Business

/

ArcaMax

Robots can make your fries, salads and guacamole. Is this the future of fast food?

Queenie Wong, Los Angeles Times on

Published in Business News

Miso Robotics' lab in downtown Pasadena, California, is filled with robots of the past and present.

There's Sippy, Chippy and Drippy. The star of the lab: an updated robot named Flippy that can fry French fries and chicken nuggets much faster than humans.

Miso Robotics has a lot riding on its ability to convince fast-food chains to incorporate Flippy — a robotic arm that drops fryer baskets into sizzling oil — into their kitchens. With the restaurant industry buffeted by higher costs driven in part by rising minimum wages in California and other states, Miso is one of several tech startups betting more businesses will be searching for new ways to save money, reduce employee turnover and fill more orders.

"You're never going to get rid of humans in restaurants, nor would you want to," Miso Robotics Chief Executive Rich Hull said. "What you're trying to do is automate the tasks that the humans don't enjoy doing." Flippy can process more than 100 fry baskets an hour, notably faster than the 70 or so baskets the company estimates employees can handle during the same time period. The robot also spares workers from the risk of burns from hot oil or slips on grease.

Restaurant chains have been experimenting with robots in the kitchen for years. But, while several companies including White Castle, Sweetgreen and Chipotle are currently testing out ways to automate food prep, circuits and software haven't yet taken over.

"We are at the very, very early stage. The return on investment has not been proven," said John Gordon, a restaurant industry analyst who founded Pacific Management Consulting Group. "There's no doubt an opportunity in some restaurants because of the … repetitive work that is done" out of view of diners.

For some businesses, early results are promising. Los Angeles-based fast-casual restaurant Sweetgreen has been testing what the company calls its "Infinite Kitchen" that uses machines to dispense and mix salad ingredients that humans then put the finishing touches on. Two locations that piloted the technology, including one in Huntington Beach, saw improvements in order accuracy and staff turnover, while average sales were 10% higher, executives said during a recent earnings call.

Miso Robotics, founded in 2016, has tested earlier versions of Flippy in roughly 20 restaurants including White Castle, CaliBurger and Jack in the Box. White Castle, a burger chain with locations primarily in the Midwest and the region around New York City, said it expects to follow through on plans announced last year to roll out Flippy in nearly one-third of its approximately 350 restaurants.

The field of fast-food robotics is littered with companies that failed in their attempts to disrupt the restaurant industry. Last year, Silicon Valley pizza-making startup Zume shuttered after raising $450 million from SoftBank's Vision Fund and other investors. Among other problems, the company, which was founded in 2015, reportedly had trouble getting its robots to keep melted cheese from falling off pizzas that were being baked in a moving truck en route to customers. And in 2022, food delivery company DoorDash shut down Chowbotics — the company behind a robotic salad-making vending machine — roughly 18 months after it purchased the startup because it didn't live up to expectations.

Miso Robotics appears to be at a make or break point, analysts said. As of June 2024, the startup had an accumulated deficit of $122.8 million and meager cash reserves of just under $4 million. The company's negative operating cash flows have raised concerns about its ability to survive, a report filed to the U.S. Securities and Exchange Commission says.

Hull and other executives started just last year, and former CEO Michael Bell was terminated in May 2023, another filing shows.

As of March, the company has raised $126.5 million from investors and was in the process of raising additional funds, according to data from Pitchbook. Gordon and other analysts said they believe the company's immediate future rests largely on its ability to raise more cash as it tries to ramp up sales.

Hull, an early investor in Miso Robotics, is a Hollywood film producer and executive who also founded a Spanish-language streaming company, Vix Inc., which was acquired in 2021 by TelevisaUnivision. He said Miso's board and Ecolab, which invested $15 million in the company, brought him in to grow the startup much like he's done for the streaming business.

"Innovation is not easy. It's really hard. Now we have a seven-year head start on everybody else, but it's messy," Hull said. "I love messy. That's always been my thing."

The company plans to significantly ratchet up its production capabilities next year, making it able to fill whatever orders it receives, Hull said, adding that Miso is aiming to be profitable by the end of 2026.

