Robots In Restaurants

Video Index:
0:00 Jeff Bezos’s mixed-use development in outer space
1:58 Robotic automation in retail
2:41 McDonald’s automated drive-thru lane with voice recognition
3:17 Robotic chicken wing fryer at Buffalo Wild Wings
4:07 Robotic conveyor belt and robotic coffee machine
4:34 BJ’s goes low tech, reverting to traditional menus
5:55 Inland Empire has the highest inflation rate and the highest wage increases in the nation
Hello Investors!

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This week’s newsletter has a heavy focus on technology, and how it’s affecting retail real estate.  My last newsletter detailed my experience with the Jamba Juice robotic smoothie maker.  In this issue, I’ll talk about other restaurants that are using robots or artificial intelligence to work alongside humans to improve efficiency.

Mixed-use development in outer space?

Amazon is the most dominant force in online retail.  It’s also a significant player in the retail industry, with its four brands of retail stores plus whole foods popping up everywhere.  And it has recently become a huge player in real estate, by leasing and buying massive amounts of warehouse, retail, office space, and land for its distribution centers.

But they’re not satisfied.  It looks like Amazon founder Jeff Bezos now wants to establish commercial real estate in outer space.  His space exploration company, Blue Origin, is planning to build a commercial space station called the Orbital Reef, which will accommodate up to 10 people.  The goal is to have it operating in low earth orbit by 2030.  Bezos is calling it a “mixed use business park” so that companies can establish their own address in orbit.  Kind of like a WeWork where you can have a virtual address for your business.  In case you have always wanted to have your own address in space.  But once you get your mailbox, who’s going to deliver the mail there, and how much is postage going to cost?

Robots in Retail

In my previous videos, I’ve talked a lot about the labor shortage that has been affecting many retail businesses, and in particular, restaurants.  At the same time, the minimum wage is increasing everywhere due to natural supply and demand of workers, as well as laws mandating the increase in minimum wage.

Well, robotic automation may be one solution to future worker shortages and increasing labor costs.

A few weeks ago, I visited a robot Jamba Juice smoothie maker at a mall in Downey.  But Jamba isn’t the only retailer that is using technology to do people’s work.  Let’s explore a few of the other high tech solutions that restaurants are using.

Recently, McDonald’s partnered up with IBM to develop artificial intelligence to automate its drive-thru lanes through voice recognition. The AI has already been tested at a few locations in Chicago, and McDonald’s has said that the program showed positive results. The CEO did note, however, that the AI is only about 85 percent accurate and can’t take 100 percent of orders correctly.

Another restaurant chain, Buffalo Wild Wings, is testing out a robot that can fry chicken wings. The robot –known as Flippy Wings –– was able to increase efficiency and provide a safer work environment as it reduced the number of oil spills. Miso Robotics, the company that developed the robot for Buffalo Wild Wings, said that Flippy Wings reduces costs, avoids cross-contamination, and is safer to operate than most traditional fryers.

Miso Robotics, which is based in Pasadena, has also developed robots that can flip burgers and cook french fries.  It can even clean the grill after it’s done cooking.

When I tried out the Jamba Juice robot, my biggest issue was the speed, or lack thereof, of the Jamba Juice robot in making my smoothie all by itself.  But the Flippy robot, which works alongside employees, can increase service speed by 10-20%.  Flippy cooks the patties and puts them on buns, and a human adds the topics.

A few years ago, a Korean barbecue restaurant in Montclair had a robotic conveyer belt system that would bring your food to your table.  And a company called CafeX has robotic coffee machines located in the San Francisco and San Jose airports that will serve you a coffee or cappuccino.

For now, it seems that the best solution is to have machines work alongside humans to increase efficiency.  But perhaps in the future, the robots will improve to the point where they require less human assistance and can work quickly and efficiently by themselves.

BJ’s goes low-tech and returns to printed menus

My 5-year old son’s favorite restaurant, BJ’s is going back to old school regular menus.

The pandemic caused many of us to be extremely paranoid about getting sick by touching infected surfaces. Reusable menus were outlawed, and restaurants had to resort to paper menus.  But that was a waste of a lot of paper.  So that gave way to the rise of the QR code menu.  In theory, it’s a good idea.  You just point your smartphone’s camera at the QR code, and you can browse the menu, and in some cases, even order and pay.

I wasn’t a fan at all. I’m not sure if any of you with young kids can relate.  But I’d pull out my phone to look at the menu, and my kids would see my phone and bug me to watch youtube videos or play games on my phone.  I’d be fumbling, trying to find the kids’ menu as my kids are whining.

So I was glad when restaurants started going back to printed menus.  And BJ’s has made this decision to roll back to printed menus nationwide.  Why?

BJ’s CEO Greg Levin has said that guests like the printed menus.  So I’m not alone.  In addition, BJ’s has found that people who order off of the physical menu order $0.70 more per check than from the QR code menu.  That doesn’t sound like a big difference per order, but it adds up. So the physical menus will be back at all BJ’s later this month, and I’m happy to hear that!

High inflation and high wage increases in Southern California

With all of this money that’s being printed by the US government, how has this affected Southern California versus the rest of the country?

Last month, the US Bureau of Labor Statistics reported that out of 23 metro areas, the Inland Empire had the nation’s highest inflation rate, which was 6.8% versus prior year.  Los Angeles and Orange County were 4.6%.  The US average is in between these two figures at 5.4%.

Logically, wages are going up, as well, to pay for everything that’s more expensive nowadays.  In September, Southern California’s wages and salaries were 6.5% higher than last year.  This is the highest out of 15 metro areas and is the highest rate of increase in the 15-year history that wages have been tracked.

Thank you for reading!  I’ll see you next time.


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Mike Lin, CRE