Why restaurant chains are investing in robots and what it means for workers

A White Castle team member next to Miso Robotics’ Flippy.

A robot is being tested to make tortillas in a store. Sweetgreen wants to automate salad making. Starbucks wants its coffee-making equipment to be easier to use.

The restaurant industry saw a lot of automation announcements this year as operators scrambled to find solutions to a shrinking workforce and rising wages. Experts say it will be years before a robot takes the place of a worker.

There is a lot of experimentation that is going to lead us somewhere, but we are still a very labor intensive, labor-driven industry.

Restaurants were having a hard time attracting and retaining workers. Many laid off workers left for other jobs and didn't come back. According to the National Restaurant Association, three-quarters of restaurant operators are facing staffing shortages.

At a time when food costs were increasing, many restaurant operators hiked wages to attract workers.

The automation startups are trying to solve a problem. Artificial intelligence can enable computers to take drive-thru orders more accurately, and thatrobots can flip burgers and assemble pizzas more consistently than tired employees.

As of November, Miso Robotics has raised $108 million and has a valuation of $523 million, according to Pitchbook.

Flippy, a robot that can be programmed to flip burgers or make chicken wings, is the most innovative invention of all time.

White Castle has installed Flippy at four of its restaurants and plans to add the technology to 100 more. The equipment called "Chippy" is being tested at a California restaurant.

Mike Bell told CNBC that the highest value benefit that they bring to a restaurant is to allow them to sell more and make more money.

After more than a year, Flippy hasn't progressed out of the testing phase. One of the partners it has worked with to automate frying chicken wings is Miso.

Pizza assembly equipment is offered by Picnic Works. The technology is being tested by a Domino's franchisee.

The equipment is rented out for a monthly fee of $3,250. The technology is affordable for smaller operators, according to CEOClayton Wood. The startup has raised over $12 million and has a valuation of over $60 million.

Artificial intelligence software that can take drive-through orders and a system that checks coffee volume and temperatures are some of the automation experiments that have been done at Panera Bread.

A lot of people think of automation when they think of a robot making food. George Hanson is the chain's chief digital officer.

Success is not a given. In the early 2020s, Zume pivoted from using robots to prepare, cook and deliver pizza to focusing on food packaging. The startup, which did not respond to a request for comment, received a $375 million investment from SoftBank in the middle of last year.

Labor advocates see automation as a way of eliminating jobs. Restaurant companies have been experimenting with doing away with tedious tasks in order to improve working conditions.

Sweetgreen plans to open two locations next year that will mostly automate the salad-making process with the technology it acquired. Nic Jammet said at the Morgan Stanley Global Retail and Consumer Conference that the new restaurant format will cut down on the number of workers needed.

An improved employee experience and lower turnover rates were listed by Jammet. The representative for Sweetgreen wouldn't speak to the story.

The restaurant industry's push for automation is expected to permanently shrink its workforce.

He said that once the machines are in place they will not go backwards.

Covid reduced the resistance against automation as consumers got used to self check-out at grocery stores.

According to Dina Zemke, an assistant professor at Ball State University who studies consumer attitudes about automation in restaurants, consumers are tired of reduced restaurant hours and slower service that have come with labor shortages.

According to a survey conducted in the third quarter, 22% of restaurant operators said they were investing in technology that would save on kitchen labor, and 19% said they had added labor-saving tech to front of house tasks.

It's not clear if or when cost savings will come about.

Apprente, an artificial intelligence startup, was acquired by McDonald's more than a year and ahalf ago. The fast-food giant sold the unit to IBM after they revealed the test.

The voice-ordering software at the roughly two dozen Illinois test restaurants had an accuracy in the low 80% range, well below the target.

McDonald’s crowds at self-service kiosk.

Chris Kempczinski, the CEO of McDonald's, threw cold water on the idea of total automation.

He said that the idea ofrobots and all those things is not practical in most restaurants. It is not going to be a broad-based solution anytime soon.

Less noticeable tasks may have more potential with automation. Less flashy changes like installing Coca-Cola machines have had a bigger impact on sales than flashy changes.

Richardson said that the bigger automation investments aren't as shattering.