Some labor analysts question whether automation will help workers. Brian Justie, a senior research analyst at the UCLA Labor Center, visited a restaurant that used Flippy during the summer.

 

"Whether or not it's faster or cheaper than a ... traditional restaurant, I think what it very clearly was, it was fewer people doing pretty much the same amount of work or more work with a limited menu," he said.

During a demonstration at Miso Robotics' lab, Hull highlighted improvements the company has made to Flippy, including making it smaller so it can fit under the exhaust hood and above the fryers in a compact kitchen. And he said the integration of artificial intelligence technology has cut down on food waste and improved durability with the machine able to fix problems with its operating system or alert a customer service representative if it's about to break down.

Miso Robotics has tested out other robots, which were meant to pour drinks at the drive-through (Sippy) or cook and season tortilla chips (Chippy), but Hull said its engineers are focused for now on the frying robot. Miso initially designed Flippy to flip burgers when the startup unveiled the robot in 2017, but the company changed course when it saw a bigger revenue opportunity with fried foods, he said.

Miso executives believe the frying technology could be a huge boon for the company, claiming in a government filing that "Flippy's automation of the fry station represents a potentially massive $3.5 billion revenue opportunity for Miso alone in a market that, importantly, still remains fragmented, underdeveloped, undercapitalized, and ripe with growth opportunities for a company with Miso's first-mover advantage."

Restaurants can buy or lease the robot, and the company makes money as well from maintenance, software upgrades and tech support. Most customers lease Flippy for $5,000 to $6,000 per month, but various factors can influence pricing, including the number of fryers in a restaurant.

Several chains, including Panera, Jack in the Box, Chipotle and Buffalo Wild Wings, have been testing Miso's technology since 2021, SEC filings show. Many of the companies declined to detail whether the robots led to cost savings, but they pointed to other benefits.

At White Castle, for example, Flippy robots have allowed employees to better focus on other aspects that improve a customer's experiences such as order accuracy and hospitality, said Jamie Richardson, the chain's vice president of marketing and public relations.

The burger chain turned to Miso after realizing workers assigned to the drive-through and fry station had to juggle multiple responsibilities and orders. White Castle also partnered with SoundHound to test an AI voice assistant named Julia (named after a beloved White Castle host named Julia Joyce from the 1930s) to help take drive-through orders. In June, McDonald's announced it was ending a similar pilot program with IBM amid reports the technology had struggled with people's accents.

With many variables at play, White Castle hasn't measured whether Flippy has improved employee retention, Richardson said. So far, it has gotten positive feedback about the robot from employees.

"People who come to us want hot and tasty, affordable food," he said. "If you can take the pain points out of that, if you can reduce the friction, everybody wins."

Curt Garner, chief customer and technology officer at Chipotle, said the restaurant chain tested out Miso's tortilla chip-making robot in one Orange County location from 2021 to 2023. Even though the pilot ended last year, Garner said the restaurant incorporated what it learned into other products.

Chipotle, which has a $100-million venture fund, has invested in other startups including Vebu Labs, which was founded and is run by Miso Robotics' president and board chair, James Jordan. The partnership produced Autocado, which cuts, cores and peels avocados before workers hand-mash them to create guacamole. It has also invested in San José-based Hyphen to create what the company calls an "augmented makeline" that uses automated technology to build bowls and salads while Chipotle employees make burritos, tacos, quesadillas and kids' meals.

Jot Condie, president and chief executive of the California Restaurant Assn., said the COVID-19 pandemic fueled more interest in the use of automation and technology in restaurants.

A lot of the adoption, he anticipates, will happen in fast-casual restaurants where convenience and efficiency are key, rather than in full-service restaurants where the interaction with friendly servers is a more important part of the experience.

"Quick service restaurants like Chipotle that have the ability and the resources to invest and adopt technologies will sort of lead the way," he said.


©2024 Los Angeles Times. Visit at latimes.com. Distributed by Tribune Content Agency, LLC.

 

Comments

blog comments powered by Disqus