Deep in a somewhat anonymous research park in Irvine, Calif., Chipotle is testing a long-awaited automated makeline that could dramatically speed the number of bowls a restaurant produces.
It’s early in a journey to explore potential new technology for the more-than 3,000-unit chain, which looking to more than double in unit count. But industry observers are already seeing it as a potential game changer.
Two steps ahead on that journey, however, is the much smaller fast-casual competitor Sweetgreen, at 205 units, which has invested in and developed a similar automated system, dubbed the Infinite Kitchen.
It’s a robotic arms race of sorts that will no doubt be watched by many.
With growth as the goal, these two brands are looking to reduce labor expenses while at the same time speeding service and improving order accuracy.
Chipotle is testing the Hyphen-designed system that is essentially two makelines in one. | Photo courtesy of Chipotle
At a time when labor costs continue to creep higher—the minimum wage for large, limited-service chains will hit $20 in California next year—proponents of automation see machine-based food preparation as a key to the restaurant industry’s future.
But there are still many questions yet to be answered about the notion of scaling a makeline that is “co-botic,” a robot that operates collaboratively with humans.
Neither company has revealed the potential cost of their respective automated systems, and, though Sweetgreen has said it is already looking for potential contract manufacturers, it’s not clear how quickly these systems could be rolled out or what the exact return on that investment might be.
And though both companies insist that robots are not replacing humans so much as making their lives easier with this new technology, it remains to be seen how such formats will be perceived. Automation has been an issue in labor disputes involving foodservice workers in Las Vegas, for example, which could be an indicator of conflict to come.
Still, the automated makeline arms race is on.
Here’s a look at what we know about the two tests so far.
Chipotle’s back-of-the-house system
At its Cultivate Center in Irvine, Calif., Chipotle is testing a system developed by the robotics team at Hyphen, which the fast-casual chain invested in in 2021.
Fundamentally, a key difference is that Chipotle is looking to apply the automated technology to its digital makeline, which operates in the back of the house, assembling orders that come in via the website, app or third-party marketplace. The automated system requires no additional space.
It essentially creates two makelines in one, with a human assembling burritos, bowls or quesadillas on top. Below the counter, the automated system can prepare bowls only, moving containers along a belt as ingredients are added, according to the customer’s order.
After assembling bowls under the counter, the item pops to the top for humans to finish the order. | Photo courtesy of Chipotle
At the end of the line, the bowl pops to the top and the human team member puts on the lid and adds any other side orders. The bowl is then placed in the designated channel for pickup or delivery, and off it goes, with no one the wiser that the bowl was made by a machine
Chipotle says about 65% of digital orders are bowls, so the system could potentially significantly increase digital throughput. But company officials have not yet indicated how quickly bowls might be produced through the automated system.
Curt Garner, Chipotle’s chief customer and technology officer, said the goal is to have the automated system be the centerpiece of the chain’s digital kitchens, with the idea that it could “unlock the human potential of our workforce.”
Chipotle is also testing other types of automation to take on tasks disliked by human team members. An automated system for cutting, peeling and coring avocados called the Autocado is also being tested at the Cultivate Center, for example, as is a tortilla-frying machine dubbed Chippy.
An earlier version of the Hyphen makeline. | Photo courtesy of Hyphen
Chipotle’s automated makeline doesn’t have a cute name yet ("Otto?"). But the chain’s stock rose after the announcement of the test on Tuesday, and investors were high about the technology’s potential to lift Chipotle’s average unit volume, which during the second quarter was $2.9 million.
“Longer term, CMG possesses a compelling opportunity to further enhance throughput and build traffic as automated tools (e.g. Hyphen) are implemented across the system,” wrote Wall Street analyst Brian Bittner of Oppenheimer.
Sweetgreen puts automation front and center
Back in 2021, while Chipotle was investing in Hyphen, Sweetgreen acquired Spyce, a two-unit automated restaurant created by MIT grads in Boston that initially was designed to serve a more global menu of salads and bowls that would be delivered by a fleet of electric mopeds.
Spyce first debuted in 2018, and the idea captured headlines. The co-founders even got famed New York chef Daniel Boulud involved in creating the menu.
Sweetgreen's first Infinite Kitchen puts the automated makeline front and center. | Photo courtesy of Sweetgreen
After the Sweetgreen acquisition, however, the restaurants closed to allow developers to focus the technology on Sweetgreen. The four co-founders—self-dubbed the Spyce boys—joined Sweetgreen’s automation team.
