restaurant automation space developing labor-saving technologies. With offerings ranging from table-bussing robots to order-directing software, U.S. venture, seed and crowd-funded companies have raised close to $600 million for their efforts, mostly in the past three years, Crunchbase data shows.

In particular, startups are betting they can put a dent in hiring costs by automating a number of routine tasks. From robot baristas and salad makers, to fully machine-operated smoothie kiosks, upstarts are collectively offering a vision of our dining future that features tasty foods prepared fresh with minimal human involvement.

The players

A search through the Crunchbase funding dataset unearthed at least 10 U.S. startups in the restaurant automation space that have raised a few million dollars or more. We lay them out in the chart below:

SoftBank and Khosla Ventures look to be particularly active investors in the space. SoftBank is a lead investor in Zume, the largest funding recipient, as well as Bear Robotics. Khosla, meanwhile, is a backer of Cafe X, Creator and Spyce.

A hot space, but a difficult one

Looking at the track record of investments, business model pivots, closures and exits, one gets the impression that restaurant automation is both a popular space with VCs and a difficult one in which to deliver.

A primary case in point is Zume, which raised $423 million in total funding, including a $375 million SoftBank-led round in late 2018, with a vision for an autonomous, robot-enabled pizza delivery platform. By early 2020, the company had shut down its pizza business, pivoted to focus on sustainable packaging, and laid off hundreds of employees.

Another is Brightloom, which originally started out as a high-tech quinoa bowl-focused restaurant upstart called Eatsa in the San Francisco Bay Area. Eatsa, which opened in 2015, has since shuttered. Its team pivoted to focus on a customer analytics and loyalty platform for restaurants, renaming the company Brightloom and drawing backing from Starbucks.

And Spyce, a Boston-based startup that operated a largely robotic restaurant kitchen serving up healthy food bowls, shut down in late 2019 to revamp its offerings. The company re-opened restaurants this past November.

“It’s a super hot space, but it’s very hard to solve for,” Jordan said of restaurant automation, noting that many startups struggle because they are working on both developing underlying technology and building a consumer brand.

That said, there’s also some exit paths open. At least two funded companies in robotic food prep space were bought by deep-pocketed acquirers in recent months. Briggo, a startup that lets mobile users order coffee from automated kiosks, was sold to Coca-Cola’s Costa Coffee unit in November for an undisclosed sum. Then in February, DoorDash acquired Chowbotics, a maker of food-prep robots known for its salad-making bot Sally, also for an undisclosed amount.

Crowdfunding also seems to be a viable option for automation startups. Miso has raised close to $22 million so far from over 9,000 investors. Another startup in the space, robotic smoothie kiosk operation Blendid, is currently seeking to raise $2 million through crowdfunding.

Forecast: plenty more demand

Jordan predicts plentiful demand ahead for functional automation technology as staffing shortages, combined with a more foodie-leaning populace, leaves us seeking ways to affordably and sustainably satiate our cravings.

While the latest automation revolution won’t happen overnight, it will be a broad paradigm shift from the last era of food-tech innovation, which focused on bringing factory efficiency to processed and prepared foods. This time around, automation is focused closer to consumers themselves, with an eye to preparing fresh meals quickly and with consistent quality.

For an image of how the future might compare to the past, Jordan recalls his own prior experience working late at night with his sole dining option; microwaved Hot Pockets purchased from a vending machine.

In the not-too-distant future, one might hope instead for a fresh robot-prepared, autonomously delivered pizza or tasty rice bowl, or even a quick jaunt to a kiosk for a custom robot-made latte or smoothie. If feasible at scale, it’s certainly a tantalizing alternative.

Illustration: Dom Guzman