Foodservice in Europe awaits the EU Act on Artificial Intelligence

In an attempt to standardize usage of AI, the European Union is introducing legislation later this year. Helen Roxburgh investigates the expected impact

Foodservice providers in Europe have been taking advantage of opportunities offered by AI and robotics, but legislation from the European Union (EU) will for the first time regulate how the new technology is used. The most visible technology is often front of house – such as ‘Luigi’, a waistcoat- wearing server robot at a Michelin-starred restaurant in southwestern Germany – or AI-powered chatbots that speak different languages. But many other widely-used systems are making efficiencies.

“AI in the form of automation currently exists in restaurants today – used in the background to streamline and manage workflows – without taking away from the overall experience,” says Glenn Tait, product director at restaurant technology group Zonal.

“AI is also playing a significant role in analyzing and managing suppliers and inventory,” he says. “As it’s not enough for operators to merely keep track of stock levels, AI is being used to take this a step further by forecasting, planning, and controlling inventory.”

This allows restaurants to help control food waste management, analyze kitchen operations, orders, portion sizes and provide real-time feedback to help minimize overordering. Some larger chains also use automated recruitment, in an industry that struggles with high staff turnover.

While the adoption of AI tech has been driven by large chains, the abundance of companies offering technological solutions has helped Europe to catch up.

“Large chains have been able to be a bit more advanced because they have not only the money but also the management capacity. In Europe, the share of independents and small chains is much bigger than in other areas. So that is why Europe is somewhat lagging behind North America or China,” explains Maria Castroviejo, senior analyst on the European consumer foods sector at Rabobank. “But you no longer need to buy a company or develop everything in-house – the number of companies that offer support services is immense.”

As more restaurateurs use AI systems, sweeping new regulations are about to become the world’s first concrete initiative for regulating the technology.

Artificial Intelligence Act

The EU Artificial Intelligence Act is the first comprehensive law on AI by a major regulator, set to pass later this year and come into force by 2026. The goal is to “balance innovation that takes advantage of AI’s promise while protecting fundamental rights,” according to the EU.  

The regulation will assign AI applications into three risk categories. These include an ‘unacceptable risk’, meaning the AI use is banned, such as the government- run AI social scoring system seen in China. The second grading will be ‘high-risk’ – such  as a CV-scanning tool to rank job applicants– and subjected to specific requirements. Finally, those AI applications not considered high-risk or banned will be left largely unregulated.

As with the EU’s General Data Protection Regulation (GDPR) in 2018, the Act could potentially eventually become a global standard.

Once the regulation comes into effect, foodservice providers may have to share more information, says Julia Buech, senior consumer foods analyst at Rabo Research Food & Agribusiness. “Foodservice providers should start to prepare now, and the best thing to do is to familiarize themselves with what the act actually means,” she adds. “They might soon find out that the implications for their business will be limited.

“For most foodservice AI operations, they would probably fall into the low-risk like category. So there’s not too much to worry about at the moment – although they will have the obligation of informing the client that they are dealing with a machine and not a human, for instance – but at the same time specific requirements depend on the organization of the business, the size, the functionality.

Automated recruitment could be rated high risk, however, so those using those systems must ensure they meet the obligations. “Companies need to make sure they choose a “clean” provider of AI systems, but in the end they themselves need to keep on top of what they are doing, and how they are interacting with their customers,” says Buech.

She said the regulation is necessary to make AI more secure and to protect customers, as many restaurants, foodservice and food manufacturers “don’t know what they’re dealing with at the moment.”

“It feels like a bit of a lawless jungle out there at the moment when it comes to AI,” says Buech.

Quite unique

However, the rapid nature of technological progress could mean different applications are used by the time the Act comes in.

“Everybody will be watching this EU Act quite closely because it’s quite unique in the area of AI,” says Buech. “But by the time this comes into force things might have developed so much that it seems like an outdated move already.”

While labor costs are rising, automation costs are falling and robot capabilities are continuing to advance. According to a GlobalData report, the robotics industry was worth $130.7bn in 2020 and is expected to achieve annual growth of more than 15% during the period 2020-2025.

Some of the leading adopters in hospitality so far include big players like Chipotle, Starbucks, Too Good To Go and Yum! Brands. “You have to bear in mind that all is moving very fast, very rapidly – but there are still a lot of players that have nothing,” says Castroviejo.The advice from the experts is that the best way for restaurants to take advantage of the benefits of AI with the risks in mind is to focus on one or two solutions first.

“Once operators are comfortable with these solutions, then they can start experimenting more, such as using AI for predictions to avoid equipment failures and create hyper-personalized customer experiences to help drive customer loyalty and return visits,” says Tait, adding that the hospitality sector has been slower than others in adopting AI.

For now the impact of the AI Act looks to be quite light-touch. “AI, generally speaking, is a tool, an accelerator, an enabler, but it’s not anything that anyone in the foodservice industry needs to be threatened by at this stage,” concludes Buech.

Helen Roxburgh