Even with rising wages,
robot revolution skips restaurants
Send a link to a friend
[October 05, 2016]
By Lisa Baertlein and Peter Henderson
LOS
ANGELES/SAN FRANCISCO (Reuters) - Clamshell grills are making burger
flipping obsolete at McDonald’s, Johnny Rockets and other burger chains.
Digital kiosks, tabletop tablets and mobile phones are taking orders at
eateries like Panera, Chili’s Grill & Bar and Domino’s. And at Silicon
Valley start-up Zume, robots are being programmed to take over pizza
assembly.
Such labor-saving devices have been held out as counterweights to
efforts to raise the wages of the lowest paid workers in the United
States. But the early evidence suggests robots and other forms of
automation are merely reshaping the work of people in food service. They
are not - as they have in banks, on factory floors and in other sectors
- replacing them.
In spite of improvements in technology, minimum wage hikes between 2000
and 2008 caused little immediate displacement of workers by technology,
especially in kitchens, according to a study by economists at the
Federal Reserve Bank of Chicago and DePaul University.
There were slightly more workers per restaurant in 2015 than in 2001,
according to data compiled for Reuters by the National Restaurant
Association, which opposes minimum wage hikes.
And the U.S. Bureau of Labor Statistics has projected leisure industry
jobs, a broad category that includes restaurants, will grow at 0.6
percent annually, keeping pace with the national average through 2024.
Automation in the restaurant industry looms large in the heated campaign
to raise entry level pay to $15 an hour, more than double what U.S.
federal law now mandates.
Restaurants employ more low-wage workers than any other industry, and
their operators are among the most vocal opponents of minimum wage
hikes. Several executives have said major pay hikes would force the
fast-food industry to ramp up automation, an investment that would cost
thousands of jobs.
“The numbers just don’t work for raising the minimum wage this
dramatically,” said Andrew Puzder, CEO of Carl's Jr parent CKE
Restaurants Inc. “It will kill jobs.”
Robotics researchers, restaurant executives, industrial engineers,
consultants and economists said, however, automation in the restaurant
and fast-food sectors is not as simple as installing automatic tellers
in banks or employing robots to assemble cars.
![](http://archives.lincolndailynews.com/2016/Oct/05/images/ads/current/stacy_sda_071216.png)
While any rise in the minimum wage puts pressure on restaurant
operators, they said a robot revolution in the $783 billion U.S.
restaurant industry is still years away.
Sixteen U.S. states have increased their minimum wages this year, and
some, including California and New York, will move over several years to
$15 an hour. More states are considering such measures, and Democratic
Presidential candidate Hillary Clinton has vowed to increase the federal
minimum wage.
"It's not like we're at the precipice of a revolution where the minimum
wage goes up, and all these jobs disappear," said Ken Goldberg, a
professor of engineering and director of the People and Robots
Initiative at the University of California, Berkeley.
Many kitchen jobs still are too complex for robots, which can’t
multitask and don’t necessarily work safely with humans in cramped
spaces, experts said. While robots excel at complex calculations and
precise, repetitive tasks, they have difficulty doing some things that
are easily mastered by small children - such as stacking blocks and
sensing objects in space.
Moreover, most restaurants serve a range of menu items, each of which
might need numerous specialized forms of automation. Sit-down
restaurants have additional tasks that are hard to automate, including
setting and clearing tables, refilling coffee cups and answering
questions about what’s on the menu.
APPETITE FOR RISK Burger King attempted a potentially sweeping
automation overhaul in the 1980s. It designed machines to take orders;
broil, assemble and package hamburgers; cook and portion French fries;
and serve drinks. But new management came in and shelved the project.
![](http://archives.lincolndailynews.com/2016/Aug/26/images/ads/current/ldn_business_directory_small2_2016.png)
It’s not clear why. Among the questions at the time was whether the
machines would be a “maintenance nightmare,” but the system was never
broadly tested, recalled Nelson Marchioli, who had a long career at
Burger King before moving on to executive roles at El Pollo Loco and
Denny’s.
“It’s nothing that money and time can’t fix, but how much time and money
do you want to invest?” Marchioli said.
[to top of second column] |
![](../images/ads/current/demay_inv-lda081412.png)
Maintenance of automated systems can be costly and, when they break down, bring
operations to a screeching halt, alienating customers, restaurant operators
said.
In other industries, such as car plants, breakdowns can be costly, but delays do
not immediately frustrate consumers, in the way a late pizza angers a hungry
family.
Thomas
Willis, an industrial engineer who was part of Burger King’s project, said many
restaurant operators still don’t have the appetite for the kind of investment
risks such efforts require.
“The fear of walking away from what works already is huge,” he said. But Silicon
Valley is nurturing an appetite for risk and experimentation in the kitchen.
Momentum Machines has built a device to make gourmet burgers “with no human
interaction” and city permit data show it plans to open a restaurant in San
Francisco.
Zume Pizza, a Silicon Valley delivery start-up that has raised $5.7 million in
venture capital, said robots will be building and baking pies by themselves
within six months.
![](http://archives.lincolndailynews.com/2016/Oct/05/images/ads/current/farmers_bank_sda_prom_050614.png)
Already, a robot named Pepe squirts tomato sauce onto the dough, and it is
spread by another called Marta. After people add cheese and toppings, robot
Bruno gently moves the pizza from a conveyor belt to an oven.
Co-founder Julia Collins said one of Zume’s biggest challenges is maintaining
the perseverance it takes to overcome technological difficulties. It took
months, for instance, to get Marta to spread the tomato sauce with enough
precision to keep it from splashing it off the pizza.
Zume’s first robot workforce cost $3 million to develop, and the company
believes it will be able to start new locations for between $750,000 and $1
million. Once fully automated, Collins predicted, the pizzeria’s labor costs
will be about 14 percent of revenue, about half the competition.
Domino’s Pizza CEO Patrick Doyle said the worldwide chain won’t embrace the Zume
model any time soon. At $250,000 to $300,000, setting up a Domino’s location is
a fraction of Zume’s estimated launch costs. And, he said, customers like seeing
people in the kitchen.
“I don’t know that people want their food out of a machine,” Doyle said. “There
is magic in a hand-crafted pizza.”
With states and municipalities moving to raise wages, restaurant owners and
their suppliers may be more inclined to invest in automation, said Juan
Martinez, principal of Profitality, an industrial engineering consulting firm
for restaurants. But single-task robots may not be a better option than workers,
he said.
“It is not ‘if you build it, they will come,’ since the return on investment is
not there yet,” Martinez said. And Johnny Rockets keeps a grill chef visible to
customers, even though its high-end burger cookers do most of the work.
Most
of the movement toward technology in restaurants has been at the front end.
Eatsa, an updated automat, offers its quinoa bowls at outlets that have largely
eliminated front-of-the-restaurant staff. Customers order on tablets and pick up
their food minutes later from small, frosted glass cubicles.
![](http://archives.lincolndailynews.com/2016/Oct/05/images/ads/current/ldn_sda_062409.png)
Several chains are using kiosks and other technology that allow orders to be
placed more rapidly and efficiently. Such systems can pay off in two or three
years, according to an analysis by Cornerstone Capital Group analyst Mike Shavel.
Domino’s Pizza and Panera Bread Co, said their custom-built ordering and payment
systems have removed bottlenecks at peak hours.
But the changes have not eliminated jobs; rather, they have shifted them away
from counters and into kitchens and delivery, operators said. Digital ordering
puts more pressure on the kitchen and delivery staffs, said Panera CEO Ron
Shaich.
“You better be able to deliver that food,” he said.
(Editing by Sue Horton and Lisa Girion)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |