We’ve spent the past several weeks devoting our A Deeper Dive podcast to the subject of AI in restaurants, and it’s clear that companies are using the technology in innovative ways.
We have order takers in drive-thrus. Chefs are using it to help develop new menu items. Managers can more easily create schedules or count inventory. Companies are using it to handle mobile orders and create games.
I’ve personally used AI to do everything from writing silly poetry for social media to producing massive reports on beef costs.
(Check out the entire series on Apple Podcasts or Spotify.)
But one thing is also clear, at least when it comes to the restaurant industry: The technology is a long way from being able to successfully replace people. And in restaurants it’s not entirely evident that it ever should.
We are not the only ones asking this question. Stocks fell more than 1% on Wednesday, largely because investors sold off AI stocks such as Nvidia and CoreWeave at least in part out of concern that the technology will not produce enough profit to justify its cost.
The restaurant industry has always been different. It is certainly more labor-intensive. When labor costs increase, menu prices go with them, customer counts decrease and more than one executive frets over the impact on profitability. Much of the industry has sought new ways to save on labor, certainly at the restaurant level.
AI, much like other technologies that have preceded it, can definitely make some things inside the restaurant easier.
Starbucks’ AI-powered inventory counter that we wrote about earlier this year is certainly one of those improvements. Counting inventory is one of the more annoying tasks managers must do, but nevertheless one of the more important. The AI program ensures it gets done, and faster in the process.
There are countless other uses. Yum Brands has boosted marketing for its various brands. Jack in the Box makes games out of it. My colleague Pat Cobe has talked with countless chefs who use the technology, perhaps one of the more surprising uses.
Maybe the most visible use of AI will be in the drive-thru, where a lot of chains have added automated order taking.
But that’s where we tend to get more skeptical. A lot of the companies that have gone full-bore into drive-thru AI have been the type of companies desperate for more profitability. Yet AI order taking is often slow and makes some mistakes.
What’s more, the use of the technology should almost never actually cut a person from the day’s roster. Yet the temptation for many of the companies using the technology is exactly that.
And that makes this technology a lot like other new technologies that have been introduced over the years, from the drive-thru speaker to kiosks in the lobby to fry-making robots. If they are used to reduce staff, they ultimately hurt service inside restaurants and will over time hurt sales.
Restaurants are still a service-based business. Many of the most successful restaurant chains in the U.S. invest heavily behind service. These popular new drive-thru beverage brands like 7 Brew and Dutch Bros? They don’t have drive-thru speakers but use people, much like Chick-fil-A frequently does. You won’t see kiosks at Culver’s, which still delivers your food to the table.
People love going out to restaurants, at least in part because they enjoy the service. And while they may be perfectly fine with a lot of technology in the process, at the end of the day, that greeting and personal interaction matter. It’s why companies like Starbucks, which spent so much of its time preparing for a takeout future, are now focused more on service. And it’s a key reason why the casual-dining chain Chili’s thrived this year.
AI can certainly help that by freeing workers to help with those tasks that AI cannot do, such as flip a burger or greet a customer. But that person should still be there.