Now CEO Jonathan Neman is so high on the Infinite Kitchen model—which company execs refer to as the “IK”—he has said all of the chain’s stores could be automated within the next five years, calling the technology transformational.
Unlike Chipotle, Sweetgreen’s Infinite Kitchens are an entirely new format.
The first unit opened in Naperville, Ill., in May as a fully automated system, aided by human enablers who do the chopping and prepping, and serve as hosts.
Here, the robotic system is part of the show.
Customers order at a kiosk and then watch the bowls progress through the system, getting a blast of kale here and a squirt of dressing there.
Sweetgreen's location in Naperville, Ill., is the first to use the Infinite Kitchen robot. | Photo by Joe Guszkowski
The technology can prepare 400 to 500 bowls an hour, which is about 50% more than a traditional restaurant’s front and digital makelines combined.
“Another benefit of faster throughput is noticeably less congestion in the restaurant, allowing team members to spend more time with customers,” said Neman in the company’s second-quarter earnings call.
The Infinite Kitchen also requires about one-third fewer workers to operate.
Sweetgreen CFO Mitch Reback said at an investor presentation earlier this year that, in traditional Sweetgreen units, about half of the chain’s labor is involved in assembling bowls, and with the automated makeline, about 70% of that half is automated, which he said was a “meaningful number” on the labor line.
In its first month, the Naperville unit had a 26% store-level margin, which for a new store is pretty good, Reback said earlier this year. (Systemwide in the second quarter, restaurant margins were just over 20%, but full-year projections range from 16% to 18%). And those margins could go higher as labor is further optimized, he said.
“Another benefit of faster throughput is noticeably less congestion in the restaurant, allowing team members to spend more time with customers.”
The system has also made it easier to hire and retain team members, he added. And the Naperville unit saw considerably less turnover in its first few weeks.
“It’s a much easier store to operate in. It’s cleaner. It’s quieter and the roles are a lot easier. Working the front lines is actually kind of a challenging position at Sweetgreen,” said Reback.
Customers love the speed and order accuracy, he said. Over time, Reback said he’s convinced investors will also love the IK “because the return on capital will be accretive to the business,” he said.
With IK units potentially speeding throughput, Reback added that the chain expects the format could boost Sweetgreen’s average unit volume, which in the second quarter was also $2.9 million.
“At a typical Sweetgreen, there is clearly a walkaway factor at the lunchtime rush, and the IK solves for a big portion of that, so we do believe it will lead to higher AUVs over time,” he said.
A second IK Sweetgreen location is scheduled to open in December in Huntington Beach, Calif. Early on, company officials said that would be a converted existing location, but it actually will be a new restaurant. It's not clear whether the company is considering the conversion of existing units.
Now Sweetgreen is in negotiations with contract manufacturers for the IK with the hope of deploying the technology more broadly next year.
“It’s real important for us because we’ll learn a lot more and we want to really kind of prove it out in different markets, different geographies, different types of stores,” Reback said. “Look for a higher percentage of new stores [with the IK format] in 2025 than 2024.”
Fundamentally, it allows the healthful fresh-food concept to create “a more profitable and scalable model,” Neman said last year, and that’s vital for Sweetgreen, which has yet to make a profit.
Analyst Brian Mullan of Piper Sandler, who has visited the Naperville unit, agrees that the technology could be transformational, though much depends on the questions outstanding.
“The cost to build is the big question mark here,” said Mullan, Piper Sandler’s director of restaurants and food distribution equity research, who follows both Sweetgreen and Chipotle.
It’s clear how the IK system could benefit an urban store with lines out the door, but less clear how volumes at suburban locations might be impacted, he said.
But, after visiting Naperville, Mullan said, “I was pleasantly surprised by the aesthetic of the machine. It’s smaller and quieter than I thought it would be, and you can see your bowl going through, but it’s not in your face at eye level, and you don’t feel like you’re in a robotic store.”
“What Chipotle is doing is making these smaller investments and, over time, one or more of these is going to hit.”
Chipotle, on the other hand, has margins already solidly in the mid-20% range and a viable growth path to 7,000 units. Fundamentally, Chipotle faces less risk with its Hyphen experiment.
With the investments in the automated avocado peeler and Chippy the tortilla fryer, Chipotle is “taking multiple shots on goal on having the benefits of automation,” he said. “What Chipotle is doing is making these smaller investments and, over time, one or more of these is going to hit.”