Tech Check is a regular column on restaurant technology by Senior Editor Joe Guszkowski. It's also a newsletter.
We’re more than halfway through 2024, and it’s been an eventful year for restaurant technology. Consolidation is in full swing, investors seem to be feeling generous again, and rarely does a week go by that I don’t write a story with “AI” in the headline.
But you didn’t need Nostradamus to tell you those things were coming, and we won’t waste any further ink on them here. Instead, this week’s column focuses on the steady supply of curveballs that the year has delivered. These five developments don’t fit neatly into a trend, and a few even go against the grain, which makes them all the more notable.
Grubhub makes moves
The smallest of the Big Three delivery providers has been punching above its weight this year, securing partnerships with Starbucks, Albertsons and, most notably, Amazon, which now offers Grubhub delivery within its app along with free delivery for Prime members.
It’s a series of unlikely wins for a company that has been losing ground to DoorDash and Uber Eats for years. But before we get ahead of ourselves, it should be noted that these changes have yet to be reflected in Grubhub’s performance. First quarter results for its owner, Just Eat Takeaway, show that the company’s North America business, which includes Grubhub, declined 12% year over year.
American Express, restaurant tech giant?
The credit-card company solidified itself as a gateway to high-end restaurants with an agreement to acquire reservations platform Tock, which joins Resy in Amex’s portfolio.
But the most interesting part of the deal was in the subhead, where Amex said that it also planned to buy Rooam, a contactless payment and ordering system for restaurants and stadiums that integrates with a bunch of other tech systems, including Resy and Tock.
It positions American Express as a vertically integrated restaurant tech provider that also boasts unique benefits for consumers in the form of hard-to-get reservations and other perks. Who saw that coming?
McDonald’s AI mea culpa
Following a “thoughtful review,” the burger giant in June said it was ending a closely watched three-year test of AI order-taking in the drive-thru.
It was a big setback for drive-thru AI, which has made halting progress over the past few years. And it was especially head-turning given McDonald’s close ties to the technology it was using. The system was made by Apprente, an AI company that the chain acquired in 2019 and later sold to IBM.
McDonald’s exact reasons for ending the 100-unit test are unknown, but it appears that the technology was not meeting its expectations. It’s not giving up on the idea of automated drive-thrus, though, saying that it plans to unveil a new solution by the end of the year.
C3 outlasts the ghost kitchen crash
If you had asked me four years ago which of the bumper crop of ghost kitchen and virtual brand companies would still be around today, I would not have said Sam Nazarian’s C3.
The company, a confusing collection of brick-and-mortar and digital restaurant concepts that also has a hand in food halls, a mobile app and even in-flight meals, seemed to lack the focus and the name recognition to survive in a challenging delivery market.
But C3 is still here, and not only that, it has absorbed some of its former competition along the way. Last summer, it scooped up the defunct virtual brand company Nextbite, and then in March bought the assets and IP of former ghost kitchen provider Kitchen United.
Those once-promising companies are now part of the newly created Everybody Eats, a “100% asset light IP and premium QSR and CPG brand company” that will look to bring C3 concepts to as many as 50,000 kitchens around the world.
CloudKitchens has a Picnic
Speaking of ghost kitchens, another survivor, CloudKitchens, has been linked to a new outfit called Picnic, which is offering batched restaurant delivery to offices and apartment buildings in Los Angeles.
The company says customers can order from more than 100 different restaurants and have their meals dropped off with others at a pre-arranged time with no delivery fee or tip. It’s similar to Sweetgreen’s Outpost program and ezCater’s Relish service.
The business model hints at an intriguing use case for ghost kitchens, namely as hubs for multiple orders that are delivered to a single location, thereby lowering the cost of delivery. The most surprising thing about it may be that the idea was there all along.