Minimum wage and the rise of the restaurant robots

The minimum wage debate is an increasingly nuanced one with far-reaching consequences. It could even trigger more automation in foodservice – and fewer humans. Michael Jones speaks to the consultants to get their thoughts

Industry sales for the US restaurant business will hit $709.2bn this year, employing 14 million Americans in the process. But it’s a pivotal time for the sector with an increasingly impassioned call for better pay for low-wage workers raging. The $15 minimum wage was approved in Seattle in 2014 and is gathering momentum in New York City, while Donald Trump, the highest profile Republican presidential candidate, is in favour of maintaining $7.25 an hour.

Lydia DePillis’s article in The Washington Post on 16 August addressed how the minimum wage offensive may actually be speeding up the arrival of increasingly robot powered restaurants. Unsurprisingly, that provoked a strong reaction from the foodservice consultancy community so we canvassed the opinions of both design and Management Advisory Services (MAS) FCSI consultants in the US to get their views on how realistic that prediction is and, ultimately, the future of the hospitality business.

James Petersen FCSI, president of C.i.i. Food Service Design
All industries have done what they can afford to do to reduce labour costs by employing automation and robotics, sometimes at the expense of their customers. This is why you have to go through multiple telephone menus in an attempt to get a question answered, when you could do it in a fraction of the time if a human picked up at the other end – companies are willing to waste your time if it means they can replace a wage earner with an automated system.

As the article states, relatively low labour costs in foodservice compared to other industries have resulted in a cost of doing business that means investments in more expensive automated systems have not offered a suitable payback. If the $15 per hour were to become a reality tomorrow, that time will have come.

Realistically, however, it’s likely that wages will increase more naturally, prices will rise until it has an influence on sales, and the choice will again be to consider if additional automation has become worthwhile. Throw in inflation, recession, politics, unemployment, reduced costs of available technology, and many other factors, and the truth is that it’s impossible to predict with certainty what will happen down the road.

In terms of opportunities or threats to the industry, automation in single-order or medium-bulk food service (i.e. food production as opposed to food processing) implies quality and, more importantly, health liabilities that could make creative automation problematic. As a specifier, it’s incumbent on me to ensure that the end-user has complete confidence in a system he may be interested in, and that the end-user and the product/system vendor are willing to assume any responsibility for the results. It is not within my purview to suggest that my client become a beta tester for anything that has not been proven in the field. More adventurous souls with deeper pockets than mine can take that partially-lit road, but I prefer to encourage my clients not to become the canary in the coal mine.

In any case, will the restaurant industry become a Jetsons-like operation where you push a button and a bunch of Rosies will prepare your meal before it slides out of an opening in the wall? Hopefully never.

Karen Malody FCSI, principal of Culinary Options
I have just reviewed a presentation on kitchen robotics and other technologies that are making great strides in foodservice operations. I also recall Yo! Sushi using robotics many years ago, so it isn’t so much that it is ‘new’, but perhaps on its way to becoming less costly and thus more operationally ubiquitous.

But it isn’t just increased wages driving this: it is the cost of doing business overall. Utilities, equipment, rent, food costs – all of it creates a profit quandary. In the end, I believe operators will utilise any technological tools that will help them control timing for customers and cost to their operations.

However, the ultimate winners will be those who strategically and creatively utilise these tools while retaining a purposeful, focused and consistent sense of human interaction and customer service.

Technology is no excuse to abandon customer service. They can make compatible and powerful bedfellows.

William Bender FCSI, principal of W.H. Bender & Associates
This development signifies that foodservice is constantly under pressure from activists that think that owners are making exorbitant profits. Of course this is a misconception to those with knowledge of the foodservice industry. Raw costs continue to increase in all sectors.

Minimum wage is the entry level wage for team members to learn the basic skillsets necessary for employment, also known as ‘life skills’. When personal performance is achieved, opportunities are created with promotions and higher wages. This was true for me starting at $1.65/hr in 1970. The wage increase development will force operators to search for alternatives that will lower/remove costs across the P&L. This will be accomplished via a focus on menu/ingredients, design, marketing and technology integration.

It’s a pivotal time as there will be many ‘solutions’ that will be pushed to the marketplace. Some will work, others will not. The ‘robot’ idea always gets attention in media. I only see this happening after we see perfection in several more generations.

The opportunities will come as smart owners and operators will use this time and minimum wage pressure as a catalyst to seek best practice improvement and solutions in their restaurants. They will need to create environments that are efficient for service teams as well as inviting for guest. Case in point: could you imagine having a pizza cooked in 90 seconds 30 or 40 years ago? I dined in a Blaze Pizza this week that had a Wood Stone oven that cooked my pizza perfectly in 90 seconds. So Blaze Pizza now has the opportunity to keep my loyalty if they continue to execute via ServPoints with engaging team members.

The opportunities are terrific for point of sales and marketing at point of purchase and we will continue to see this for customer-facing solutions. The variables with technology for service and drone delivery are enormous. However, about a quarter of the ‘touchless’ sink, soap and towel dispensers I try to use do not work. So think of a 15-25% failure rate for robots in a restaurant. It would not be acceptable. In my opinion we have some time before it is perfected.

Michael Jones


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